What are Binary Signals?

Binary options signals are alerts provided to binary traders to help them decide which direction the price of the underlying asset will take. These signals are often created by experienced binary options traders to those investors subscribed to the service. With these alerts, it is possible for a binary options trader to reduce the risks of losing the investment because of a wrong decision.

Basic Tips To Improve Binary Trading Results

Basic Tips To Improve Binary Trading Results

New binary options traders are advised not to go against the trend because there’s a great probability that they will lose a lot of money if they do so. Therefore, before agreeing to a binary options trading contract, they should have monitored the charts of their chosen underlying asset. It is best to check the charts for a longer period so that they’ll know how the price of the asset moves under certain conditions.

Binary traders should also watch out for large spikes in the charts because this means a large number of investors had bought the asset which therefore gives rise to price of the asset. If this happens, a lot of these investors will start selling their inventories. In supply and demand, if there’s more supply than the demand, the price will fall. Therefore, binary traders must be able to monitor these spikes and decide accordingly.

A wise binary options trader knows the schedule of the release of the economic news which affects the price of his chosen underlying asset. It should be noted that the market moves depending on the investors’ reactions on these news articles. Therefore, he must be able to recognize how investors react. In general, investors react positively when the result of the report is greater than the experts’ expectation. There’s usually a greater demand for the asset which causes the price to go up. On the other hand, if the result fell below expectations, investors are expected to sell the asset thus causing the price to fall.

It is also not wise for new binary options traders to base his decisions on his own technical analysis because it is only advised for experienced traders. Technical analysis can be a powerful tool in binary options trading only if the trader fully understands how it is done correctly. The new trader may lose money if he isn’t very knowledgeable of technical analysis.

Binary Options Trading Tips

Binary options trading is becoming popular because it promises at least 60% payout when a trader decides correctly on the direction of the price of the underlying asset. Because of the growing number of investors, it is important for these people to be equipped with necessary tips to help them make successful trades. Like other investments, high profits entail high risks. It is, however, possible to mitigate the risks for more successful trades.

Types of Underlying Assets

To succeed in binary options trading, an investor must choose from the myriads of underlying assets: forex, commodities, indices, and stocks. In forex binary options, the trader must choose a foreign currency pair as his underlying asset. He must be able to correctly predict its price direction in order to remain in-the-money when the binary options contract expires. The forex market is the most volatile market of the four assets. Therefore, it’s not surprising for binary brokers to sell forex binary options contracts. Commodities like oil, gold, wheat, copper, sugar, silver, and coffee can also be used as underlying assets. Commodity options are fast becoming popular but haven’t yet surpassed the popularity of forex options.

Indices like the NIKKEI, NASDAQ, DAX, FTSE, and DOW JONES are the easiest to predict. These are especially recommended for short-term binary options contracts because the indices are easily affected by political and economic news. Stock trading is highly limited to investors with a lot of money. Because it is not as liquid as the other assets, investors who want to trade stocks often opt to trade stock options instead. However, not all stocks can be used in binary trading. Popular ones include Microsoft, Exxon Mobile, Apple, Google,Yahoo, Societe Generale, and Bank of America. To mitigate the risks, it is best for any binary options trader to know his chosen underlying asset very well.

 

How to Minimize Binary Trading Risks

To the inexperienced binary trader, it is easy to lose his money in this kind of trading. Basically, he has to choose from only two options: up or down. Although to the new trader, it may look so easy because there are only two alternatives. He’ll just pick one and discharge the other. But this strategy isn’t trading at all. It’s called gambling and with this money will always go down the drain.