You will discover that trading Binary Options is a very simple way to venture on the financial markets compared to other forms of investments. Consequently, you will have improved possibilities of making worthwhile and consistent profits by trading them. In particular, when you become a member of MaxOptions, then you will have the opportunity to gain as much as 81% profit per trade within an hour, even if you are new to trading.
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This article introduces some of the popular strategies to grow from novice into expert binary options trader.
Pairing(aka hedge and double position): This is a clever strategy creating windows of opportunity for high returns while minimizing your risk exposure in the process. For example, it is possible to create a “put” option additional to a “call” option you have already opened. Assume you opened on a binary option priced at $20 but while you are in-the-money with the current price standing at $24, you are considered there might be a serious price retraction which would wipe out your entire profit base. By opening the “put” immediately you safeguard your gains because you have paired these options together and you create an opportunity window that is between $20 and $24.
If the price finishes within this range at the expiry time, then you will receive profit payouts from both options. In addition, you would also significantly reduce your risk exposure because should the value of price finish outside this window at expiry time then the profit of one of your options would have a high chance of negating the loss of the other end.
Binary options betting: Activate this strategy after your selected assets experience a significant yet unexpected price surge. The binary options betting strategy takes advantage of the fact that many traders act in a very predictable way after such developments happen.
Stop-loss trading: Many traders use binary options as a method to hedge their investments with other asset types because they have been proven to be very effective. For example, you consider trading the EUR/USD currency pair utilizing a stop-loss in order to protect your account balance from suffering a serious drawdown.
Instead of deploying a standard stop-loss, instead activate a binary option in the opposite direction to your Forex trade by using the EUR/USD as its underlying asset. In doing so, you would provide a very effective protection for your EUR/USD trade.
Even though, a stop-loss trading strategy looks quite simple at first, a successful one depends on one's understanding and knowledge of risk tolerance, trading asset, trading style and market conditions.
Index-asset divergence trade: This is a popular strategy that entails hedging a binary option based on a company’s shares with one whose underlying asset is the trade index that includes the same firm.
For example, imagine opening a ‘call’ binary option with Apple because you think the value of its shares will appreciate in the near future. In order to hedge this bet and you believe that the stock markets will generally fall in value; you need to activate a ‘put’ binary option based on the S&P500 of which Apple is a composite company.
Consequently, this strategy will help you minimize your risk and allow you to support your trust in trading your selected asset. In addition, you are able to create opportunities to compound your profits, maximize your returns and minimize your risk exposure. For instance, with the example just described you can achieve a double profit pay-out if your calculations prove correct.
Competitor relative value trade: This strategy can help you profit using binary options by exploiting the opposite price movements of two competing companies. For example, Microsoft is about to release a new product that is expected to provide a significant boost to the values of its shares.
In addition, you also deduce that rivals, such as Apple and Samsung, will suffer market share decreases which would have negative influences on the values of their shares. By following through with your fundamental and technical analysis you need to open a ‘call’ binary option with Microsoft and a ‘put’ on the other companies.
This action will then provide you with the opportunity to collect double profits by taking advantage of the competitor relative value trade.
Commodity stock affect trade: Many traders consider this to be a very powerful and effective binary options strategy. The basic idea is to exploit the variance in the movements of commodities on the share values of companies that trade them.
For example, significant movements in the price of aviation fuel can seriously influence the share values of airline companies. Consequently, if you believe that a spike in the price of aviation fuel is imminent then you could consider activating a ‘call’ binary option with this commodity as its underlying option. In addition, you could hedge this bet by opening a ‘put’ binary option based on the shares of an appropriate airline because you are anticipating them falling in value as a consequence of this development.
In summary, if you take your time to evaluate binary options strategies such as those described above then you will find that this undertaking to be very rewarding and profitable. As you maximize your profits, you minimize your risk exposure with the help of our system.
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