Counterbalancing Potential Losses in Binary Options

Counterbalancing Potential Losses in Binary Options

Submitted by adil on Fri, 03/20/2015 - 08:27

Fear of failure can hinder in your success. Risks are always involved in trading but a successful trader learns how to lower those risks and counterbalance the losses. There are effective strategies which traders can use to lessen the losses and increase potential gains. In binary options trading, it is of the foremost importance to select the right broker. Reliability and fairness of the broker should be considered.

There are some trading platforms which offer loss offset. In that case, even if you lose a trade, you will not lose all of your investment. It works like insurance in a way that you sacrifice a part of your earnings to make sure you get something in return even in losses.

Say if you predict that the price of a certain stock will rise at the end of the trade and you place a call option of $100. Now from those $100 dollar invested, you will set aside a certain percentage, say 12%, as insurance. In case your call goes wrong and you lose the trade, you will receive 12% loss offset i.e. $12 and in case you win, you will get your profit but $12 goes to the broker.

Certain platforms offer very good and healthy bonus options. Even though receiving bonuses is not the only important thing because you have to keep in mind many other factors while choosing a brokerage but these bonuses can compensate for the losses you bear in trading. Many of the good bonuses plan are made only for new account holders. In that case, you can also sign up with more than one broker to utilize this benefit.  Some of the attractive bonuses programs can be these. The broker allows you to do a certain number of trades without the risk factor involved. Some brokers also offer deposit bonus i.e. you get credit for depositing money in your account. Some brokers ask you to request your friends for signing up with them, for each request accepted you get a bonus. Some brokers even offer no-deposit bonus, for that only signing up is required and you do not need to deposit money to get the bonus.

The most important thing after choosing the broker is to make an effective strategy and a detailed plan for your trade. The ignorance to this factor leads to early failure in many cases. Also, when a trader starts accepting his failures, only then he becomes able to minimize their effect and turn those failures into success.

Some of the effective strategies can be Stop Loss Trading, Paring and Index Asset Divergence Trade. The key to their booming use is to keep in mind the fundamental and technical economic indicators. This is to be understood that all strategies do not work similarly in all kinds of trades and one strategy might not be enough for a single trade.

For beginners and unsure traders, playing both sides can be a good start off and learning experience. When you are not sure about the coming trend, play both options: call and put. In this way you are sure to win in any one of them, and it gives you knowledge and experience to utilize in the future.