115 in binary trading strategy for beginners41 comments
Digital options trading platform free binary code
I congratulate all of you being the member of the smart finance family. After extensive research on various market conditions using different simulation techniques we have derived and devised the strategies. But many case I have experienced that traders find it difficult to follow those strategies in the way it has come, I do appreciate this type of thoughts but in this note I am going to describe you few hidden gems of the strategy. Why is it formed?
How one should follow this strategy? Before entering to various questions and answers on strategy I want to specify few important things on risk assessment. That is before entering the trade you must and must know that how much money you are going to put in risk by entering into that particular trade and in the worst case how much you are going to lose.
In this case trader is exposed to high degree of loss. Benefits of this open trade a. In a unidirectional rising market or falling market this open trade used to yield more profit. This is technical based so probability of success is ascertained in quite market where the external and global factors have least presence in the market.
Draw backs of open trade a. This is not professionally risk managed c. Any sudden sentimental, directional change in the market results a huge loss.
So my conclusion is protect your capital like a mother protects her child. Take my words in white paper the day you will learn to protect your money from loss from that day your money will grow. This is a common fact money taken in debt will never yield you the maximum return because of high interest cost and low security.
Enter to the trade if you have sufficient money. Now come to the discussion of strategy: This type of strategy is formed on the basis of delta neutral theory.
As compared to its draw backs its benefits are well appreciated. While following this strategy one should follow a calm approach. While booking profit; Sell one lot of your profit component then buy the loss component and sell the remaining lot of your profit component. A- In the context of this strategy we take the position based on the time value and delta neutral theory.
FAQ-What is the significance of selling a call option and buying a future covered call strategy or selling a put option and a selling a future covered put strategy? The covered call or put strategy says have the stock in hand and sell the call. Same as the covered put. While implementing it in future the trader keep it in mind that he will take the benefits of time value in the option. When the option will become very much in the money its time value will reduce.
This reduction in time value will be the profit for the trader and increase in the intrinsic value will be offset by the increase in the future value. Best time of initiating this strategy is the beginning of the settlement month. But very good for short term trade. FAQ-Is there any market specific strategy? A- The strategy is always market specific.
Before the strategy gets initiated the technical elasticity of the underlying is thoroughly analysed. If the option price follows the technical trend then it is use full for the trader or else not. But it is not wise to say these strategies are the fine print for this market. Since market is dynamic in nature so as the strategy.
FAQ-What one must and must follow while initiating your strategic recommendation? A -The first parameter is the loss risk one must see in a strategy.
Second is holding period of the strategy. Third one should know how to enter a call and exit it. No need to be hurry if you miss the chance in one counter you will get few more in the same day. Always follow the recommended price. FAQ- what is open interest and how is it significant? If the underlying stock price rise with the rise in the open interest then it is an indication of a bullish signal provided the stock should be in premium with respect to the spot.
If the open interest decrease with fall in price and stock is in discount then it is a bearish signal.
If this rule violates then be cautious market may take an U turn any moment. FAQ- what is put call ratio and how is it significant? Put call ratio is the net put open interest divided by the net call open interest. The rise in put call ratio indicates a put built up which is a bearish signal provided the market should continue falling trend if not then rise in put call ratio may be a speculative phenomenon. It does not confirm the bearish trend.
Fall in the put call ratio with rise in the underlying script price is considered as a bullish trend. If you have any further queries feel free to mail us.