Binary Options Trading is becoming very popular due to the fact that traders can make profit off both declining and rising market prices.
In earlier posts by Secured Options, it
was mentioned that technical analysis plays a big role in determining where to
place binary options trades. There are very few traders that can be successful
at binary options trading without at least doing a little statistical analysis.
Statistical analysis is the key to predicting trading entry points and price
performance over time. If traders see price trends are strong in either
direction, the placing trades should be easy for them. If there is no strong
price trend in either direction, then trades will have to make their by looking
at historical price movement more closely.
Traders also have to look at the expiration time factors
closely when making a binary options trade. A trader will usually use recent
price performance data when making trades using shorter expiration times and
use underlying asset performance when making trades based on longer expiration
times. Statistical analysis will show traders the high and low prices of an
asset over a certain period of time. Although that same asset may go above or
below these analytical highs and lows, most likely they will remain within the
boundaries of them.
Most experience traders will assume that if an underlying
asset’s price moves close to a statistical boundary, the next thing that will
happen in the short term is a trend reversal. It is often at this point or near
it, that it’s a good time to place put or call options. On those rare occasions
that traders can still make a profitable trade, but be aware these are much
harder to predict and do not happen nearly as often as price movements within
the boundaries.
A very important thing to note is that
traders should never base a put or call option based on guesswork in Binary Options Trading. If that is the case and traders do
not have what they feel is concrete evidence to make a trade, then simply
forget about basing a trade off of that particular asset and move on.
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