pocket option review is one of the most reliable brokers in Binary Options. Forex trading in binary options is often called easier than spot forex. How could that be? You only need to choose “call” when you expect the price to go up, or “put” when you believe the price will go down. There is no calculation of lots, spreads and how much you will profit or loss can be immediately known even before entering. But still, to be able to find out where the price is moving, you have to do an analysis and have a special strategy in order to get the desired profit. Your trading will not be successful if you don’t pay attention to these two important aspects:
Fundamental Analysis
Paying attention to fundamental releases is an important component that you should always pay attention to, as this can have a huge impact on your trading decisions. For example, the choice of options with more capital in a risk reversal strategy can also be influenced by the release of fundamental data. By observing the fundamental price driving factors, you will be able to anticipate changes in trends, volatility, market sentiment, as well as the best entry moments.
Risk Management
This section is an aspect of trading that you should always include. Although the five strategies above can be called the best, still none of them can bring definite results. In other words, the profit figure is only a possibility, as well as the potential loss. Here, risk management can be used to limit losses to a level that suits your tolerance limit. Therefore, regardless of the type of strategy, always compliment your trading system with risk management.
To ensure successful trading in binary options, time adjustments are not only focused on setting the expiry time. There are 3 types of timing that can determine your success in trading binary options, namely choosing the best trading time, which time frame should be used, as well as knowing at any time when trading is not right.
The above problems can probably be ruled out with general answers such as taking the most active market session for trading time, choosing a time frame according to the trading period, and avoiding the less active trading time. The three answers are not wrong, but it’s good if you look at this problem further to be able to find the most appropriate binary options trading plan. For example, when taking the most active market session for the time of trading, which market is meant? Do all markets for binary options instruments have the same active time? Then for the time frame selection, is it enough just to identify it according to the trading period? Furthermore, when can the instrument market be said to be less active?
Finding the Right Trading Time
As one of the online trading systems that provide access to various types of instruments, binary options allow you to trade with any financial instrument, whenever and wherever you are. However, not all instruments have the same level of liquidity and volatility. Each instrument has different market opening times. For example, the forex market is available 24 hours a day from Monday to Friday, while the stock market is only open during business hours. Not only that, you also need to adjust the type of instrument being traded, such as the USD/JPY pair which moves quite significantly in the Tokyo session and is active again in the New York session, or stock instruments from the US market whose trading hours are opened only during US business hours.
Finding the Right Time Frame
For technical traders, determining the time frame is one of the most important steps that can support their trading strategy. At first glance, the use of this type of time frame can be quite adapted to the trading time frame, such as the minute to the hourly time frame for short-term traders and daily to monthly time frames for long-term traders. However, in reviews of several trading strategies, it is always recommended not to rely solely on price analysis in the one-time frame. Short-term traders still need to analyze higher time frames to find out the overall trend direction, while long-term traders sometimes need to look at lower time frames to find the right entry position. Then, which time frames can you use to support your trading system?
In the time frame selection process, there is a rule called “The Rule of Four”, which is the trader’s policy in dividing and multiplying the main time frame by number 4. Let’s say you choose the H1 chart as the main time frame that you usually observe to analyze price movements, the time frame can be the main chart to set the expiry time.
Avoiding Unfavorable Trading Times
Trading in binary options can be done by following the most active sessions of each selected instrument. In general, less liquid market movements on holidays or weekends can provide limited trading opportunities. So, in addition to considering the active time of the market on weekdays, you should also reduce trading activities on weekends or holidays. However, there are several binary options brokers that offer weekend trading with profit percentages of up to hundreds of percent. This method can bring benefits if you can use it well. This is because being able to maximize the lack of trading opportunities in the midst of quiet trading activities and low volatility can be a challenge, especially for experienced traders who have special strategies for trading in quiet markets.
Having the right timing for the three aspects above will be useful to help manage the binary options trading system. You can adjust the trading time according to the most promising trading session for the volatility of your trading instrument. The trading time frame is initially taken from your trading time frame, and then it can be calculated by the “The Rule of Four” formula to get the most ideal time frame recommendation. Meanwhile, you need to limit your binary options trading activities during financial market holidays. The most important thing is, use your trading plan properly, and try not to place options without calculations and definite goals.