On Friday, September 2nd, all of the major sectors in the United States ended up for the day. However, there was a noticeable range amongst the sectors, with some performing well in a very convincing manner, and others barely finishing in the black for the day. The best performing sector of the day was the energy sector, at a convincing 1.48 percent for the day. The cyclical consumer goods sector, on the other hand, barely made it into the positive numbers, ending up 0.17 percent for the day.
This tells us that although the market had a nice little Friday boost to help it finish up the week before the Labor Day break from trading, the market was stronger in some areas than it was in others. Traditional stock market day traders would have wanted to focus on the energy sector because of the quicker pace of gain, but for binary options traders, as long as the timing was correct, any sector would have been a good place to focus your attention. This is why binary traders have higher rates of success, generally speaking, when they focus on indices rather than individual stocks. Stocks can be predictable, but in situations where every sector is moving consistently in the same direction, the supporting indices are much easier to predict than sectors themselves, and even more so than the stocks that make up a sector.
Let’s look at an example.
The technology sector rose by a margin of 0.44 percent on Friday. This is a decent amount, but the gains were not large enough to successfully day trade ETFs with high frequency and high accuracy in most instances. However, Apple received a huge amount of volume on Friday and finished up 0.94 percent for the day, outpacing the rest of the sector by a good amount. Taking out call options on Apple would have been much more lucrative given a random sampling of times than if you had traded the sector as a whole. The Dow Jones Industrial Average, which Apple is a member of, rose by 0.39 percent. The NASDAQ which contains many tech stocks, rose by 0.43 percent. In this instance, Apple performed at the strongest level, better than the tech sector, and better than either of the indices which contain it. But was Apple the best choice for your purposes?
It depends on what you were trading. If you were trading traditional stocks, then yes. Apple was where your attention would have had the highest payout, especially if you bought at the closing price from the previous day. If you were trading binary options, then Apple might not have been the best choice. Apple’s price did not rise $1.00 slowly and steadily over the course of the day. Yes, this is how much it gained from the opening bell to the closing, but the gains were far from even. In fact, Apple’s opening price was much higher than its closing from the previous day, and at first, Apple lost quite a bit. It wasn’t until about 1:00 Eastern that Apple started seeing steady upward movement. Beforehand, it was mostly dropping in price, with small bounces here and there. Binary options traders need to be aware of this acute oscillation, especially if they focus on 15 minute expiries or shorter. Oscillation is the name of the game in day trading, and binary options traders are at the mercy of this far more often than other traders because of the fact that once they open up a trade, they are under the pressure of time. Getting a feel for this and then accounting for it is a must if you want to be successful, even when stocks, sectors, and whole indices are seemingly in agreement with each other.
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