You might have heard a lot of things about binary options, but have you ever thought about why people trade them despite the risk? They trade because this volatile market is one of the few trading platforms that offer huge payout.
Of course, there is a risk of losing money, and traders can lose all the money for an inaccurate prediction. But if you have a good understanding of the market and if you can read the charts, you can try your luck into trading binary options.
That’s because if you correctly predict the price movement of an asset, you can win somewhere between 70% to 95% of the payout on your traded money.
Knowing the right way of selecting assets can also help you win a better payout. Moreover, you should have an idea of how many assets to trade with binary options.
How many assets to trade?
Binary options offer different assets to trade, like forex, commodities, indices, and stock. Each of these assets is different. So, what you should do is choose an asset that you are most familiar with. That’s because the chances of you winning trade by investing in a familiar asset is more.
When trading using one asset, it’s also important to understand its historical price movement. Along with that, develop a winning trading strategy to boost your chances of making a huge payout.
While doing so, remember that each trading strategy and the market condition are not ideal for trading the same asset. That means you should cut back on trade. To get better results, you can switch to different assets.
Failure in doing so will result in a huge loss, which you might not be ready for. So, always analyze the market condition and then make a move. If everything is working in your favor, pick a familiar asset for trading.
How to watch asset?
Another important thing to do is watch the asset. But how will you do that? It’s simple. You can follow one of the two ways to do it.
Screen each night
If you are a day trader, you should use this technique to watch the asset. This process starts by selecting software or stock screener. Research to find the best options.
Use this tool every night to know about the best stocks. By doing this, you can make a list of 2 to 6 stocks. Listing more than the recommended number of stocks will result in you losing track of good moves made by stocks.
If you keep a tab on highly volatile stocks and check their patterns, you won’t miss any amazing trading opportunities. Doing this will also help you identify breakouts, and trading in breakouts can help win a huge payout.
Trade-Off master list
Another interesting way you can watch assets is by trading off the master list. This way works the best for forex. What you should do is, after detailed research, list seven currency pairs that you can day trade. Along with this, find out 14 pairs for swing trading.
Before you start trading in the morning, check your master list. Then select one or two currency pairs that are doing well. But if you are trading at night, check the swing currency pair trading list, select two to four pairs, and start trading.
This way, you will save time and energy. And also, you won’t miss any favorable trading opportunities. Of course, making a master list is time-consuming, but it will save you time in the long run. That’s because you only need to monitor the currency pairs that you have listed.
Tips to find asset to trade
Till now, you might have understood that trading the right asset can help you yield a better payout. But how will you select an asset? Here are a few steps for doing so.
Prevailing market condition
Before you select an asset, check its market condition. Generally, there are two market conditions, i.e., sideways market and trending market. So, you should check the trending market and choose an asset that shows a profitable movement.
It’s important to check the economic calendar, which means checking economic news releases related to the asset you want to trade. Any major news can have a huge impact on the movement of assets.
Also, try to avoid trading currencies when there is a news release because, at such a time, the market is highly unpredictable.
You can trade 24/7, but to earn a huge payout, you should analyze the right time for trading. Every asset has a different favorable trading time. So, depending on your schedule, select an asset.
The last thing to keep in mind while selecting an asset is liquidity, which means the demand of the asset. If an asset has high liquidity, it loosely translates to having more popularity. So, if you trade such an asset, you can win a huge payout.
Mistakes to avoid when trading Binary Options
You might know that the binary option is a risky trading market. But did you know that you can cut down the risk of losing money by avoiding certain mistakes? Here are some common mistakes to avoid.
- Choose a trusted broker. Since a lot of shady brokers have entered the trading market, it’s important to do detailed research and choose the best broker.
- Binary options trading can help you earn a huge payout. But having unrealistic expectations will only lead to disappointment.
- If you are frequently winning trades, you might get an urge to pick random trades. Do not do it.
- If you are not familiar with your asset’s historical price movement or volatility, you should be prepared for the worst.
- Overtrading is never a good option because it can easily make you lose money.
Honestly, there is no legal limit to the number of assets a trader can watch or trade. But it’s suggested to set a limit on your own. That’s because if you watch or trade more assets than you can handle, you will end up losing your money.
Also, to find the right asset for trading, follow the steps mentioned above. This way, you can easily identify an asset that can help you win better payouts.