Stock Trading With the Help of Binary Options

Stock Trading With the Help of Binary Options

Submitted by adil on Mon, 03/09/2015 - 16:34

Trading stocks is very different from currency trading because of the difference of volatility; currency is categorically a more volatile asset. Another difference is that currency reflects the economic condition of a country or entity so there are multiple changes in the price movement during a single day. Also the forex market operates 24/7 so there are always news announcements coming up about spikes and falls in volatility.

Stock market on the other hand reflects the health of a company and news announcements come up either before or after trading hours. The trading hours are limited to only a certain part of the day and week - usually 7 hours a day and 5 days a week. Stock market also depends on national and international holidays. Hence the price movements are a lot smoother in stock market.

Using Binary Options in Stock Trading

Stock investment in traditional style is also very effective but binary options strategy has a number of benefits which traditional style does not offer. In this world of technology and hastiness, Binary Options saves a lot of your effort and time. All you need to do is choose a Yes or No option while investing in a stock. It does not require you to learn technical terminologies to be able to trade unlike the traditional manner.

Another benefit is that, binary options strategy holds you at a maximum risk. So even before trading, the trader is aware of the total potential loss involved.

One important element that needs to be understood is that in binary options, traders only invest in a share based on their idea about whether its prices will rise or fall. So unlike the traditional style, they do not have to purchase the underlying asset.

Successful Stock Trading in Binary Options

A very reliable method for carrying out successful trades with binary options is with the help of analysis. There are two key types of analysis available for binary options traders that can be conducted before making an investment. These include technical analysis and fundamental analysis.

Fundamental analysis: This type of analysis gives you some basic information regarding the movement of prices. It focuses on the asset market to collect data regarding the economic conditions, the market supply and demand and other such factors which can influence the price in the near future.

Technical analysis: This type of analysis is more concerned with technical data like graphs and charts which show the behavior of price. In technical analysis, traders look into the price movement pattern generated which tells them how price might rise or fall.

Some traders prefer one method of analysis over the other but the best practice would be to use a combination of both styles. This will give some fundamental knowledge about the economic and market conditions of the asset to the trader as well as the technical insight and will make it easier to craft correct decision. Hence, if you are able to predict the right movement, you will make a profit. In reverse case, you might face some loss.

The bottom line

There are some key factors which should be accounted for before placing binary options trades on a stock, these include the growth rate and annual sales of the company, the type of market which the company is targeting, and of course the economic condition of the country in which the company operates. All of these factors will help you in understanding the movement of the asset’s share prices. Some famous and successful international stocks include Google, Apple, Microsoft, Vodafone, Coca Cola and Nike etc. These are very large corporations and their shares are not only affected by national economy but also depend on global events.