Stern is proud of its rich heritage as one of the top binary options trading platforms and their traders have a history of success when trading in binary options on the platform. Stern believes that the high success rates achieved by its traders has everything to do with a holistic approach to both its trading methods and the binary trading industry in general.
Sterns’ online trading platform is based on a business model which emphasizes clear and simple trading methods; consequently, this state of the art trading platform is simple and easy to understand. The question that most potential traders almost always ask is: “How do I trade in binary options? What steps do I follow?”.
Don’t hesitate to visit our Stern Trading Academy page, for more information on the education provided to traders.
Here is the answer:
Binary options trading is the simplest financial trading instrument available to trade on the global FOREX and stock markets. They can be traded on a large variety of underlying assets, such as indices, currencies, stocks, and commodities. You do not buy or sell the underlying asset, or stock, that you choose to trade on. You have to decide whether you think the price of an underlying asset will rise or fall within a certain time frame. At the outset, it seems as though this is essentially nothing more than guesswork; however, you need to do a lot of background research on the underlying asset before you place a trade. You can always reach out to your Account Manager or the support team for assistance.
Once you have completed your research, you are ready to trade on the asset. Essentially, you have one of two options to choose from:
- Put – If you think that the price of the underlying asset will drop during the specified time frame, then you choose the “Put” option
- Call – You choose the “Call” option if you think that the price of the underlying asset will increase during the specified time frame.
Binary Options Trading Methods
There are several binary options trading methods / strategies that you can employ when trading on Stern online trading platform:
- Tunnel Strategy
This strategy was developed for binary options traders who want to achieve higher returns. In a nutshell, tunnel trades are binary trades where traders need to decide if the price of an underlying asset will stay within, or move out of, a defined price range.
The trading strategy is suitable for stock markets that are in a state of consolidation. Essentially, the market is not sure which direction asset prices will move.
- Trend Signal Strategy
Traders who use this strategy try and isolate and extract profits from following global market trends. They are looking for a shift in the current trend to a previous trend. There are several ways to profit from stock trading by following market trends, including:
- Moving averages
This is where the price is smoothed to create a single flowing line. This line represents the average price over a period of time.
- Moving Average Convergence Divergence
This is an indicator which fluctuates above and below zero on a graph. In order to follow this strategy, a trader needs to look at which side of zero the lines are. If the lines are above zero for a reasonable period of time, then the trend is up so the price is increasing. On the other hand, if the lines are below zero for a reasonable period of time, then the trend is down so the price is decreasing.
- Zigzag Strategy
The zigzag strategy keeps track of any directional changes in price movements. It is important to note that the goal is to focus on the important trends and filter out the noise on the trend lines. Even though experts recommend that this strategy should never be used on its own, it is a good way to highlight important patterns and confirm trend reversals.
In a nutshell, this strategy is used to remove the noise from the trend lines. Traders remove any price changes below a specific threshold from the lines on the trends graph.
These are just a few of the many strategies available for binary options traders to digest and use as part of their binary options trading arsenal. In addition, you can always read client stories and reviews for more insight on trading binary options with Stern.