Finding or developing a trading method is the hardest thing for new or novice traders because they don’t know what they don’t know. As silly as that statement may sound, it’s true. Finding your method is a matter of knowing what to screen for, and when you don’t even know what trading success is based on, that can be in practice, almost impossible.
There are as many different strategies as there are different snowflakes in a Chicago snow storm. So what is the most important thing? One thing that can be stated strongly is, choosing a strategy that has solid targets, is of very high value in binary trading. Binary options have targets built in, but how often have you seen your trade rise above the strike you chose to buy, only to move back below it, or vice versa on a sell? If you use a strategy that has a profit target, you can choose binary strikes well short of your target to place a trade. Note on the crude oil chart below, that the PTP double bottom has a measured move target, but the smart binary trading choice would be buying a strike well short of the actual price action target of the pattern.
This type of planning gives you a higher probability of success and more options in terms of letting the trade expire, or exiting the trade early at a profit, since Nadex does allow that. The point to take away is, direction by itself doesn’t give you good binary trades. It isn’t enough. Targets, give you the direction and they give you an idea of what to do with that knowledge.
Futures, options and swaps trading involve risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results