In this introductory article, we will be covering trader choice and market sentiment analysis as it is used in binary options trading. For those of you who are relatively new to the investing industry, it should be known that there are several different styles of trading analysis that can be applied when investing online with binary options:
The binary options industry is one of the most liquidated investment industries to be offered for investors of all experience levels. Perhaps the only unfortunate characteristic in regards to the binary options industry would be how simply and easy profitable binary options investing is made to seem. Now, don’t get us wrong. Binary options investing is quite simplistic and relatively straight-forward, but to invest profitably is a different story. There are many reliable binary option trading softwares, services and systems that have been designed to increase your probability of success within this industry, however perhaps the most overlooked trading tool would be the trader choice tool which reflects market sentiment.
About binary options market sentiment
For those of you who are unfamiliar with market sentiment, it refers to a composite overview reflected by a wide number of investors in regards to their predictions for the future performance of an underlying asset, a class of similar assets or overall future in regards to the financial market. These composite predictions of the future performance of assets are measured in regards to the movement of price and trading volume. Due to the complex functionality of market sentiment, investors can make themselves familiar with current predictions regarding the future performance of a particular underlying asset, allowing them to execute a better informed investment that offers a higher probability of success.
Binary options market sentiment example
One imperative mental note to keep in mind if you are considering applying market sentiment analysis to your binary options arsenal would be that it can be classified in one of two ways. Market sentiment can be categorized as either a bearish or bullish market, depending on the overall prediction casted and executed by the investors sharing your trading platform. In order to get a better understanding of these future performance predictions, binary option investors analyse the trader choice tool offered on nearly every binary options trading platform. To take advantage of binary option market sentiment, feel free to open a live feed demo account with SpotOption, one of the most popular binary options trading platforms (not available in the US and a few other countries).
Once you have opened a live demo account, you will have $50,000 in demo account money, which not only is extremely helpful when testing out new binary option trading strategies, but also a great resource in better understanding how to properly use the traders choice tool and market sentiment to make more informed and accurate binary option investments. Once you are logged in you will see a number of trading styles that are commonly offered by most reputable binary option brokers. Just so you know, even though this is a demo account, all investments are based off a live feed so this demo account operates in the same exact way a live binary options trading account does.
Properly using the trader choice tool and applying market sentiment analysis is relatively straightforward and can be done by even the most novice binary options investor. When looking to place an investment you will see the a technical chart that will display the live feed of an underlying asset. Right below that you should see a fundamental tool labeled trader choice. Trader choice will look like a horizontal bar graph that is characterized by red and green margins that are used to display market sentiment for that particular binary options asset. If the trader choice tool is reflecting a red percentage of 58% and a green percentage of 42% it means that 58% of investors believe that the price of that asset will head in a bearish direction while the other 40% of investors believe that the price of the asset will head in an upward direction.
Applying market sentiment and trader choice
Since the majority of binary option contracts expire within the confines of an hourly timeframe or at the end of the trading day, investors only need to analyse the current market reports that can indirectly affect the market sentiment represented by the trader choice tool. Although fluctuations may occur in the market for a short amount of time, the overall market sentiment in regards to longer investment options have statistically proven to be more accurate. If you notice that the market sentiment reflected by the trader choice tool shows that 75% of investors predict that the value of a particular asset will rise then you will have a much higher probability of success investing with a CALL investment than you would with a PUT investment where only 25% of investors believe the price will fall.
Market sentiment conclusion
Utilizing the trader choice tool which accurately reflects market sentiment in regards to binary options investing is not only one of the most overlooked trading tools but one of the most effective trading tools for binary option investors. Trading with the majority of market sentiment will yield much more accurate and profitable investment returns opposed to executing investments that you aren’t sure about. Opening a free demo account is simple and taking advantage of the trader choice tool is even more rewarding. Please feel free to contact us if you have any questions, comments or suggestions or if you would like to join our manual signals group on Facebook to enjoy free signals from professional traders. You are also welcome to check out our most recommended binary options trading strategies.