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The bias is indeed obvious: most binary option traders only incorporate fundamentals into their trading to the extent of simply staying away from the action when economic news are due to be released. Those trading indices, Forex, commodities or stocks have long resorted to news trading to secure an edge and indeed, there are traders out there who have turned this approach into a sort of art-form. Binary option traders can adopt similar strategies too and they too can be successful at news trading.
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Let us take them one after the other. Expiry times can be as low as 5 minutes. How does it work? First, the trader sets two price targets to form a price range.
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The Bottom Line Binary options are financial options that come with one of two payoff options: a fixed amount or nothing at all. That's why they're called binary options—because there is no other settlement possible. The premise behind a binary option is a simple yes or no proposition: Will an underlying asset be above a certain price at a certain time?
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The Cup and Handle Pattern Placing Your First Bet As with any business trading venture, the first step is always figuring out what are the current trends, current markets, recent developments, stock charts etc. The right type of investor will always know what is happening in the world around him; and his vigilance will pay for itself tenfold. Having at least the slightest understanding of the principles that drive the asset class that is to be the future basis for the investment.
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Learning how to use it effectively for your own purposes is going to be a helpful short term trading strategy, and for beginner binary options tradersit is often one of the best places to start, depending upon your background. Regardless, knowing how to use it right will only help you to find more money making opportunities.
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