The rise or fall of a price of an asset depends on the demand that has been created for it and its supply.
A Long Term Binary option can be a very good method to predict the future, provided that the forecasts made are precisely. This option is greater suited for the more experienced traders. It predicts a target price of an asset by a predefined time.
An expiry period of a Long Term Binary Option is general from one week up to an year. The process is similar to that of a classis option. Firstly an asset is selected and an expiry time determined, an investment is specified and a Call or Put option is predicted.
There are only two outcomes for a trader to expect – either the trade could be ‘In the money’ or ‘Out of the money’.
There are no fixed investment prices in this method and one can expect up to an 85% return on investment. An asset is selected from the different categories given – Forex, Commodities, Currencies, Stocks, Indices or Pairs.
While decisions on short term options are quick, traders take more calculated decisions when selecting to trade on Long Term options. Decisions are more analytical, logically thought of and strategized.
There are different signals to indicate the movement of stocks. Natural occurrences, such as extreme weather conditions and disasters that will have an impact on harvests, political changes in a country affecting the policies and economies of those countries, will change the forecasts of Long Term trading. E.g. A ruling party of a country changing may have different trade policies implemented or staff of a certain company being taken employment by its competitor.
There are many trading options offered in Long Term binary trading. They are Double Up, Sell Back, Take Profit and Hedging.
To briefly explain it, ‘Double up’ is an option offered for a trader to double his stakes for an open trade. This means that the trader can buy another option of the same asset, expiry time, with the same direction and at the same price and payout, by pressing the Double-Up button.
In the case of a ‘Sell Back’, it is allowed for a trader to sell back to the broker on open trade and when in-the-money, for a profit. If in out-of-the-money position, the trader can sell back for a lesser amount than he invested to mitigate losses, during open trade yet again.
‘Take Profit’ advises the trader if his active position is in-the-money or not before it expires. This enables the investor to exit from the trade in advance, for a minimum commission. This option would be ideal if a change is expected in the price trend.
‘Hedging’, on the other hand, is more of a safe option which is taken to reduce the risk of losing while increasing profits. For this purpose, it is required to place two bids, both on Call & Put directions, whereby there could be a win in both instances or in one definitely.
Long Term binary trading is a tool more attractive for experienced traders as it requires patience and confidence in monitoring the trends. In this, the losses can be kept to a minimal while expecting higher gains. E.g. the best times for fashion industry sales are during the holidays. Thus to make a Call option 6 months earlier on a company doing relatively well in the industry, would be beneficial.
These are signals that are available in the market which help Long Term Trade profitability.
Binary Options Signals providers offer current trends through graphs. They are either upwards or downwards. Assumptions of trends are made through past histories. Trends can be categorized as Bullish for upwards, Bearish for Downwards and Flat with no movement either way.
Long Term Trading is very much similar to short term trading with the exception of the expiry time set for a longer period. For the prediction of the target price to be reached, takes a longer term. Therefore the risks are higher. Making the right prediction can be very fulfilling for traders who are experts in the area and can expect high returns for their investments. Hence a foolproof strategy is essential when choosing the option.