Many traders are looking for risk-free strategies for binary options trading. With this trick, you can create your own. When you understand the math behind binary options trading, you are already half way to your goal. And don’t worry, the math is easy.
In this article, Risk-free strategies for binary options trading, you will learn:
- How to create a risk-free strategy for binary options trading,
- How to understand the inner workings of binary options trading,
With this knowledge, you will immediately be able to trade more successfully and risk-free.
Risk-free strategies for binary options trading: The guide
To some, the prospect of risk-free binary options trading might seem unrealistic. After all, all financial investments involve some type of risk, and, to a newcomer, it might seem impossible to eliminate this risk.
This view is, however, a misconception that results from a wrong focus. Most newcomers assume that the goal of risk-free trading is to win every single trade and to be able to guarantee that a specific trade will be a winner. This goal is indeed impossible, but, luckily, it is not the goal you need to achieve to trade risk-free.
To trade risk-free, all you need to know is that you will have made money by the end of the month. If you can guarantee that you will make money over a certain period of time, you have found a risk-free strategy for binary options trading.
To understand this goal, think of a coin flip. In a normal coin flip, your odds of winning are 50 percent and your payout is 100 percent, which will result in a return of 2 times your original investment (100 percent of your original investment + 100 percent payout = 2 times your original investment).
By multiplying both values, we get: 2 x 50 percent = 100 percent. This value means that, after trading this strategy for a longer period of time, you will have 100 percent of your original account balance.
If we could increase either value of the equation, you would start making money. If we would use a fake coin, for example, you might win 70 percent of all coin flips, which would result in a winning expectancy of 140 percent – you would have created a risk-free strategy.
How to adapt this knowledge to binary options
We can adapt this knowledge to binary options. If you trade a strategy with an average payout of 70 percent and win 65 percent of your trades, for example, your winning expectancy would be 110.5 percent – you would make money by trading this strategy.
Unfortunately, there is no single strategy that can create a positive winning expectancy for all traders. Much like there is no perfect partner for everyone, our characters and mental abilities are too different to allow for a one-size-fits-all approach to binary options trading.
The only way for you to find your personal risk-free strategy is through trial and error. Luckily, a binary options demo account allows you to go through this trial and error phase with play money instead of real money, which will probably save you hundreds of Dollars, at least.
We recommend you start your quest for the right strategy with play money, and once you have found it, you can switch to real-money trading and turn a profit from the start.
To help you find the best demo, we have tested all available demos for you and listed the best of them in our top list. All of the demos on our list are 100 percent free and trustworthy, which is why you can confidently pick any broker from the list.