Binary options trading is one of the most technically advanced types of financial trading. From the very beginning, binary options were based on internet technology and dependable on technological advance. This type of trading was developed in the internet age and there was no need to adjust it to new technologies like some other types of trading, but some old techniques and tools are still used for market analysis.
Many traders neglect the importance of all possibilities the modern trading platforms provide. Platforms are nowadays equipped with trading instruments, tools and features that can help traders increase their profit, but only if they know how to use them. Following the chart available in platform doesn’t provide enough information for successful trading, as traders must know how to analyze it. That’s when tools come into scene.
More about charts read in Academy.
Some tools should be used directly on the chart, before even making a trade, during the process of analysis, while others are meant to be used during trading, in case something goes wrong, or trader simply recognizes there is the possibility to make most out of the good opportunity.
Here is the list of 5 most important tools that can help traders maximize their opportunities in binary options trading.
There are many charts that are used for financial trading, and candlesticks are among most popular and most useful ones. Candlesticks were developed by Homma Munehisa, rice trader from Japan. Besides creating candlesticks technique, he was also among the first to recognize the importance of psychology in trading in his book “The Fountain of Gold – The Three Monkey Record of Money”.
Every candlestick represents certain time frame (like one day), and their color represents the direction. White or green candlesticks are a sign that the price goes up while black or red color stands for downward direction.
Every candlestick has two parts – body and wick. The longer the wick, the bigger the chances that market will move in the opposite direction. This information can be used as a signal, but is better to confirm the information by using other tools as well. Candlesticks should be used as part of the analysis prior to the trade execution.
More about candlesticks (also known as bricks or columns) can be found here.
Support and resistance levels
No matter what type of chart trader is using, support and resistance levels are of crucial importance. Chart can be in shape of candlestick, lines etc., but there are two lines that can change the direction of entire process. Resistance and support lines should be seen as possible limits in market movements.
Resistance level or line is a line that is placed on the top of the chart. It shows the highest values over the selected time frame. This line basically resists the urge of the trend to break it. The support line is on the bottom of the chart and is calculated based on lowest price values. It supports the uptrend.
Here is an example. Trader wants to trade binary options on certain asset whose price maximum, in certain period of time never crossed $50. This means that $50 can be considered resistance level. After the price of the asset is getting closer to $50, there are bigger chances it will change the direction, and trader should invest in put options.
Rollover and DoubleUp
These two tools should be used after the purchase is made. Sometimes traders place reckless trades, but sometimes market takes an unexpected turn. Even though binary options are considered to be one of the safest types of financial trading, there is no 100% guarantee of success. Reason for this is that it can happen that events outside financial sector influence the market (war, natural disasters etc.).
More on various tools provided by different platforms find here.
In cases when things are going differently from the plan, there is still a chance to make a profit. Rollover allows a trader to extend the expiry time. This can be useful when a trader knows he made the right decision and that it takes just a bit more time to achieve profit.
DoubleUp is another useful tool that can be used to increase profit. It can be used in case when trader believes the adverse price is not here to stay, he chooses to double the investment, but also double the profit in case of success.
Sell and Buy
Brokers are really doing their best to provide full service to their traders. As the competition in the binary industry is getting bigger and bigger, brokers are forced to provide more and more useful tools. Such tools are sell and buy, but traders are sometimes intimidated by their strong names.
The logic behind these tools is easy and simple. A trader buys an option for $10, but the price movement takes an unexpected turn. The trader can use sell tool in order to gain part of the investment back. In the case the trade really ends the wrong way, the trader didn’t lose entire sum, but only part of it, and still has, let’s say $6 from the investment.
On the other side of the planet, there is a trader that believes that this is a valuable trade that will end up in profit. He buys it and continues to trade with it.
Many lines of text are written about demo accounts. And while the demo account is not a tool per se, it can be considered one as nothing helps traders improve their trading as it does. Demo account is the best tool for learning binary options trading.
Demo accounts are equipped with same tools, assets and options types as a real trading platform. They help inexperienced traders to learn how to use various tools but experienced traders can profit from it as well. For example, they can test their strategies and analysis, and that way, optimize their trading results and achieve better profits. All this can be done by using virtual funds provided with the account. Those funds are not real profit but act as the real money on the demo account. Traders can multiply the funds, or lose them, depending on their skills, but the real money will stay intact. Such accounts are usually limited to a certain period of time, usually seven days. It is still a great opportunity for all binary options traders to become more successful in the trading process. After the demo trading has been experienced, trading on real money platform should be more successful and pleasant experience.
24option Robot – Is there a Free Demo?
Many traders want to trade with 24option robot. Please understand how this popular broker doesn’t have a special robot trading software integrated on the platform that will allow you direct automated trading. This is simply not part of their business model.
However, you can trade popular currency pairs based on signals provided by FXMasterBot, a unique auto trading software that serves as 24option robot service. 24option robot, in this case, FXMasterBot, will help you trade more efficient thanks to live streamed signals based on real market data. Simply use the information provided by the FXMasterBot signals and trade with 24option like you would do it with 24option robot – by using free signals!