Binary options strategy for beginners.
Even if you are new as a binary options trader, it is a good idea to use a binary options strategy for your trades so you can improve the accuracy of your trades. Binary options strategies for beginners can be as simple as identifying a certain trend for a particular financial asset or using a defined strategy, such as a hedging strategy.
Let Unifunds teach you the strategies that you can use when first starting out as a trader in binary options.
As a trader who is just starting out, you need to invest time into learning more about financial assets.
First of all, Unifunds advise you to select a financial asset that you have some familiarity with, so you can use that existing knowledge towards your trades. Once you have decided the asset to trade on, there are different ways you can identify trends on the chosen asset, such as financial news related to the stock and chart analyses in order to predict the stock’s direction of change.
Let’s say, for example, that you decide to trade on JPMorgan Chase & Co.’s stock. If you notice the value of JPMorgan’s stock typically moves on a downward trend after a negative quarterly earnings announcement, you will want to monitor these events every quarter. Similarly, if you identify a trend in the change in value after JPMorgan announces a change in senior management, you should take note of this signal and continue to monitor the news for future announcements of this kind.
This is a simple and straightforward strategy that can be used by all traders, both old and new. If you use nothing else but this strategy, you can still increase the chances of successfully predicting the asset’s direction of change in value and by that achieve successful returns.
Another one of the binary options strategies Unifunds recommends for beginners is applying a binary options hedging strategy.
would execute a call and put option at the same time – the call option is hedged by the put and the put option is hedged by the call.
As an example, let’s say you execute a call and put option on the Dow Jones market index. If you believe the Dow Jones will rise by the end of the trading day but will likely decline again by the end of the trading week, you would execute an hourly binary call option and a weekly binary put option on the Dow Jones at the same time.
With this example, you are hedging your trades on the Dow Jones so in case one of the options expires out of the money, the other option will cover its losses. By using this strategy, you also have a chance to have both options to expire in the money, and by that, you can double your profits.
A hedging strategy helps you to protect your position on a specific trade, manage your losses and maximise your earning potential. For beginners, it is a very straightforward strategy to implement as it allows you to apply the knowledge you acquire from monitoring a financial asset. As you observe trends, you’ll be able to see patterns on how sensitive assets are to market announcements and events to improve your returns.
These binary options strategies for beginners can help you to make the most out of your very first trades and start you out on the right foot. By applying these simple strategies you can be one step closer to improving the accuracy of your trades and accelerating your knowledge as a binary options trader.
General risk warning: Trading in Binary Options is highly speculative and carries a high level of risk, which can result in the loss of part or all of your funds. As such, trading Binary Options may not be appropriate or suitable for all traders. You are strongly advised not to speculate with capital that you cannot afford to lose. Before deciding to trade, you should be aware of all the risks associated with Binary Options trading and seek professional advice from an independent and licensed financial advisor.