A lot of different people are on the lookout for investment opportunities, and the majority of them seem strangely focused on the stock exchanges. This is not the only game in town! The combined markets for foreign currency exchange see more activity and more profit than the NYSE ever does. Trading as an individual investor in the currency exchange markets is a tricky business, though. If you’re going to test these waters by trying your hand at binary trading, here’s some helpful Tim Stafford advice to bear in mind.
* Keep Notes
You should always note down every trade you make when you’re buying and selling. Don’t trust your trading software to keep records for you; establish an independent log. You’ll want to review your past efforts on a regular basis. This allows you to both analyze the market and inspect your own trading behavior. Positive and negative trading habits that aren’t immediately obvious may be much clearer when you look at them in hindsight.
* Be Patient
Like a lot of less well-known investment techniques, binary trading has attracted a lot of hyperbole now that it’s suddenly become popular. Take anyone’s endorsement of binary trading – or a particular trading strategy – with a healthy grain of salt. This is not a get rich quick scheme. Earning money through binary investment requires plenty of capital investment and an extended learning period while you master the process. Don’t expect immediate results.
* Learn To Love Variance
There are several advanced binary trading concepts you need to study in greater depth, and variance is certainly one of them. Briefly stated, variance is a helpful force that can pull your overall trading balance back onto the positive side of the ledger, even if you’ve made several bad trades. Capitalize on the possibilities of variance by studying marketplace trends as they evolve and making smarter trades.
* Take Monday Off
Like most investment venues, the binary markets follow a regular cycle. As you gain experience, you’ll see for yourself that Mondays are virtually always the week’s slowest days. Overall activity levels are low, and the trades that are made tend to be hesitant. Major trends rarely develop and gather steam on Mondays. Don’t bother working hard on Mondays unless you come across an especially lucrative opportunity.
* Protect Your Cash Formula Information
Never lose sight of the fact that binary trading is a form of financial transaction. Even though you can spend hours doing it, you’re constantly passing sensitive financial data back and forth over your Internet connection. Make sure that connection is totally secure. Today mobile platforms for binary trading have become especially popular. Exercise extra caution if you’re trading with your phone or tablet, though, as public wifi connections are far less secure than permanent CAsh Formula networks.
* Follow The Trends
Most of the profits you’ll make in binary trading – especially in your early days – will be gained by following the trends in the market. In fact, your first task is to develop your talents for discerning marketplace trends quickly and accurately so that you can follow them better. Shelve the idea of trading against the market until you’ve got a great deal of experience under your belt. It takes talent, insight, and dedication to earn money going against the trends – and also a very healthy supply of capital to work with!
* Minimize Losses
Let this be the first lesson on binary trading you really internalize: Never add more money to a position that’s clearly turning into a loss. Doubling down is not a strategy for success in this environment; it’s merely a recipe for heartbreak. Attempting to salvage a position that’s turning sour feels instinctively right to a lot of novice traders, but it virtually never turns out well. Get used to walking away from bad trades; the way to make up for them is by making smarter choices the next time around.
* Use Faster Charts
As you gain experience with the Cash Formula foreign exchange markets, you’ll probably come to rely on charts to help you pinpoint emerging market trends. You’ll also likely gravitate towards a specific timeframe in your trades based on your personal preferences. While charts showing your preferred timeframe are helpful, you should also take the time to examine charts for the next shorter timeframe as well. If you’re primarily a day trader, for instance, examine hourly charts. On the faster charts, you’ll get a better idea of exactly just which times are most favorable for opening or closing positions.
* Don’t Dabble
When you’re first starting out with binary trades, you’ll likely be tempted to try exploring all the wonderful different currencies out there in the world. This can feel exciting, but it’s really a waste of your time. Choose just a few major currency pairs that are always trading at high volume and stick with them. You need to invest plenty of time in patient, in-depth trading to cultivate the skills and instincts you need to turn a profit. Learning the subtleties of any given currency pair takes time.
* Balance Your Budget Against Market Trends
To take full advantage of a favorable position, you need to have the financial resources required to hand onto it against temporary setbacks. While you should always make the current trend of the marketplace your deciding factor on when to take up positions, limit your overall exposure when you do so. Sinking more than three percent of your operating capital into any one position will leave you exposed to risk.
Binary trading on the Cash Formula foreign exchange markets can be a terrific way to leverage your financial assets and grow your resources. It’s a very active form of investment, though, so you must educate yourself thoroughly if you intend to earn money. The advice provided above should get you off to a good start.