You want a binary options system to make money with? Let’s create one! Here’s everything you need to know in one easily-comprehensible guide.
We will start building your system from scratch, adapting it to your personality with every step. In the end, you will exactly know what your binary options system could look like. To create your perfect binary options system, we will follow these steps:
|1||Who are you?||Defining your trading personality and adjusting your system accordingly.|
|2||How much time do you have?||Defining how much trades your system should create per day.|
|3||What do you know about?||Defining the asset you should trade.|
Creating your binary options system
Follow these three steps to find your optimal binary options system:
Step 1: Who are you?
This is the most crucial step of defining your trading system. In binary options, there are hundreds of possible systems that can work, but there is only one system that can work for you. Which system that is depends on who you are.
The most critical aspect of your character you should consider is your attitude towards risk. Some traders like to take risk, some do not, and both types of traders should trade significantly different systems with different types of assets:
- Forcing risk-averse traders to work within a risky system will cause them to panic and make mistakes.
- Forcing risky traders to trade a safe system will bore them, causing them to make mistakes in the search for excitement.
Consequently, the first question you have to answer on your way to binary options success is how you think about risk in trading. Depending on your answer, you should build your system accordingly.
Risk-averse traders should:
- Trade mainly high / low options. High / low options allow you to win the highest percentage of your trades (about 60 to 70 percent), which provides risk-averse traders with the peace of mind they need to stick to their system.
- Focus on medium to long expiries: On short time frames, the market moves randomly and nervous, requiring a trader that can deal with the unique psychological challenges of this environment. For risk-averse traders, this environment is difficult to handle allowing for less profit than longer time frames, which are smoother to trade.
- Invest a small fixed percentage of their account balance per trade, ideally around 1 to 2 percent.
Traders who like risk should:
- Trade mainly one touch options: One touch options offer considerably higher payouts than high low options but also include more risk. With payouts of up to 500 percent, winning 30 percent of your trades is enough to make money with one touch options, providing risky traders with the exciting trading environment that will make them enjoy trading and be successful.
- Focus on short expiries: On short time frames, the market is often nervous, which makes it difficult to make accurate predictions. Nonetheless, investing with a shorter expiry allows you to make more trades in the same period of time. The risky trader will learn to love the higher earning potential shorter expiries generate.
- Invest a larger fixed percentage of their account balance per trade, ideally 3 to 5 percent.
Step 2: How much time do you have?
Some traders have all day to make trades, some have only one hour to invest, and some can only trade in small bursts, for example while they are on the train. Each type of trader should adapt his trading system accordingly:
Traders who are short on time should:
- Focus on 60 seconds options over high / low options. Both types of binary options work in exactly the same way, but 60 seconds options have much shorter expiries of 30 to 300 seconds, making it much easier to find an investment opportunity during a bus ride.
- Avoid complex strategies that require multiple indicators or complex analysis. One of the best ways to quickly find trading opportunities are simple candlestick formations, which allow you to find an investment with one glance at the market.
Traders who have more time to invest can use any tool they like to analyze the market. They can combine trend analysis, simple and complex candlestick formations, resistance and support lines, and technical indicators to any strategy they like.
Step 3: What do you know about?
Depending on where you come from, what your interest are, and what you do for work, you will have a unique insight into some aspects of the market. This insight can be good or bad:
- If you want to trade a system based on technical analysis, you should trade assets that you know nothing about. The technical analysis focuses exclusively on price movements, and any knowledge of the company, the commodity, or the currency can only distort your analysis.
- If you want to trade a news-based system, you should trade assets that you know well. Traders who use a news-based system can use their knowledge to their advantage by picking assets that they know well and can interpret better than other assets.
With these three steps, you know everything you need to know about creating your trading system. You know which assets to trade, which binary options type to use, and how to generate signals. Define your system, practice it, and you should soon be able to make money with it.
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