Back to Basics: How to select the right trading asset?

Binary options trading assetsA lot of beginners in the world of binary trading wonder where they should start. This is a good question, and unfortunately, there’s no easy answer. Still, some assets are better in this marketplace than others. There are a few general rules that you need to follow if you’re going to try trading here for the first time. Let’s go over a few general rules, and then show which assets fit into these guidelines.

Binary options basic rules

Rule #1.) Trade what you know.

If you have previous trading experience, you can use it in binaries! Many currency traders come over to binary options because of the lower cost of operating, but not all of these traders put to use the knowledge they have already established because of the allure of having so many assets available in one broker. If you traded the EUR/USD pair in the Forex market with success, you can trade it as a binary option with even more. Take what you know, and expand upon it.

Rule #2.) Trade what’s popular.

Many brokers list their most popular assets for you to see what other traders are doing. If others are trading it, there’s probably a good reason. There is likely to be something going on with it, a lot of information available on it, and momentum on its side. These are all positive features that–if used right–can increase your chances of making a profit. Use them to your advantage.

Rule #3.) Trade what’s moving quickly.

This is a tougher one to determine, but perhaps the most profitable rule. If an asset is moving quickly in a certain direction, this trend is likely to continue for a bit longer. Short term options, like the 60 second binary option, can turn you a very quick profit in these instances. You can often subscribe to a news feed that will keep track of this information for you for ease.

Trading the right assets

Now, let’s look at five assets that fit all three of these categories.

1. The EUR/USD pair is hands down the most popular asset traded within the world of binary options, and for good reason. These are the two most popular currencies in the Forex world, and there is a plethora of information out there concerning them individually and together. You will never find more information on an asset than you can on this one. The only downside to trading EUR/USD is that sometimes it does not move as fast as lower volume currency pairs.

Still, during periods of intense trading, these currencies move quickly and can easily make you a lot of money.
Oil is the most popularly traded commodity on Earth. It’s not uncommon to see the price change by more than 2 percent on a relatively calm day. There’s also tons of information on this commodity, and it is always in the news because of its widespread use for transportation. The hard part about trading oil options is knowing which bits of information are important and which are not. This info can be judged better once you get some experience monitoring the markets under your belt.

facebook trading

2. Facebook is a newcomer in the stock market, and the reasons for trading this stock can be applied to almost any new major stock. It receives a lot of attention because it’s new and popular, and this means lots of media attention and analyst scrutiny. It also means that it is prone to price swings. When used correctly, price swings can be beneficial to you regardless of which direction they go. Remember, it’s just as easy to trade a call option as it is a put option.

3. Google is a popularly traded company and it is currently at a huge price number per share at well over $1,100. This means media and expert attention, plus it also means that big moves happen with more frequency. Not percentage-wise, but in dollar amount. A $10 shift per day is very likely, but it doesn’t affect Google nearly as much as a smaller penny stock company would be affected. This means that movement is almost inevitable, and if you can harness this, you can use it for a profit almost every day.

4. The is the biggest stock exchange in China and the 6th largest exchange in the world gives us great reason to be excited for 2014. China’s economy is booming right now, and it is seeing more action than ever before–this ultimately means popularity, information, and big price movements. All of these things mean big profits for traders, especially binary options traders. A lot of brokers offer international indices, and this is one of the more popular ones. You can also find it listed as the Shanghai Composite.

The important thing is that you have an intimate knowledge of the asset you are trading. This is more important than whether or not that asset appears on this list. You should know how to read charts and be able to figure out how to act when prices have stalled out at a support or resistance line. Advanced methods of analysis will help a lot too. You should be able to be able to look at something like a MACD indicator and know what the reading means for that particular asset.

There are literally hundreds of different things you can look at in your analysis, but these can differ between assets, so knowledge will be your best course of action. Each asset acts slightly differently, so the more you know about one or two specific assets, the better your trading will be. and other reliable resources on the Internet have been trying to bring a confident outlook to trading binaries. Keep an eye out for some other great features in the future.

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