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Backing it Up With Binary Options

Right now, the U.S. stock market is being torn by two different types of sentiment. One group of people believes that the market needs a breather and that a correction is right around the corner. The other group believes that there are stocks that will keep going up at the ultra fast pace that we’ve seen over the last couple years. There just might be enough of these people trading to help boost prices artificially for some time still. If you are able to pinpoint where these opportunities are, you can use that information to your advantage and increase your profit rate a little bit more. This type of trading approach requires a lot of research, but it will uncover areas of opportunity that not many others are cashing in on.

First, be warned that a lot of the stocks that have the biggest upside potential also have the highest amount of risk. They typically take the form of cheaper stocks; those priced at under $5 per share. Depending upon how you trade these, there may not be much of a reason for you to venture here. Some stocks have restrictions on how you may trade them. For example, it’s currently not legal to sell short penny stocks. This immediately removes half of your choices when it comes to making money. In other words, the trader that is going to be successful consistently in any market is limiting themselves if they take this approach.

Trading the DirectionInstead, you need to focus on bigger stocks. Again, you will find yourself limited, though. In order to make a profit day trading, you need to be able to front tens of thousands of dollars at a time in order to overcome any sort of variance that might occur. It is not something that the average person can do, or even wants to do. And, it is something that limits your profitability.

This is why binary options have caught on so quickly. They allow you to day trade, but with small amounts of money. They do limit your available stocks to just the biggest companies, but most traders would already be in this situation for reasons listed above. You can use all of the same evaluation strategies, but a lot of the technicalities that need to be overcome in the stock market are simplified here. It’s certainly not the same because of the trading platforms, but it’s a great starting point for smaller traders. As the industry grows, many pros are finding that they prefer binaries, even. Binaries are improving a lot, and traders are finding that they are more profitable than ever before.

The beauty of all of this is the fact that although the six year old bull market is gaining more doubters every day, there’s no need to let this hurt your trading potential because of self imposed limitations on what you can and cannot do. If you take a position on a stock, and the markets begin to drop, there may be limitations placed on selling short on a more comprehensive level, such as what happened after the 2008 financial bubble. Then, selling short was completely banned for a few months. If this were to happen in the stock market today, many traders, including hedge fund managers, would be in a rough spot. Binary options present you with an opportunity to keep these alternatives open and gives you room to make money on your own terms as they are independent of the stock market regulations for the most part. At the very least, having this as part of a backup plan opens doors that were not there before.

Risk Disclaimer