Binary trading is a financial option for trading asset prices in financial markets such as Stock or Forex Exchange and betting without necessarily purchasing the asset. In this aspect, industrial players have a monetary alternative of either seeking a payoff that has nothing at all or some fixed fiscal amount. The two major forms of binary options entail the cash-or-nothing and the asset-or-nothing alternatives. The two are distinguished such that, for the cash option, some fixed amount of money is paid when the called option expires, whereas the asset-or-nothing involves providing securities.
Like in any other kind of business, to be a successful binary trader you will require a good strategy. You also have to determine whether you’ll be indulging in a trading or betting type of binary trading, and more so, your geographic jurisprudences regarding this form of business. The following strategies will be critical to the success of a binary option undertaking.
Technical analysis strategy:
As a popular strategy, the approach is mostly concerned with making future predictions about assets’ pricing based on historical backgrounds using distinctive parameters like charts. The method is not aimed at getting the basic worth of an asset but rather helps in analyzing industrial financial viability or dynamics. Moving Averages and Bollinger bands are amongst the tools which could be used for the technical analysis.
Fundamental Analysis Strategy:
The strategy is aimed at analyzing the overall performance behavior of a business they portend to invest their stocks in. As an interested investor in binary trading, it is important to know the well-being of a company’s financial statements (Financial flow and income) and balance sheets before deliberating on the way forward. Investors in this regards could also extend their due diligence to entail assessing business partner’s and employees’ satisfaction.
Basic Options Strategy:
It is also another popular strategy used by industrialists. The option helps binary traders to caution themselves from financial losses or shocks. The option basically entails a trader going for that financial option that is less risky or could potentially generate some returns. For instance, as a trader you’ll pick an underlying currency in the Forex market then call an option if the market movement is heading onwards the right direction like ‘upward.’ Same applies to the asset’s option.
Co-integration trading strategy:
Given that the two market stocks have a high correlational stocks relationship due to the same market and industry they are traded in, there is a higher probability for the two stocks to be affected by same industrial dynamics or landscapes. Hence, as a trader, it is important to remain vigil on the gaps between the two underlined variables. The gap in this regard happens when the stock temporarily weakens. By identifying the gap, a trader will be able to call an option on a weakening stock or, place an option on the asset when the stock‘s price is higher. Regardless, in the long run, the two assets will correlate to a correlational path of which exists as an ‘exit point.’
Algorithmic and Signals:
The strategy involves the use of Applications useful in analyzing of market data. As a binary investor, on installation of the Application Software’s to your computer or Smartphones you’ll be able to gather up to date market information which will help inform your next decision to a possible best result. The strategy integrates both the data analyzed from fundamental and technical information.
Factors to consider while developing binary trading platform
Reliability of a binary trading platform is highly depended on the services and security features encompassed in it. If you intend to own a binary trading portfolio then putting in mind the following considerations would be critical.
As illustrated in my introduction, following certain industrial rules and guidelines will be as well critical. Some countries have their own financial regulations about the industry. For example, in Cyprus, binary options are guided by the Country’s Securities and Exchange Commission. While crafting a binary option or trading platform, traders should understand their rights from different jurisprudences.
2. Application Software
The quality of trading platform is also an important factor for consideration. The binary option’s Application’s trading Software should be well designed to encompass and host vital features needed for the smooth running of your business. If the platform is not well designed, the system’s user will have a hard time navigating it also may lead to a failed trade. Hence the platform should be navigable easily and faster. Should support numerous pairs of currencies and provide the financial tools which will help the navigators conduct market analysis. Another facet on this is the mobility of the Applications Software. For example, Binary orders offer a range of Application Software such as Invinctus indicator, Romanus robot, and the IQoption MT4 copier to its clients who engage in binary business. According to Radulescu Alexandru , CEO , Binary Orders
Perhaps one of the greatest issues is the modality in which the trading platforms facilitate the rapidity of the client’s comfort. For a binary options trader that prefers the transactions with 60 seconds expiry term, the rapidity with which you execute an order is the most important. The areas of major interest in the technical analysis are the important areas of support and resistance, the areas where the volatility is higher and the price fluctuation is more rapid. A delay of the execution order by just one or two seconds is sufficient so that the result be totally different from the expected one. I know that the beginner traders find it difficult to believe but I tell you a sure thing which I always repeat to the members of my community: one second delay for each transaction on the long term will make the difference between a profitable trader and one that will lose. Do not neglect the moment, it makes the difference between a start towards victory and one towards failure.
3.The Security of Funds
Putting appropriate safeguards on the platform will ensure that your funds and transactions by customers are secure. Establishing certain security policies or protocols would help promote the security of your platform. For example, a trader can optimise key features on his or her application software to contain a personalized user’s account and end-to-end encryption as a security precaution. Having a secure financial system of transaction keeps you as a system navigator in charge of all activities on your platform free from external aggressors such as hackers.
The same way you expect to receive some form of customized services when you visit a shop, so does the customers who will be using your platform. The more emphasis your system places on customer services, the more of an indication how you value your customer. Therefore, a binary trading system should be easy to handle and give the public a timely and comprehensive feedback.
Just like any other business, to engage in binary trading, you require a good strategy. Incorporating a good technological framework in your approach is a step forward for your success.