Monday, September 9th, 2013 by James Franklen
Although your own analysis is essential to make a trade in binary options, you may still need help. This help is availed by many traders in the binary options market through options trading signals. These signals provide the probabilistic approach according to underlying analytic mechanics, about where the price would be moving, and hence which option one should purchase. Using binary options signals helps traders to confirm, retract or revisit their analysis. It also helps them to more successful trades, because these signals are generated through a strong strategy / theory based algorithm or engine. However, this does not guarantee success all the times, and you must add other factors to signals to make your number of trades more successful.
The element of trade planning with the help of signals tool helps you in getting better at number of times you make wins versus number of times you make losses. Whichever signals tool you are using, it provides you with number of trades that have become successful under a certain strategy. Use this statistic information to plan out your trades. For example, if the tool’s statistic states that 6 consecutive trades experienced losses according to signal A, then you should not incur more then 2 or 3 losses for the day relying on that signal. On the contrary, if signal B statistic shows that there have been 6 consecutive wins, you should stop your day’s trading after 3 wins. All this exercise of planning means that you take positive positions above average number of times and negative positions below average number of times.
It is here that you should exercise caution. Not all statistical information is 100% accurate in this regard. Therefore, there remains an element uncertain. This also means that what information that holds true at this point of time may not possibly hold the same truth at another point of time. On another note, research has shown that prices of assets will not go down for more than five consecutive runs 63% of the times. Prices tend to move nearer to their average after a time-period. This means that once a price sees 5 or 4 consecutive downturns, you can make a trade to eyeing the average price.
Finally, for all this to work; you need to be patient and self-disciplined. You need to control your urges, dispose-off noise from your analysis and focus on the broader factors affecting binary options trading. It will take time and practice on your part to really pick the broader market aspects quickly. For this, you should try your luck with full dedication on platforms that allow you demo accounts. This way you can practice more and not lose money doing so. The above stated forms of statistical information and planning will help you find clear opportunities in the market, and most importantly, it will help you keep your capital preserved. Preserving capital is a big problem for many new and amateur traders; they lose more money quickly and then earn the same or less.