Binary option trading has a lot to do with prediction. Prediction can either be by guesswork, or by informed choice. When it comes to making predictions based on guesswork as it concerns monetary decisions, the only word that can be used to correctly describe such behavior is gambling. Gambling belongs strictly to the gamers in the casinos of Las Vegas and has no place in binary options trading. Any attempt by the trader to bring the gambling mentality into binary options trading will only have disastrous consequences for the trader.
This is where binary options tools come in. Tools bring information and informed predictions in binary options will lead to greater success. The job of binary options tools is simple: help the trader to get a better idea of what is happening and what is about to happen in the market.
So what are these binary options tools that every binary options trader must have? Some of the very specific tools which the trader will find useful are listed as follows:
- Line Tool
- News bar
- Automated trading robots
Charts are the visual depiction of the price action and trading activity for any traded asset. It is only from the charts that a trader can deduce what is going on in the market, and use that as a predictive guide for what is going to happen. After all, the whole point of binary options trading is to predict correctly the outcome of the trade for a payout. With only two options available, you have a 50% chance of success or failure.
Charts display price action. Charts enable traders to discover price patterns. You also need charts to use technical indicators. Yet, 90% of binary options platforms do not provide interactive charts for traders to work with. If you must succeed in this market, please either subscribe to an interactive charting service, or download a demo version of any of the financial trading platforms from brokers that provide them. The charts must be interactive; they must allow traders do a number of things with them in the process of analyzing them for trading opportunities.
Which would you rather use this ?
Support and resistance trading is one of the popular methods of trading. It is simple and yet effective. To be able to detect support and resistance areas and demarcate them clearly, we must use line tools. The line tool enables a trader to draw trend lines. A trend line is a straight line drawn across at least three price lows (support) or at least three price highs (resistance). By showing these areas of support and resistance, a trader can effectively determine when to trade a Call/Put option and when a trade should be set to expire.
Why is a news bar important to binary options traders? Well, the news moves the market, and anything that gives direction to an asset has to be a binary option trader’s friend. What the news does is that it shapes the mindset of market participants and causes them to flow in a direction. Based on the news, traders will either buy or sell a currency, commodity or stock. You need to know when traders are going to be prompted to buy en masse or sell en masse. With this information, you can then set your binary options trade and allow it to deliver on your set target. You can get the news from premium news services or from the News tab on the conventional trading platforms. Forex.com has a very good news service that provides news about currencies, commodities, stocks and indices.
Automated Trading Robots
Believe it or not, expert advisors can be used to trade the binary options markets. This is because the same assets you see in the forex or commodity markets are the same assets you will see in the binary options market. Automated binary options robots are taking the binary options market by storm. The good thing is that if you have a good strategy, you can even get a good programmer to transform your strategy idea into a fully functional binary options robot which can trade the market in an automated or manual fashion.
Pivot Point Calculator
Pivot points are powerful tools in the binary options market. This is because they are well respected areas of support and resistance and when used on an hourly chart, a binary options trader can make a killing by simply trading call and put options off the pivot point areas. The issue is that pivot points have to be recalculated every new trading day, and this is something traders will consider a not-very-pleasant exercise in drudgery.
This is where the pivot point calculator comes to the rescue. The pivot point calculator automatically does this calculation and applies the daily pivot points to the chart. The best chart to use with this tool is the hourly chart. So traders can actually setup trades several times in a day using this tool. The pivot point calculator comes in various forms and so many versions of this tool are freely available on the internet. Again, you also have the choice of getting your own customized version, but this is not really necessary.
With these tools for trading binary options, it is possible to radically change the outlook of a binary options trading career. Traders are encouraged to try as much as they can to get hold of these tools and use them whenever they can as they will definitely cause a positive change to their trading results.
Related : Best Binary Options Trading Brokers