Psychological level strategy
In trading with binary options we can use many investment tactics and various tools like signals for binary options, that can help us strategy psychological level provide some advantage when operating.
Depending on the investment objectives you have and the level of risk you are willing to assume to achieve these objectives, it will be better for you to use some strategies or others.
The strategy we are going to deal with now is related to investor psychology and how certain ways of acting can help you gain that confidence you need to believe that you will get the benefits you are looking for. There are strategies that will help you operate, such as the closed number strategy, also called round numbers.
Round numbers are those that psychologically offer us a clearer vision in our operations. For you to understand me, if you are going to negotiate with an underlying asset, whether they are currency pairs, indices or securities, you will have to do it when the price is double zero (00) or triple zero (000), both for upward trends and bass players
That basically consists of operating in round or closed numbers. Even so, for you to see it clearly, I will give an example that can surely help you understand it even better. Pay attention to the following practical example.
How The Strategy Works
Get in touch with currency pairs and choose the euro dollar (EUR / USD) pair that is usually the most active in the currency markets. The latest news shows that the euro drops to $ 1,3200, so it is already touching a key psychological level by having double zero (00).
At this point you should be able to bet on a CALL type purchase option without problems since the most logical thing is that the prices go up a bit, which will generate benefits.
Remember that when you trade with options, it only counts if the price went up or down, regardless of whether it was a lot or just a few tenths.
On the other hand, although these round numbers are visually more attractive, the truth is that you can also operate when the prices are for example between 1.3189 and 1.3199. In this way you can also increase your chances of getting it right, and you will not need to have analyzed the price limit levels.
It should be noted that the psychological levels of the price act as resistance and supports, that is, the limit prices with the maximum and the minimum that the price can reach.
In all the underlying assets with which you will be able to trade with binary options these levels exist, either in raw materials, indices, securities and the aforementioned foreign currency pairs.