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Binary Options Money Making Strategy
Binary options trading has been been around for a few years now, serving as a great tool for fast and relatively easy investments and profits.
As in any investment tool, there are risks involved in binary options trading but in the below short tutorial we will try and help you to minimize the risks and maximizing your profit potential.
But first, What are binary options?
Binary options are called “binary” because there are only two possible outcomes for a binary option trade:
- Either the option will finish up (or above) from its starting value at time of purchase.
- The option will finish down (or below) from its starting value at time of purchase.
As an investor, when you purchase a binary option (an underlying asset) you are given two options to choose from, either 1 the option will finish up meaning its price will be higher than before or 2 – the binary option will finish with lower price than before.
One of the two options will most likely to occur (there is always the rare scenario where the price stays the same and then you are returned your full investment amount as nothing happened)
The expiry time set to the option indicates when the option will reach its final value and according to that value you know if you won and made a successful investment or not.
If you chose up (call) and the option’s final price at the expiry time is above the value of the option when you first invested you won and made a successful trade.
If you chose down and the final price is higher than the value when you first invested then your investment was unsuccessful.
THIS BASICALLY MEAN THAT BINARY OPTIONS TRADING OFFERS AT LEAST 50/50 CHANCE OF WINNING!
How can you increase the odds to more than 50/50?
What is a good binary options trading strategy?
Even though a 50/50 odds of winning is pretty good, you can increase the likelihood of choosing the right direction of the option by being selective of the binary options you choose to invest in by making sure the below two conditions are met:
1. CURRENT OPTION VALUE IS HIGHER (ABOVE) COMPARED TO IT’S VALUE IN THE PERIOD OF TIME SHOWN IN THE OPTION’S GRAPH
As seen clearly in the picture, the first condition is met when the option’s price is higher than displayed in the period of time shown in the graph.
2. MAJORITY OF TRADERS ARE CHOOSING DOWN (PUT) OPTION ON THE POPULARITY INDEX
Again, the condition is met with a majority of users choosing the PUT option on the price.
If both conditions are met, invest immediately in this option – choose the put option, decide on the amount to invest and see it through.
But what should i do if the opposite scenario happens?
Simple. Do the same.
When you see that both conditions below are met:
1. CURRENT OPTION VALUE IS LOWER (BELOW) COMPARED TO IT’S VALUE IN THE PERIOD OF TIME SHOWN IN THE OPTION’S GRAPH
2. MAJORITY OF TRADERS ARE CHOOSING Call (UP) OPTION ON THE POPULARITY INDEX
like in this example:
again, If both condition are met, invest immediately in this option – choose the Call option, decide on the amount to invest and apply for approval.
Try to select options that expire within 30 minutes from when the market conditions are met.
How does this works?
The basic concept of option balance occurs and this can indicate of an overvalued option or of an undervalued option.
Everyone are trying to sell their assets at the best price and buy at the lowest possible and a balance emerges.
When an asset is in demand it’s value goes up, which causes the trades to lose their interest since it’s price went up – option is overvalued.
On the other hand, when an asset is not in demand and traders want to sell it, it’s price goes down, which causes the traders to gain interest in the asset – the option is undervalued.
When you identify one of these situations – the highest or lowest price for an option compared to the previous time displayed in it’s graph, it may be a sign of an overvalued or undervalued option – and this is where you can strike and make a profit.
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