Novice and proficient traders alike are constantly looking out for the best binary options trading strategy. Which begs the question – is there such a thing as a perfect binary trading options strategy? Well, having a strategy may make the difference between a win and lose in any financial trading. However, there is no strategy that guarantees 100% success. Furthermore, the strategies are applied in a volatile trading environment, therefore even the best coined strategy may fail
There are a wide range of binary options strategies based on trade signals, gambling theories and reading charts among others. While some strategies aim to analyze and minimize risks, others focus on money management yet others focus on leveraging market trends.
A key consideration when choosing the right strategy is the type of binary options one is trading in. The three major binary options are call/put options, one touch options and ladder options. The call/put option is the most common. A strategy for call/put binary options should focus on precisely predicting whether and at what point market price will either rise or fall over a given period of time.
In the case of one touch binary options, a target price is defined and the trader predicts whether the market will reach the target price. An ideal strategy in his case would involve price charts and trend studies to be able to make right predictions.
Ladder options strategies incorporate strategies appropriate for both call/put options and one touch point options strategies to be able to determine whether the market will reach or surpass the target price.
Ladder options trading is riskier than call/put option. As such, a trader can be strategic about the type of option they choose. For instance, risk averse traders could do better in trading high low options and vice versa.
Markets are volatile. A trader should be able to appropriately study the market environment and plan their wagers accordingly. The market may offer lower payouts for seemingly obvious market uptrends and downtrends; and offer higher payouts for an outcome that seems unlikely. Traders should pay attention to such payouts to determine the viability of trading on the option with lower likelihood for a higher payout.
Novice traders can identify a number of strategies that appeal to them and practice them on demo mode before applying them to trade for real money. That way, they will be able to identify strategies that work and eliminate those that do not so as to lower the risk of losing. Experienced traders can also use this approach to test a new strategy. As a trader practices the various strategies they will also be able to determine which ones they prefer.
In spite of the numerous advertisement for “perfect”, “best” “100% gurantee” “sure fire strategies” and many more there is no one perfect strategy. While one strategy may work well for one market situation, it may flop in another. The best way for traders to find the right binary options trading strategy is to try new ones on demo mode until they find those that work.