How to choose the best binary options trading signals?
Signals for binary options are a good help in your trading. But do not take them as a guide to action.
Using the signals, you need to understand that this is the help in choosing the direction of the global asset movement. i.e. after the execution of the signal conditions (e.g. breakdown of level), you should look for entry points in this direction, and not to trade against.
Binary option trading, although it is a technically simple thing, requires a good understanding of what is happening in the market. Only in this way you will be able to make correct predictions about the future course of prices in order to buy a binary option, which eventually will bring you profit.
However, independent predictions can only be done by those traders who are already quite experienced and understand the major trends of the underlying asset, which they trade. If you’ve just come on the market, but still want to trade, what should you do in this case?
Currently, inexperienced traders have such an option as free trading signals, i.e, periodic recommendations on the purchase of a call or put option. In most cases you will receive forecasts for the movement schedule of a certain underlying asset.
For example, you will receive a message with the information that in the coming hours the appreciation of the euro relatively to the current level of it is forecasted. It gives you a reason to buy an hour option Call of the underlying asset of euro. To follow these recommendations is quite easy and affordable for any trader.
But, of course, it is not so simple in terms of the signals themselves and forecasts. It is very important, where exactly are these predictions to come, because it affects how accurate they are, and how much you can trust them.
How to choose free trading signals for binary options trading, and the last but not the least – how to use such predictions properly?
Suppose you found a proposal for sending you free trading signals. Today such proposals are quite easy to find because they are sent by many brokers, financial advisors, and many private traders.
As a rule, such proposals are sent with the expectation that you will subscribe to premium trading signals when you estimate their usefulness. However, you shouldn’t do it immediately, but only when you are sure in the utility of free signals. How to do it then?
First, make sure that the signals are coming with the desired frequency and calculated for those time scales which you are working on. For example, if you work for hours, then you scarcely need those signals which predict a rise or fall in prices through the day. On the contrary, you are likely to be interested in such signals, which indicate volatility of stock in half an hour, two hours or three hours.
In other words, the trade signals to which you subscribe should reflect the style of trading, which is typical for you. Only in this case, you can count on the fact that you get the benefit of your signals and be able to put them into the foundation of a truly successful binary option trading.
Secondly, any trading signals require inspection. This inspection is best to be carried out on a demo account, then you will not lose real money and at the same time will be able to understand whether there are recommendations to trust them. It is best to put the same amount on the demo account that you would put on a real deposit, when you start trading for real. This will give you the opportunity not only to check the signals, but also to build your own trading system with the following parameters to manage your deposits, which you will develop on your own.
Third, be sure to decide on what underlying asset you will be receiving trading signals. As a rule, you will be able to select it. However, trying to trade all assets at once is not necessary, because in most cases it is distracting and leads to undesirable consequences. So it is better to choose, for example, only the euro, the Swiss franc or gold, and to test the signals that come just for this asset.
During testing, you will probably soon understand whether to rely on the recommendations that come to you, or not. It’s very simply calculated by the ratio of the total number of transactions that you perform, and those transactions that have proved to be successful and brought you a prize. With precise adherence to all the instructions and recommendations contained in the forecasts sent to you, you have to win at least 3 of the 5 transactions.
In addition, you need to test the stability of the system. Even if you won five trades in a row, it is advisable to look at the trend dynamics in the future. That is, whether your system will work in a few days just as well as today and yesterday, or not. Only in case that in the long term trading the trading signals are fully justified, you can really move to a real account and start earning real money on binary options.
That’s all for now. Got any questions? Just ask the expert!