Binary options are certainly one of the most popular ways of making money online. Its history can be traced back to 2007 when Options Clearing Corporation first advertised it a lot to drive the campaign to authorise them and 2008 when the Securities and Exchange Commission approved the listing of cash-or-nothing binary options. The investors can either Call or Put depending on whether they think the value of the property will increase or decrease respectively. Brokers often use the volume-weighted average of trades at expiration time to prevent price manipulation. There are many binary options platforms offering online trading. Even better is that there are binary options robots that do all the trading work for you.
The global market is always experiencing changes, and for one to succeed as a binary options investor, it’s important to understand the strategies that will maximise their chances of profiting from such changes. Read on to find out more about binary options trading tools that will make the most of your online investments.
Look out for breakout
Breakouts occur when prices trade with certain close-fitting ranges. Being able to identify a breakout level and anticipate for it to prevail in the market is an invaluable skill. It’s important to identify the momentum of the market when looking for a breakout, and this means executing your trades in times of low liquidity towards the end of the market. Factors to consider when it comes to a breakout trading strategy include avoiding early anticipation of a break, the right market for trading, set period and type of asset being traded, as well as adherence to the correct timing to avoid pullouts and whipsaws that come with breakouts.
Watch out for retracements
Retracements refer to price reversals that occur within larger trends. They are considered as the direction of price assets or markets. Unlike breakouts, retracements don’t imply that any given change is a larger trend. To use a retracement to your advantage, it’s vital that you wait until the first retracement is complete before entering a trade. This is because a completed retracement serves as confirmation that the price is headed in a certain direction. As such, waiting until completion of the first retracement increases your chances of making the right move because the counter movement will have already being tested by the market.
Identify resistance and support levels
A resistance level is a level that keeps the market from attaining higher levels after rejection has occurred at least twice while a support level is a level that keeps the market from attaining lower levels after experiencing rejection at least twice. One of three things i.e. stall, change direction or retrace can occur after the market has hit a support or resistance level. This information can help you design a trading strategy if you know how the market will adapt to these levels. It provides an insight into how the current prices are hesitating on different levels. It also allows you to estimate how the future prices will fluctuate in the case of support or resistance levels. Otherwise known as pivot levels, they help you estimate a viable expiry time for a given trade.