There are many different sub-styles of trading within the world of binary options. It’s really important that you try and narrow your focus as a trader, even within a type of trading that is so simple. The more focused your trading is, the easier it will be to master a small portion of the market, and this will help you to increase your correct trade rate. This is a key component of being successful over the long run and will be a big boost to your profits as you learn more about binary trading.
Here are a few of the major types and styles you will see going forward.
Calls and Puts
Call and put options are the most basic form. A call option is used if you think the price of the asset will go up, and put options are used if you think that the price will go down. These can be applied to any timeframe that the broker offers as they are the basic building block. These are also known as High/Low as well. If you see platforms that say High/Low, you’ll know what to look for.
Touch and No Touch
The touch and no touch option is a bit more advanced, but they are still pretty self explanatory. With this choice, you are supplied with a price and you need to predict whether this price will be reached over the course of the trades life (touch) or whether prices will not move that far (no touch). This type of option can sometimes have a very high payout (up to 500 percent depending upon the broker) if the established price is far enough away. These are called high yield options and should only be used occasionally as they are very hard to be correct with.
A boundary option occurs when the broker supplies you with two prices. You need to select whether you think the price will end up between those two prices or if it will travel outside of the boundary that is previously agreed upon. Not all brokers offer boundary trades.
10 minute options
This is one of the most common types of trades. Many brokers use this limit as their default time limit, so this is probably the best place for you to begin. Ten minute options require a mixture of different types of analysis that you need to master in order to be successful. The thing to remember here is that in the vast majority of instances, you will want to trade with the overall trend. This means that you need to be familiar with daily price charts so that you can get a good feel of how the price is moving over the course of the given day. Trading with the trend will give you much better results than if you try to predict a reversal. Read more about 10 Minute Binaries.
60 second options
This is a newer type of trading and it requires a good eye for the little things that influence prices. You will find that 60 second binary options are very fast paced and that they often seem like they have a mind of their own. More and more brokers are picking up this type of option because they are very popular. However, you will find that because they are so fast paced most brokers have lower rates of return for 60 second options than they do for options with further expiration times. If you want to trade 60 second binary options, you will need to be sure that you have a higher than average correct trade rate.
You can find binary options on some brokers with expiration times several hours out into the future. These should almost always be traded in regards to what the overarching trend is. You will find that fundamental analysis methods will be helpful here and you will definitely want to utilize this when researching which position to take. Ideally, the further away the expiration time is, the more reliant upon fundamental analysis you will want to be. This is because the longer the trade is open, the more other traders will be looking at the overall health of the asset and the less reliant they will be on the subtle price chart nuances.