You can benefit from the abundant rewards of trading binary stocks. Aside from gaining access to a number of stocks across the globe, you can also make profit from the short-term changes in the stock prices. Some of the most popular stocks involved in binary trading come from financial, technology, telecommunications, and other industries.
Four things you should know before trading binary stocks
Before you open your first trade on stocks, it’s important that you become familiar with the factors that affect the movement of stocks prices.
1. Market sentiment – Observe the current condition of the market. If it’s gloomy or there’s some sort of recession in the global economy, then this could lead to stock prices dropping. This is primarily cause by most shareholders selling their stocks.
2. Status reports – it’s important that you acquire a background or history of a company’s earnings reports. This is because a positive or negative report can largely affect its stock prices. However, an increase in earnings doesn’t necessarily lead to a rise in its share prices. To illustrate this, consider a rise in Apple’s earnings. This could sound good, although if compared to other companies’ earnings for the same period of time, it can turn out to be less significant, hence it is bad.
3. Mergers – Acquisitions or mergers can improve the binary stocks prices of the companies involved. Moreover, this movement usually results in positive impact for the merged companies.
4. Government policies – A change in government policies could mean a rise or fall for stock prices. For example, if import duties on raw materials are increased for a certain industry, then the affected companies could become less competitive against foreign products.
How to trade binary stocks
In the same way that other assets are traded, binary stocks trading requires you to predict the direction of an asset’s movement by the expiry time indicated. But a unique factor in trading stocks is that it’s mostly dependent on news releases and earnings reports by the companies involved. To make profits, you opt to stay updated with the latest market trends and news releases about your chosen stocks.