Australia’s Binary Options – How to Trade the Market Down Under
Binary options has become increasingly popular in the global trading community. It has also significantly expanded the trading frontier, with hundreds of assets you can choose from including stocks, indices, commodities, and currencies. Australians are paying specific interest to binary options because it provides a myriad of benefits over other types of trading. But before you get excited and start computing potential payouts while writing your resignation letter at your current job, below are five tips on how to trade the market.
Trading binary options involve a lot of bureaucracy and red tape. Understanding Australia’s specific laws concerning trading in the financial markets is important to avoiding trouble later on. Basically, it is legal to buy and sell options contracts in Australian soil through a broker like TorOption. But as the market becomes a staple in many domestic investment portfolios, the Australian government has expressed prioritization over the industry by establishing and continuously adding well-defined operation guidelines and parameters to institute safe and fair trading for its growing trader base. For this very reason, the Australian Securities and Investments Commission was created. The regulatory body is responsible for oversight of binary options transactions. The ASIC operates to acquire the latest and most accurate information on safe trading practices and any pertinent reports regarding shady brokers and scams.
Get a Broker
Not just any broker, but a good, reputable one like TorOption. Brokers serve as the middlemen for buying and selling financial assets which in this case are binary options contracts. Look for a broker with enough positive customer reviews online. They must also be financially solvent to protect your capital from possible management collapse and ensuing bankruptcy, which locks down your capital. Australia-based brokerage firms are compared in great detail through third-party site reviews. You’ll save a lot of time and effort by using these materials rather than conducting a search by yourself.
Use Statistical Parameters
Gauge your trades through risk-reward ratios, number of winning trades per day/week/month, and so on. Statistical parameters help unravel problems in your trading strategies and regimen. It allows you to create a data-driven approach that makes use of numbers and logic rather than emotions and gut feeling. Look at how many trades you are doing per X amount of time. Should you dial down or increase it to get a better bottomline at the end of that time period? Is it possible you are overtrading or over-leveraged?
Whether it be by hedging or establishing a daily trading routine, minimize the risk as much as you can. Widening the gap between risk and reward can be difficult when trading binary options since both risk and reward are already predefined and the gap between the two are usually very small, such as a 1:1.5 payout. Still, it is possible to minimize risk by trading less, trading long-term contracts rather than intraday contracts, creating a pre- and post-routine that rebalances your positions and allows you to mentally recover, etc.
Treat it Like Business
Few people actually understand what to make of a trading career. Majority of traders treat it either like a hobby or a gambling institution. This explains why more than 90 percent of traders fail to make any money before the markets dry up their accounts. Treat binary options trading like your very own Australia-based business. This means planning and preparing extensively before making any moves, continuously monitoring and overseeing operations, and pouring all resources into it.
Trading binary options in Australia is a good way to supplement your primary job or even supplant it when the time comes. Be patient with your positions and use the five tips above to understand the markets and yourself.