Binary options trading strategies can be classified as high risk, medium risk, and low risk. Long shot strategies are definitely high risk, but some traders really like these methods. The fact is, higher risk strategies have the potential for greater reward, which is appealing to less risk-averse traders. If you are on the fence about these kinds of methods, here are some things to consider.
A long shot trading strategy is a little like going to the racetrack and betting on the horse with the worst odds to win. The most likely outcome is that you’ll lose. But if the horse does win, the rewards are fantastic. While binary options traders dislike being thought of as gamblers, and doing your homework will dramatically increase your chances of success, the comparison holds true for long shots.
Most brokers naturally offer lower returns on trades with almost certain returns. If a stock is on a solid upward trend and you put in a “Call”, your potential return will be much lower than if you had gone against the flow and issued a “Put”. Of course, going against the trend is unwise unless you have a really good reason. Solid research and analysis can help you figure out when a reversal could happen before a trade expires.
While it’s not a strategy per se, high yield trades are a bit of a long shot. Returns on these types of trades can be huge, occasionally surpassing 1,000%. Obviously your broker doesn’t want to pay out returns this high, so winning with these trades can be tricky, but possible. Traders who are skilled at reading markets and accurately predicting changes can be quite successful.
A long shot isn’t guessing at what prices will do, and it’s not randomly choosing trades. Those types of strategies are gambling at best, not long shots. While it’s possible to get lucky and profit from guessing with Call/Put trades, your odds of success will be significantly higher if you take a little time to do some research. Guessing might net a bit of profit occasionally, but is far from sustainability over long-term period. If you want to be a serious trader of binary options, dedicate time to research and analysis.
Long shot strategies are typically ill-advised, particularly for those who are new to binary options trading. Having that in mind, experienced traders may do well with high yield trades. It’s possible to win with these contracts, but only if you do your homework. Risk-averse traders would do well to avoid these and go with lower risk strategies. Low risk methods can still offer substantial profit and save your nerves.