A large number of binary options platforms now contain a percentage bar known as Traders Choice. This bar represents the total number of individuals who have opted for each side of a trade. When the percentage for one side is clearly larger than that of the other, it is easy to assume that that selection is the correct one, but is it really? Consider the following before using the Traders Choice tool as a consideration when making trade decisions.
The downside of using TC is that there really isn’t any way to know exactly why more traders are opting for one side over the other. They could be making their decision based on price action, market news, perceived investor sentiment, or even binary options signals. Your own personal analysis is required, even if a large number of traders have selected the same position. When the percentage is extremely high, it could be as such because traders are simply going along with the majority, and skipping over the analysis process.
The Traders Choice bar should be used more as a general guide than anything else, as they can point out interesting trade setups. When many traders are opting for the same position, this tells you that the trade is worthy of a closer look. It could very well be that they are correct in their estimations, but it will remain your task to determine why the expected price movement is as it is. Unless you are able to validate one or more reasons as to why one position is being chosen over the other, it is probably wise to move on to different opportunities.
In addition to TC, a list of Hot Trades may be presented. These are contracts which are actively being purchased by those who use that specific binary options platform. These can also be used as a guide, pointing out setups that could prove profitable. Hot Trades may or may not include the Traders Choice bar, depending on the platform design, but in many cases you will find them together. When combined, these two tools do have the power to point you in the right direction when searching for opportunities to enter the market.
Never assume that a trade will finish in the money just because a large number of traders are making one selection over the other. Even if 85% have opted for a Call position, there is no guarantee that a Put position would not have been the correct choice. The analysis process can be a challenge for new traders, but this tool can help by pointing out upcoming trades which many experienced traders have already analyzed. The task then becomes to find out what it is they saw in the news and charts that made them opt for one side of the trade over the other.
When used correctly, Traders Choice and Hot Trades can be helpful tools. Although one should never feel compelled to use them, they do provide certain benefits, especially to those who find it difficult to select their trades. Most binary options platforms do contain a large number of underlying assets, which can make it tough to narrow down the choices. The aforementioned tools can do the work for you by pointing to active contracts within the platform.