Binary option trading has become an attractive form of investment for cryptocurrency enthusiasts and bitcoin traders due to its stability and predicted income.
Typically, investing in cryptocurrencies, such as bitcoin, generates high profit margins if the volatility and the fluctuation of the bitcoin price are used to the trader’s advantage. However, predicting the price trend of bitcoin is a virtually impossible task to accomplish and doing so comes with great risks of large losses.
Losses hard to predict
One major issue with trading cryptocurrencies, such as Bitcoin and Ethereum, is that, like the profit margins, the magnitude of the losses are difficult to predict and thus, investors may find themselves in a difficult position to recover financially and protect their assets. If the price trends of the world’s largest cryptocurrencies are evaluated, it is evident that digital currencies could spike up to 4x or vice versa in a very short period of time.
An increasing number of bitcoin traders and digital currency enthusiasts have been trading binary options for this very purpose. Instead of risking large sums of bitcoin or other reserve currencies to a fairly high probability of a loss, binary options allow the traders to foresee their predicted gains and loss, to prepare for what may happen in the future. The advantage of trading binary options is that traders and investors can implement various strategies to reduce the risk of a loss.
It is possible for traders and investors to decrease the risk of fixed losses in trading binary options by implementing various strategies which are better known as platform-independent strategies. Users and traders with little or no knowledge in the investment pattern or price trend of Bitcoin can use these strategies to neutralize any losses and optimize their gains.
Martingale system
One of the oldest strategies amongst platform-independent strategies is the Martingale system. In this investment structure, an initial stake and a position are established. If the binary option trading succeeds, the stake remains the same. If not, then the stake is doubled for the next position. The concept behind this strategy is that the user will eventually make a successful binary option trade as time passes. Even if users fail to succeed in their past trades, it is possible for traders to neutralize their losses with an eventual gain in profit.
D'Alembert system
Another platform-independent strategy is the D'Alembert system. This strategy shares the same core concept and principles of the Martingale system, but uses a system of increasing the investment after a loss and decreasing it after a win. For example, if the initial stake is 1 unit, then a loss would mean that the next stake should be 2 units. A further loss would increase the stake to 3 units, then 4 units, etc. A win means you should decrease the stake by one unit, for example, from 4 units to 3 units.
By intelligently implementing these strategies, independent traders can generate stable revenues and profit margins to support their living without ever leaving the warmth of home.