Binary Options Platform – Addressing Your Questions

Vinz de la Fuente - Contributor - Binary Options

If you want to immediately derive profit from your investment in the stock market as opposed to waiting for quite some time (as in the case of traditional stocks), then binary stock options are a great option.

A binary options platform is an important venue in a trader’s life as he will be able to utilize it to make more money for himself and for his clients. This tool presupposes the use of technological advances but is not so vague that it cannot be learned. A bit of dedicated hard work and patient perseverance to master the basic learning required is the perfect jump off to what is needed in the practical world of trading. Add into the mix a hunger for more knowledge and the results will pave the way for greater profit --- a trader’s dream realized.

Let’s start by getting to know the technology one will encounter daily – a binary options platform.
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Do You or Have You Ever Traded Binary Options?

Trading binary options has been growing in popularity since 2008. Binary options are considered to be one of simplest trading products available to traders, since the trader knows their exact risk/reward when entering the trade and they can essentially place trades with little-to-no knowledge of the stock market.

We wanted to take a quick poll to see how many of our readers trade binary options, so....

Do you trade binary options and if so, did you make money?

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Please take a moment to place your vote and leave a comment on the subject if you like.

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Trading Psychology – Do's and Don'ts

Trading Psychology

Investing in the capital markets is a business that requires a strategy and risk management that will consistently generate returns.  To achieve success as an investor, individuals need to develop a trading style that is in line with their personality and level of risk tolerance.  Once an investor designs a style and strategy it is imperative that they endeavor to stick to that style.

Veering off course can be hazardous to the health of any business plan, and can generate a negative spiral that eventually puts the business in a situation where losses can ruin the business.  Developing an investment style requires some analysis of your business personality, along with your risk tolerance.  This process takes time, but can be made easier by using Binary Options as an investment vehicle as it mitigates some of the issues related to generating a successful trading plan. Continue reading "Trading Psychology – Do's and Don'ts"

Applying Portfolio Efficiency, Ratio Segmentation and Management to Trading

Portfolio Efficiency

The returns an investor receives can be measured in many ways, using a number of techniques that describe the efficiency of a portfolio.  Generating profitable returns is one aspect that is key to success, but the costs associated with generating those returns is an aspect of market analysis that sometime goes unnoticed.  For many investors, risk adjusted returns are extremely important as excessive volatility in a portfolio can be considered problematic, which might mitigate the attractiveness of the portfolio.

In addition to strong risk management techniques, which for many traders are the use of Binary Options which have a predetermined risk reward ratio, traders need to consider the extent of the volatility associated with a specific strategy which can be evaluated by using a number of statistical metric which can help determine robustness of the risk-adjusted returns.  Some of the more well-known statistical ratios are; the Sharpe Ratio, and the Information-ratio.  Each of these ratios supplies an investor with a benchmark to judge the risk-adjusted returns of their portfolio. Continue reading "Applying Portfolio Efficiency, Ratio Segmentation and Management to Trading"

Trading Using Monetary Policy Analysis

Monetary policy, which is also known as interest rate policy, describes the actions or in-actions of a country’s central banks.  Interest rate policy generally focuses on maximizing price stability and growth.  The central bank of a country is considered the institution that controls a countries currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries.

Each central bank has guidelines that are mandated by their legislature.  For example, in the US, the central bank has a dual mandate which is to maximize price stability and employment.  Other central banks, such as the European Central bank, have only one mandate which is price stability.

Central banks often spur growth and employment by reducing interest rates, making it easing for banks to lend money at reduced rates.  Lower interest rates also increase liquidity, and make purchasing riskier assets a more attractive alternative than holding low interest baring government notes. Continue reading "Trading Using Monetary Policy Analysis"