Picking the right asset to trade will come down to the timing of the markets and what is active at the moment. As a binary options trader you have access to Currencies, Stocks, Commodities, Indices, and more. This makes binary trading so great. You have access to all these possibilities no matter where you are and what broker you use.
Tip of the Day – Always consider your time frame when trading.
Ideally you want to understand one or two assets and be able to dissect it each day. This will allow you to stay focused and not have to worry about a ton of stocks or currencies going across your screen board. Say you stuck with one currency and one stock. You could trade the currency pretty much 24 hours a day the whole work week and trade your favorite stock when it’s active on the exchange it is traded on.
For example, the EURUSD is the most widely followed currency. Learn what it takes to trade it on a daily basis and keep practicing on a demo account. Once you get a feel of its daily swings you can start working on the strategies you plan to use. The key thing is to pick something that works for you and your schedule.Sometimes we get lost in our trading and need an outlet. This is why it is always nice to have a secondary option when it comes to trading. Let’s say during the US market session you want to watch stocks. It’s ideal watch a couple of stocks for a month or two and learn them inside out just like you did with the EURUSD. Say you watch Google (GOOG) and Exxon-Mobile (XOM) on your watch list. After some time watching these pairs or stocks you’ll be ready to trade.
Some Rules Before you Start Trading
- Learn the average daily range of each asset you plan to watch. – This will let you know if price gets extended. It helps you decide to take a put or call option.
- Practice trading on a binary trading demo account. By practicing what to do before you risk real money will allow you to become a stronger trader. Yes, this won’t help with the emotional side, but this will be discussed in the future.
- Keep an eye on any news event that may affect the particular asset you are watching at that time.
- Try to find out if the asset has a particular time it likes to wake up at or fall asleep. – This is something that will come with time.
Trading is not easy and although binary options are fairly easy to learn it’s best to have a complete understanding first. If you don’t pick the right stock, currency pair or whatever is available, you will not last long as a trader. If you put in the time and be realistic, things will come together over a period of time.
This leads to the next thing. Finding out what asset to trade. What floats your boat? Is there something that interests you out there? These type of questions may be strange, but wouldn’t you rather trade something that you can understand versus something that is totally foreign to you. Never fall in love with an asset no matter what instrument you are trading.
The last thing you should think about is the payout rate you will get for the particular asset you choose. All brokers are different. Some offer 65% on some things, while you can see 85% on others. This shouldn’t completely alter your choice. If you can get the better payout for the asset you want to follow, you’ll be in even better shape. Brokers like 24option offer payouts on the EURUSD of 85%. This is the best in the industry, so it makes sense to trade this pair vs. the AUDUSD which may only pay 80%.
Don’t let payout rate make your decision. Let it give you guide when going through your selection process. It’s one of those things you’ll have to make a decision about with your binary options trading.
Figuring out what to trade is probably the hardest thing for new traders. Once this is done you will be on your way to becoming a better and stronger trader.