Binary Option Edge
One of the hardest parts about binary options trading is knowing when to go big, or when to stick to the normal grind of smaller trades. For example, Banc de Binary currently offers some bigger returning payouts on certain trades, but is going for these trades worthwhile? The answer is a bit complicated, unfortunately, as it depends upon the situation and your analysis. For the most part, unless you have a solid read on where markets are headed, these types of trades should generally be avoided because they tie up your money for longer periods of time. But the allure of a 210 percent payout is pretty high.
The first thing you need to do is compare the payout over the longer trade to the payouts that you would get on several short term trades over the same length of time. For one, why would you settle for just a 210 percent payout if you can get five 80 percent payouts over the same length of time? This is an obvious solution to going for the big payout, and of course, you won’t probably be right all five times, but still, being right even three times gives you a 240 percent profit margin right off the bat. Your losses will put you under the original mark you were aiming for, but this is still a big profit over a short amount of time. If you can be right four out of those five times, you are gaining 320 percent and losing 100 percent, still giving you a slightly higher return than the goal of 210 percent .
The fact is, if you are confident in the market direction of something, a mixture of the two is going to be in your best interests. By combining short and long term trades, you are widening your portfolio’s net, which can only lead to increased profits over time. Diversifying your portfolio helps alleviate risk, and these higher payout binary options are riskier . So by putting less money in them and balancing things out with lower risk trades, you will be doing the best thing for yourself. That is, if you feel strongly about one of these higher risk trades. If you are trading for the sake of trading, they are only very rarely a good idea and should usually just be avoided.
When you have an edge, you need to exploit it, but you need to do so correctly. Taking unnecessary big risks is not a smart career move, as any seasoned trader will tell you. By sticking to the lower risk trades, you will generally be able to make more money . but when you do see an advantage in the higher risk trades, you need to make sure that you are taking it, even if it is with a smaller amount than usual.