Binary
options trading is known as a short term trading and it is necessary
to find your own strategy to keep emotions aside and gain more from
the market because emotions is the main reason why such strategy
appeared.
If
you're not new to trading or at least you've followed some company
stock price trends, you might notice that sometimes company stocks
are overpriced or undervalued. This happens because many traders
(mostly speculators) are very careful and when they see some bad news
coming out about a company which stocks they own, they try to get rid
of them as quickly as possible without a significant reason or vice
versa if news are in favor of the company. Of course, because of
this, company stock prices will change noticeably. I.e. these can be
rumors or news that could affect trader’s decision.
As
such things happen, you can be careful and try to notice it and even
benefit from it. In binary options trading there are not that many assets yet
that traders can trade. So it is easy to notice if some bigger price
changes show up. Most likely you'll be able to read about it in most
daily market review websites. So what can you do about it? I.e. you
notice that Baidu stocks yesterday were traded for $93.05 and today
when the market opened they dropped to $85.60 which is -8%. For such
company there should be a reason why it happened. Try to analyze and
understand why did it happen and is it really that important to
affect stock price to drop -8%. Follow the trend for some time and if
it is not decreasing anymore it might be the right time to buy a call
option because it might stabilize a bit in the next few hours.
Few
important tips:
- This is not a long term strategy, it is better to use it only for short term trades like 30 minutes, 1 hour;
- Do not use it on 60 second trades, it might be too short;
- The best moment to use the reversal strategy is when the market opens and you can quickly go through the latest news to find a company or an asset that might fit these conditions.
yes I agree with the post. many times new affects the trading decision. generally this situation is seen in the beginners.
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