The difference between a classic investor or an active trader is clear: An investor either invests his capital on a medium to long-term basis at his own discretion or he hands it over to the custodian of an asset manager. An active trader mostly manages his own capital. However, he has to invest a lot of time.
In most cases, active traders develop strategies that are individually tailored to them. However, it can take a long and financially painful process to find the right strategy, depending on which instrument the trader prefers.
We've had a few for trading binary options in the past few days and weeks possible strategies presented. It often makes sense to adapt the strategies to the conditions of the market. For example, it may make sense to try several techniques before choosing the one that suits you the most. The different trading types can help you to find the right strategy.
If, for example, you are interested in trading sideways phases that determine around 70% of the course of the price, then you should consider trading types such as boundary options or one -Touch touch options. We have already introduced some types of trading to you.
On offer by OptionFair
Many of the binary option brokers offer roughly the same types of trading, although the names vary somewhat. Take, for example, the broker OptionFair. He offers the following types of trade:
- High / Low
- A hit
- Short term
Clear it becomes apparent that the first case is the classic call and put options. The broker OptionFair even subdivides this trading type into up / down.
The high / low type relies on a price development that is either higher or lower than the target price after the expiry of the option period. The target price is the price when purchasing the option.
The "one hit" variant is the classic one-touch option. You can choose between hits or no hits. The target price is set by the broker when the option is purchased, and the trader can choose the term himself.
Here, too, the broker further divides the trading types and also offers the High Yield Hit variant. The target prices are further away than with the simple "one hit" variant.
"Limit" denotes the trading variant in which a price range is formed. So there are an upper and lower limit. These options fall into the Boundary Options category.
The question is, after the expiry of the term set by the trader, is the market inside or outside the range? Here, too, the broker offers the high yield limits at which a higher return is possible.
We come to the category of short-term trading: Basically, the broker OptionFair also offers a term adjustment for the other types. By short-term, however, is meant trading on a per second basis. The shortest runtime offered here is 60 seconds. This is an extremely short time window even for a professional day trader.
Short-term trading based on an example
In theory, it is possible to use the standard analysis methods we have presented, even for very short time windows like the 1-minute chart. In practice it is also possible, but the trader should know that the reliability of chart patterns decreases with decreasing time units.
We recommend analyzing all time units in descending order and picking out reliable patterns both on a higher time basis and on lower.
In the current daily chart of the currency pair Gbp / Usd we see a bottom formation (Sceen 4).
We can therefore initially assume, provided that no economic data are expected, that the price increases a certain part will stabilize again, or should correct further upwards. So we already have a certain tendency for our trade.
After that, we work towards the shorter time slots. Since the example shown here is a representative chart, we go directly to the hourly chart. The analysis of all time windows would be recommended. In this case, we can also see the bottom formation on the hourly chart. But not only the floor can be seen well, but also an important resistance crystallizes out.
If we now change to the time window 1 min, we can also see this resistance well. However, this can only be recognized so well by us because we also analyzed the hourly chart.
We have now, so to speak, set our direction for the extremely short-term trade by analyzing the higher time windows and thus the Probability of winning increased.
BINARY OPTIONS BROKERS | TOP 3 Binary Options Brokers 2020
Keep it Simple and Smart
As this example has shown, the analysis can also be very simple. It is important that you use them. As an active trader, no matter which instrument you trade, you cannot avoid doing reasonable analyzes. You will often come across the expression "Keep it Simple and Smart". A widespread attitude to analysis, which is represented even by professionals. The idea behind this is not to be distracted by too many analysis parameters and to concentrate only on the essentials.
The essential property of binary options is the simplicity of the structure of these instruments. The expression above also applies here. The broker OptionFair also offers a clear trading platform and is a reliable broker thanks to its EU regulation. An education center rounds off the offer for beginners and contributes to a substantial reduction in complexity.