Binary Options Strategy: Examining Trader’s Choice in 24Option
What is Trader’s Choice?
When you read the chart on the 24option trading platform, you may notice that there is a stacked percentage column named Trader’s Choice on the right side of the panel. It is a percentage value that shows the current trading trends and it changes constantly. By reading the Trader’s Choice, one can predict how many traders are choosing “High” and how many of them are choosing “Low”.
As price increases and decreases, there are times when the two percentage values in the Trader’s Choice graph show large differences and most traders would lean toward one side. By using Trader’s Choice, you can observe what other traders are doing. Since it can be taken as a trading strategy, here, we would like to draw your attention to this feature when you place trades on the 24option platform.
Take this figure as an example. It shows that 61% of the traders are choosing “High” and 39% of the traders are choosing “Low”. It indicates that around 60% of the traders are predicting that the price will go up at the time of expiry.
Learning how to read Trader’s Choice and understanding the features of foreign exchange can help traders trade binary options. It is thus recommended that traders, especially beginners, learn and use Trader’s Choice and take it as a trading strategy.
Understand the Features of Foreign Exchange
Why do foreign exchange rates change?
There are a lot of factors that can affect foreign exchange rates. Basically, changes in the exchange rates are driven by the supply and demand for a country’s currency. It thus can be said that exchange rates are influenced by people.
While there are several characteristics of exchange rate movements, a distinguishing characteristic is that, exchange rate tends to rise if most people predicted that a raise in exchange rate would occur, and exchange rate tends to fall if most people predicted that a decrease in exchange rate would occur.
Let’s take a look at the Trader’s Choice in the above figure. Since it shows that about 60% of the traders have chosen “High”, it is easy to understand that it will show a tendency to rise. If a trader can make a judgment based on the graph, predict that the rate will rise, and choose “High”, there is a great chance that he will win.
Please note that, it does not necessarily mean that the rate will always move in the same direction as what Trader’s Choice shows. It is not an all-purpose tool. However, it can be taken as a reference material for analyzing the market movements.
Do Not Trade When it is Difficult to Predict Market Trends
Next, it is very important for novice traders to pay attention to the essential points when they use Trader’s Choice to make analyses and place trades. Even though one can trade binary options 24 hours a day, it is important to know when to trade and when not to. Especially, one should not trade binary options when it is difficult to predict market directions and there is a high level of risk.
As the above figure shows, it is difficult to predict the market trend by just looking at the Trader’s Choice. Thus, it is necessary to carry out further analysis.
Using the graph given above, it can be seen that the price is fluctuating violently. It is difficult to forecast whether the price will go up or go down at the time of expiry, which in turn has been proven by results from Trader’s Choice.
Experienced traders may already understand the risks since they have traded multiple times and gained analytical skills. However, for beginners, it is essential for them to be aware of the risks while trading binary options.
Do Not Use Trader’s Choice When You Trade Short-term Binary Options
Finally, there is one last thing you need to pay attention to. It would be better not to use Trader’s Choice when you trade short-term binary options. Why? This is because that it is impossible to see when the data are collected.
In short-term binary options trading, Trader’s Choice does not usually change in accordance with the prices. It is thus difficult to tell when the data in the Trader’s Choice are collected.
Take the above figure as an example. It is difficult to tell whether the Trader’s Choice is based on point A or point B. Especially, in short-term trades, the trading times and expiry times vary from one trader to another. It would be useless to refer to Trader’s Choice.
When you trade short-term binary options, instead of relying on Trader’s Choice, you should use other methods to analyze the market trends.
*Trading binary options involves substantial risk and may lead to loss of all invested capital. Past Performace is not a reliable indicator of future results. Trading alerts should not be considered as investment advice. The decision to act on any signals is yours and taken at your own risk.