If you are looking to invest in the fast lane of the money markets, you should consider the binary options market. Trades are quick and expire in as little as 60 seconds. This is why many day traders engage in binary options trading.
It is lucrative, but it is also tricky. If you are new to the market, you will likely incur losses – that is, unless you make use of these guidelines.
What is Day Trading in Binary Options?
Day trading is the most popular form of binary options trading. Traders place orders that they expect to close within 24 hours. Most orders placed last minutes or hours, but some go on for 24 hours. Most traders prefer day trading as returns are instant.
Interestingly, there is no limit to how long a binary options trade can stay open. Traders who are in it for the long term can set expiry times lasting days, months, and even a whole year.
What are the Typical Trade Periods?
Trade periods in day trading range from as little as 1 minute to as much as 24 hours with a wide range of interval in-between. Most radical traders prefer short period windows, while cautious traders prefer taking their time. The most common trading periods range from 30 minutes to 1 hour.
How to Make Profits and Avoid Losses
There is something fulfilling about day trading: at the end of the day, you can count how much you’ve made, or lost. However, it can be hectic. Trading windows are short, so there is pressure to get your choices right. This is why many day traders incur heavy losses and make little profit. Fortunately, there are ways to hack it.
- Have a Proper Trading Strategy
As mentioned, day trading can be hectic. Day traders can place dozens of orders in a single day. This is tedious, especially when you don’t have a good trading strategy. A good trading strategy will help you identify lucrative trades and avoid bad ones. It will also take some of the pressure off your shoulders and help you maintain your confidence and esteem.
Your trading strategy should be flawless. The latest fundamental and technical analysis should inspire your strategy. You should also consider using premium trading algorithms.
- Set Realistic Trading Periods
How much can an asset’s price change in one minute? Well, you never know considering how volatile the markets are.
Experienced traders know better than to place fast trades lasting a minute or five minutes. The truth is that a lot can change in this short window. The volatility involved is just too much to nurture confidence. Trades are easier to predict when there is more time to work with. This is why the ideal time periods range from 1 hour to 24 hours.
- Moderate Your Expectations
Everyone who gets into binary options trading with the intention of getting rich leaves disappointed. If you have high expectations, you will become frustrated after some time. The opportunities are endless here, but so are the risks. You need to take it one day at a time and grow your investment over time. You should consider binary options trading as a way to make extra income on the side before you can go all in.
Day trading is the way to go for most binary options traders. It is convenient but also risky. You need to be smart, or you will blow your investment. This article from fintechnews should give you a deeper understanding of binary options day trading.