Binary Options Trading have different strategies and the selection usually depends on each individual and his needs. If you want to get instant profit, you should choose a strategy with short expiry date where if you want double of your investment as profit, you should choose the strategy that offers this huge profit.
Here are the steps to choose best Binary Options Trading Strategy:
- Know Your Risks and Goals First:
Before you enter in the trading market and select any strategy for your investment, you should consider your risks and goals first. This means you should decide how higher risks you are willing to take and what do you want to earn from this trading. This way when you know your needs and requirements, you can describe them in a better way to your broker and ask for help in selecting the best strategy for you.
- Money Management:
People of financial world usually state that you shouldn’t keep all the eggs at one place which means you should invest all of your money on one company. Professional traders, who are used to binary options trading, never invest more than 10% of their total capital on one company. There are some traders who also advice not to invest more than 1% of your investment on one company. By knowing all this, you can choose a better strategy for your investment.
- Keeping Eye on the Economy:
Each strategy has its own effects in binary option trading and most of the times, it mainly depends on the present economic situation of the country and the stabilization of the government that which strategy you should choose. If the economy is not going so well and there are some crisis expected in the textile industry, you shouldn’t adopt any strategy that asks you to invest in textile companies.
- The Amount of Return:
If you have set your goals and aims right from the start, it means you also know how much you want to earn from the binary options trading. This decision makes it easier and more convenient for you to choose a strategy that suits the best to your needs and requirements about the payoff amount. If a strategy offers 50% return on the capital investment and you want it more than 100%, it shows you shouldn’t adopt this strategy as it may bring you some profit at the end but it won’t fulfill your dreams and expectations.
- Payoff Even when you Lose Everything:
There are basically two types of binary options trading strategies; one that doesn’t pay anything in return when you lose everything and the second that pays you a fix amount back even if you didn’t earn anything. For example, if you have invested $10,000 and you are expecting the profit of $50,000 and when the option expires, you find out that you are not getting your $50,000 as you have lost all of it but still you will get about $1000 of your capital investment back.