One thing binary options brokers don’t give you to work with is good charting software. To be fair, even brokers in more established markets like Forex usually don’t do very well with this. The main reason for this is probably that it’s unnecessary since most traders who are serious about their business are going to download a separate software package to help them plan their trades with advanced tools. That little graph you see next to binary options on your platform isn’t adequate for planning trades. It can only really remind you visually of what’s going on at the moment. There are a few binary options brokers who do offer more advanced charting capabilities, even including some indicators, but they’re still very minimal.
We highly recommend you download some professional, free charting software like MetaTrader 4 to use in conjunction with your binary options trading. MT4 is aimed at Forex traders, so it won’t be very handy for planning trades with other types of assets, but it’s perfect if you plan to focus on currencies. You can find other similar programs to help you plan your trades with other assets.
What Are The Benefits Of A Program Like This For A Serious Trader?
- Firstly, you can see a detailed chart which you can zoom in and out of (both visually and in terms of timeframes). You can plot the chart in whichever way it is easiest for you to read clearly so that you can see at a glance what’s going on. You can then place all kinds of indicators on your charts—as many or few as you need. This is a perfect way to try out different trading methods. Once you find one that you like, you can start backtesting.
What the heck is backtesting? Binary options trading resources being so sparse, we wouldn’t be surprised if this is the first time anyone has urged you to do this. Backtesting means opening your charting software and scrolling back in time and then testing whatever trading method you’ve discovered or developed on historical data. Step your charts forward one bar at a time, planning and “executing” trades as you would in real time, and then record the results. Only once you’ve done this and achieved reliable, excellent results, should you consider trading live with binary options.
Note: that one thing which makes backtesting difficult and somewhat unreliable for binary options trading is that expiry times for different options vary a great deal, and there’s no way for you to see all those historic expiry times which you’d have been offered on past options. You may want to run a number of tests to see what would have happened in different situations.
Even if you get this far, you should probably demo test if you can find a broker that lets you. One which we recommend is Banc De Binary. This means doing some testing in real time using current data to see what would happen if you try to apply your method in real life. If you choose a broker which doesn’t offer this, you can still do it in your mind as a thought experiment and record the results. But that might be challenging if you struggle to stay honest since you have to be 100% honest with yourself about your losses.
When you do get around to trading in real life with your real money (or demo testing), you’ll need to plan your trades before you execute them. It’s pretty tough to do that looking at that little chart you get on your binary options platform, even if you’re using price action and don’t need to plot anything. So using charting software allows you to plot your indicators and get a clear picture of events before you put your money on the line. It also makes your trading consistent with your testing. Use the same charting software to plan your real life, real time trades as you did to conduct your tests and you’ll eliminate some of the weird little inconsistencies which can happen when you switch to a different chart. All feeds are a little different, so it can actually cost you trades if you don’t do this.
There is good, free charting software available, and it only takes minutes to install and learn how to use. Don’t force yourself to rely on chance any more than you have to in order to become a profitable trader. Charting software empowers you to make more consistent trades with better planning behind them, and that may make all the difference between whether you become a profitable trader or not.