The most important factor to your success as a binary options trader is your trading strategy. When most new binary options traders understand this, they start looking for the best binary options trading strategy available.
If you are one of these traders, this article will help you on your search.
How to find the best binary options trading strategy
First of all, you have to understand that there is no such thing as a perfect binary options trading strategy. In your search for the best strategy, you therefore have to be willing to accept some disadvantages that every strategy has. If you expect perfection, you will never find a trading strategy you like. Therefore, the first step of finding the best binary options strategy is to stop trying to find a perfect strategy.
Instead, trying to find the best binary options trading strategy resembles trying to find the best partner: First and foremost, you have to know which positive features you cannot live without, and which negative features you can live with. When you know this, you can easily determine which strategy does suit your criteria and which does not.
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As with choosing a partner, you should define your personal profile first and then try to find a good match for that. To help you with that task, here are a few factors you should consider:
1) Your desire to be right
The most fundamental difference between traders is there need to be right. Some traders can live with making the wrong prediction in the majority of their investments. These investors are perfectly suited for a risky strategy that can generate high rewards, maybe a strategy involving touch options.
Other traders, however, take every losing trade as a personal failure. If they choose a risky strategy, the amount of lost trades will drive them crazy, even if they make money at the end of the month. These traders need a more strategy that generates a higher winning percentage, even if that limits their possible gains. They could never endure a more risky strategy and would stray from it, which would limit their winning potential anyway.
2) Security / insecurity
We all have a need for security and insecurity. The difference between people is which need is stronger. Ask yourself if you can live with knowing that you are entering a highly risky trade that you are likely to lose money with. If so, you can trade more risky strategies and asset types likes touch and boundary options.
If the thought of losing money causes you to lose sleep, however, you should better stay with a more conventional approach using high / low options.
3) Possible gain / lifestyle
If you consider binary options your new job, you have to choose an appropriate strategy that allows you to become a full-time trader. A low risk, low reward strategy that generates one signal per day will not be enough to pay for your daily cost of living. You need a strategy that generates multiple signals per day and allows you a high possible return. Choose short time frames and consider a swing trading approach.
If you consider binary options a hobby that might generate some additional cash flow, however, you should use a calmer strategy. One relatively secure signal per day might just be exactly what you need. A strategy with ten signals per day will overwhelm you. Choose a longer time frame and think about becoming a trend following investor.
Your character defines the best binary options trading strategy for you
As you can see from these points, there is no such thing as a best binary options trading strategy for everyone. Everybody has its own version of the best trading strategy. Find your best version through solid planning, and maybe some thoroughly documented trial and error, and you are on your way to success with binary options.