In order to attain long lasting success as a binary trader, you have to stick to a clearly defined strategy. A strategy is basically an overall plan that steers your decision-making process as a trader.
A strategy will be defined by how high risks you are willing to take. Money management is another form of strategic consideration that you must make. Strategies are important because they determine what sort of a trader you are, which in turn decides what sort of binary options you should invest in.
Without a strategy you are pretty much investing on random, and trusting luck to lead the way to long-term profits. Needless to say, this is not likely to work out well. If you are interested in learning more about binary strategies, and how to make them work for you, please read on!
How to trade with binary strategies
Just to get this out of the way immediately: yes, you will need a strategy in order to make money on binary options. The reason for this is quite simply that you depend on sustained success over time in order to make serious money. And in order to keep making enough winning trades to turn a nice profit, you need a plan. You are not going to hit the target enough times to make money if you just play it by ear.
The most important strategic decision you need to make as a trader, is the choice between high risk and low risk investments. Both have considerable pros and cons. The choice is not between a strategy that is better than another, but which one fits best with you as a person.
What’s important is that you need to stick to your chosen strategy faithfully and patiently over time. This is because you will reduce your chances of earning money by swapping between the two different types of strategy. We can explain this by considering the following:
- A high risk strategy will yield fewer, bigger wins
- A low risk strategy will yield more, smaller wins
The consequence of this is that by sticking to one of the two strategies, over time, you will achieve the following:
- Enough big wins with a high risk strategy to earn a long term profit
- Enough small wins with a low risk strategy to earn a long term profit
On the other hand, if you swap and change you risk ending up in a situation where you don’t get the big high risk wins, and not enough small low risk wins to make a serious profit. Switching strategies is self-defeating.
There are several other strategic decisions you need to make as a trader. Some of the most important are:
- Money management – you have to invest a suitable amount of money in each trade. If you make investments that are too large, you risk running out of cash. If you invest too cautiously you won’t earn enough money to make an impact when you pick winning trades.
- Signals – do you wish to trust your own analysis of the market, or pay experts to provide you with recommendations in the shape of binary signals?
- Robots – do you wish to execute your own trades, or outsource the trading to the experts by using a binary robot?
When it comes to these strategic choices, it is especially important to be consistent with your money management. Set a fixed percentage of your funds to invest in every trade, and do not deviate. It is crucial that you do not panic in losing streaks or become reckless during winning streaks.
As for signals and robots, you can try them and see what you think. You might be a signal trader, you might be a robot trader, but you won’t know until you try.
What strategy should I choose?
As you can clearly see, strategies are important and will define you as a trader. But how to figure out which strategy is right for you?
As we mentioned in the previous paragraph, you can just try signals and robots to see if they’re right for you. Several signal providers offer free trials, so you can check them out without risk.
As for robots, the only robot worth considering in today’s market – BinaryOptionRobot – is free to use, so there is absolutely no reason not to try it.
When it comes to high risk or low risk, it becomes a question of your personality as a trader. Ask yourself the following questions:
- Do you prefer a) predictability, or b) excitement?
- Do you prefer a) to win often, or b) to win big?
- What’s more important, to a) not lose, or b) to win?
If you answered mostly a), you are probably a low risk trader, and if you chose mainly b) you are more likely to thrive with high risk trading. Basically it’s a question of whether it is more stimulating for you to win big a few times, or achieving a steady stream of smaller wins.
Binary strategies and robots
You need a strategy even if you use a binary robot to take care of your trading. This is especially true for money management, which, if anything, is even more important when you use a binary robot. The reason for this is obvious: by leaving the robot in charge, you will not be at hand to make sure the amount you invest remains a sound percentage of your total account balance.
The best robot out there, BinaryOptionRobot, also offers the chance to define what level of risk you would like the robot to trade with on your behalf. This gives you one more layer of control. Please note that this feature is only available to VIP members. You become a VIP member by recruiting a member for BinaryOptionRobot..