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Binary Options Guide – Long And Short Term Strategy

November 9th, 2014 77 comments


Most individuals who start to trade with Binary Options, are usually involved with short term Binary  options that usually expire after a day or a few hours. However when a Forex Binary Options trader becomes more experienced he uses a long Term Binary Options Strategies, that expire after a couple of days or a weeks time. On the long terms, Binary Options Signals becomes more visible and Forex market tendencies are becoming more obvious . Usually a Forex Trader start investing on Short term options along with long Terms Binary Options.

Long Term options expire at a weeks time maximum, however these type of Binary Options could  expire after four or five days also. Short Term options usually expire on an hourly or  a daily bases and even a half an hours time.  For each of the Binary Options types, there are different Binary Options Strategies that should be implemented.

 

When trading in Short Terms; one well known Binary options Strategy, is to place both a “Put” and “Call” positions on the same trade, in other words one position opposing the other. In this manner, a trader secures his investment by covering both ways. This Binary Options Strategy is used when it is not clear on what direction the trade is going, whether an asset will go up or down. For Instance; a trader places a “Call” position on the AUD/Eur , he believes that the AUD will increase it’s value, but along the way he discovers that this is not the case. On such an event, it will be wise to also place a “Put” position, this is a  speculation that the asset will decrease its value, and by doing that the Binary Options Broker secures the money he invested on the “Call” position he placed earlier.Further more; If it becomes  clear on  where the trade is going let say for this example, that the AUD is dropping, it will be recommended to place another “Put” position, with this advanced Binary Options Strategy, a trader ends the binary options trading with  a profit ! The trader placed three positions all together and lost only one out of the three.

Another Options Strategies that demand some skills and understanding are called, Risk reversal  –  It will be much easier to explain the strategy with a good example.The idea here is to place a “call”position on an asset for the next 24 hours and watch closely if there is an un normal behavior regarding that asset. Let say a trader receives very reliable signals that an asset will sharply increase its value , over the next 24 hours. Suddenly for some reason, in a matter of a minute or seconds, the asset sharply declines for a couple of seconds, it will be very recommended to exploit this sudden situation an place a “Put” position on the short term (next 30 mins) on that asset, by doing that the trader increases his profits both on the very short term and also on the  daily option.It is important to understand how to trade binary options when an  asset sharply declines at some points along the daily trade. Within that gap a good Binary Options Strategy is to take advantage of that sudden unexpected sharp decline.

 

When trading on a long term, There are different Binary Options Strategies for different assets. A strategy implemented on Stocks would be different from one one taken on currencies. When trading currencies A Binary Trader must understand the relations and interaction between the currencies. However when trading on stocks, A trader must follow the increase and decrease of the stock’s value, which is influenced by some market elements like the price of commodities.

 

One well known long term strategy is called index asset divergence. The main principle here is to place two opposing positions on two related assets. An example will explain things much better. For instance; A trader receives good Binary Options signals about Apple’s Stock, he conducts a research, consults with Binary Options Guides, and reaches a conclusion that placing a “Call” position on that Stock could be very promising. After placing the “Call” position on Apple, he also places a “Put” position on the Index in which Apple’s stock is a part of. By doing that he secures his investment, and also has a very good chance of making a big profit.lets observe two possible scenarios; Apple’s stock falls for some reason, and The Binary Options broker’s prediction turn out  incorrect. Remember that the trader  also placed a “Put” position on the Index, which makes it very  likely that if Apple falls the index will also fall, by  doing that he almost eliminates his risk, because he placed a “Put” position on the Index which proved to be right.

Another scenario; The prediction on Apples stock is proves to be true, and stock is going up, and on the other hand, the Index is going down because other stocks are pulling the Index down, so both predictions may be true and the trader wins on both ends. Now this is a strategy that is done by experienced Traders who are familiar with the stock market, it is advised to take a Binary Options guide approval before doing such a complicated Binary Options Trading, and it is definitely not for rookies who do not have in depth understanding o Forex stock markets.I would say that  advanced Binary Options Trading is much more complex, and placing a “call” or a “put” position on an asset, demands a lot of consideration.

 

Another long Term strategy is; Commodity stock influence Strategy – The main idea here is to locate a change in a Commodity ‘s value, and see how it influences a stock or a bunch of stocks, and to what extend. For instance, If the price of Copper suddenly raises, it should definitely effect the company’s that relay on copper, like hardware or industries that deal with electronics. As a result of the raise of Copper price for instance, it is very likely that it will  influence the coast of manufacturing hardware that is now becoming  more expensive  and as a result, the market is less willing to buy the more expensive hardware that also results in a profit and stock decline. This could mean that companies like Intel and Cisco could sell less products, because their manufactured products coast is influenced strongly  on the price of Copper.

another scenario ;  this could also mean that those companies wont increase the price of their products and  they  suffer higher expenses and as a result the profit deceases. If a Commodity like oil for instance is going up and becomes more expensive, it could mean that companies that deeply relay on oil could be sharply effected, like Airlines and transportation companies. A Forex Trader should locate the increase or decrease in  the value of commodities, and successfully predict which stocks would be most effected by it.Usually  such affect is on a weekly bases or even longer, a Binary Options Trader must also locate previous patterns between a commodity and a stock in order to  fully understand the extend of  the influence of that Commodity on the stock.



I tried to cover most of the popular Binary Options Trading Strategies that are used by traders. I think that these considerations concludes  the question of what are binary options, it is clear that it is  much more then a placing of a “call and “put” position on an asset. A person who want to implement those strategies must also make sure that the Binary Options Trading System enables the buying assets that are needed to implement these binary options strategies.

If you are mentally  ready to get started, and devote yourself to change your economic reality, stop doubting yourself and use 6option easy to use tools that will aid you in being a successful trader. Don’t give up your dreams do something to change your reality, just like me and many other.

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