Once you’ve mastered the basics, it’s time to learn some binary options intermediate strategies. These are rules and recommendations that go beyond choosing the type of option to invest on and diversifying the portfolio. In fact, once you’ve “graduated” from the beginning stage, it’s time to learn where the money truly is and how to make the most of each trade so you can improve your long-term profits.
Learn How the Risk Reversal Strategy Can Help You
Risk reversal is a strategy used by intermediate-level traders to reduce their loss risk when buying/selling a specific type of option.
Risk reversal works better with options that recently experience a quick drop or rise. What you do is look at what the trend is and try to predict what would happen next. Chances are that if the asset has been experiencing a steady drop recently, it might continue to do so. If you act quickly, you might be able to pick the right option and profit from it.
Try the Double Up Strategy
The double-up strategy offers you a chance to increase your earnings by buying another option of the same asset that’s about to expire. This works, of course, if you see an asset trading in your favor (up or down) and you can more or less predict it will continue to do so until the time of closing.
In that case, you go ahead and buy additional options – preferably ones that have the exact same regulations and expiration date as your original ones – in hopes of earning more money.
Use the Knock-On Effect Strategy
Also known as “market pull,” this strategy requires a knowledge of how the assets connect and interact with each other. That’s how the knock-on effect comes into play: by observing the behavior of one asset, you can more or less predict how other assets will behave and can act accordingly to increase your profits.
A clear example: gold-related assets tend to go down when the US dollar is strong and trending up, so that gives you an edge and an idea of what to do when investing.
Binary options intermediate strategies require a bit more planning and dedication that goes beyond the basic investment techniques. If you’re at a point where long-term investments and profits are more important than making a quick return, this might be the way to go.
Keep in mind that you don’t need to try all these strategies at once. In fact, it’s probably better if you don’t. Instead, pick one specific strategy you feel more comfortable with and practice using that on some of your investments. Once you’ve mastered an intermediate strategy, move on to the next. The key to making money at the intermediate level is being willing to try new things but doing so smartly.