Binary Options Guest Post by Michael Hodges
I began today’s project by searching for a real binary options strategy that I could give my seal of approval to. After searching and searching I was rewarded with nothing more than what I usually find. A lot of BS. There are a lot of bogus web sites out there with claims of winning strategies, winning systems, winning software and blah blah blah but none of them really come through with anything really useful. In fact, from what I can find about 98% of the web sites out there want you to either buy their system out right or make a deposit with one of their “recommended” brokers. This is not to say that none of them are on the up and up, just that none of them provide any reason to believe in their product other than their own ridiculous marketing material. I don’t know about you but there is a certain class of online marketing page that I can recognize instantly by its layout and text. In the end I decided that maybe it was time to out line some of the things I like to look for in a binary options strategy, service or system.
The very first thing I look for, and probably the most overlooked item by binary service providers, is who is behind it? You would be surprised by how many people try to sell you something without even telling you who they are, and most of them don’t provide any more contact info than an admin email address. I will never trust an undocumented source, especially with my money. You aren’t going to deposit your funds into an account with any old random broker are you? Why would you want to give money to some old web site you found on the internet that promises you riches? You wouldn’t. The thing that is most surprising is just how easy it is to provide a little information, it is the internet after all. They can list mailing addresses, create pages that detail who started the company, what their background is, the goals of the website and many, many other methods such as Google+ and Facebook pages.
The next thing is what are the indicators used? There must be something even it is only gut instinct. I have begun to notice that a lot of the on line strategies and services are making claims that they don’t rely on “useless” indicators like MACD, Stochastic and RSI. I think this is ludicrous! What are they relying on. Binary trading is all about technical analysis so there must be something and I know you can’t trade 60 seconds on fundamentals. There is no way to make an informed decision about the strategy without some details into how it works. I’m not asking anyone to give up their secrets, I just need more than vague comments and empty promises.
An indicator, or group of indicators, are not a strategy, even with entry and exit rules. It takes time and experience to turn indicators and rules into a properly functioning system. I like to see a lot of information on how the tools work and how they work together. I always look to see what kind of support is available. The very best strategies will include information, and better yet, on going support, to help the newly initiated turn the rules into a winning system. Forums are great, you usually have to join in order to participate, and a paid service will usually come with additional support such as Skype sessions, phone and other forms of support. Forums are also great places to find other strategies and systems.
Time frame is an important factor when considering any strategy, system or service, paid or otherwise. First, you have to consider if the time frame is right for your risk tolerance. Short term trading isn’t for everyone. The risk of quick losses are a big deterrent for some traders. At the same time you have to consider the probability of the strategies success. Take 60 Second binary options. For some reason they are highly popular trading vehicles even though they are well known to be the riskiest form of binary. Not only is there the difference in rates between the actual market level and what the broker is selling the option for you also have to consider if you can act on the signal quick enough. Just how long does it take for the signal to fire, for you to recognize it and then enter the trade?
Along the way, as I am reviewing whichever strategy or service is on the list for today, I also keep track of how they are making money. Some are free, these are the ones I like best, but in the end all strategy and service website are out to make money. Some do it innocently with ad placements and affiliations. Others sell proprietary software, signals or other support services. The worst though are those who are using shady marketing tactics, hollow claims and false advertising to lure you into an affiliate scheme. It is one thing to offer a strategy and say “hey! I like this broker here, if you like them too then join through me”, everybody needs to earn a living. It is something else entirely to lead a trader deep into a website only to require him/her to sign up and fund an account before getting the goods.
So what should you look for when searching for a strategy, system or service? First look for a trusted source, not just some web site on the internet. You need to know who and what it is you are investing your time and money in. Next, look for some real tools, not just some so-called “proprietary” mumbo-jumbo. You need to see detailed information about how and why the system works. After that how are these tools being used in a strategy? Are they taking every signal or are there filters? Blindly following an indicator is a sure way to failure, most of them will provide bull and bear signals at random, it takes a sense of the market and experience to weed out the bad ones. Additionally, time frame is an important factor as well. I have to be honest, I pretty much think that any 60 Second strategy is crap, you just cant trust the time frame because it too fast. After that it comes down to the money. What do I have to do to to get the info? Anyone who forces me to fund an account is automatically out, after that it just depends on what they are offering and how much I know about it.