A good binary options strategy is an invaluable tool – it can lead to higher revenues in shorter amounts of time. But how do you differentiate between genuine strategies that will improve your results and fraudulent attempts that are really only trying to sell you something? Is there a real strategy that is completely foolproof? Read on to find out.
First and foremost, a strategy isn’t selecting high or low – it is the reason for making that decision. While this may seem obvious, remember that binary options are designed to allow people with virtually no previous experience to trade the markets, making them susceptible to a wide variety of scams.
This marks our first piece of advice: make sure there is an actual logic behind the decisions being dictated by one strategy or another. Some refer to this as the entry condition; while the reasons behind each action vary greatly among strategies, be sure to understand clearly why such a decision is made.
This brings us to exit conditions – these are the condition under which you should exit a trade prematurely. In some situations, an asset can move so drastically that completing the option in accordance with the original expiry is simply not in your best interest. Moreover, early closure offers a part of your investment in return, something that won’t be achieved if the option goes on to its expiration.
One of the most important factors that determine your success is fund management.No matter how successful a strategy may be at directing you to the right decision, it must also dictate how large each investment should be. For example, one of the most common mistakes made by novice traders is to make trades that are too large for their total available funds. Whichever the strategy, it is best to ensure that even if the trade isn’t profitable, you still have the means to recover through future trades.
It is important to remember to experiment with different strategies. As a rule of thumb, it is usually best to stay clear of strategies that guarantee results. When choosing a strategy, be sure to look for the aforementioned components – they are clear indications that real thought has been put into your strategy of choice.