Using Traders’ Choice Bars in Your Binary Options Strategy
If you poll ten option traders, you will more than likely get a different binary options strategy for each one. This is because there is an untold number of tactics, techniques, and opinions about how to trade binary options successfully. One tactic employed today by some option traders in the field is the use of traders’ choice bars.
Traders’ choice bars are indicators used by some brokerages on their trading platforms to give option traders an idea of how the trading community as a whole is treating a particular set of binary options. In other words, it is designed to give a trader the market’s consensus on a particular asset or group of assets.
This article will explain how this technique can play into your binary options strategy in binary options trading today.
What are Traders’ Choice Bars?
In binary options trading, each asset trade has only two choices: Call (Up) or Put (Down). In other words, you are either betting that the asset will rise in value or will fall in value before expiry.
A traders’ choice bar is an indicator located on some user interfaces in the market that tells you what the market is doing as a whole. The indicator is most commonly expressed in a percentage for each of the two binary options. For example, it may say that at this moment, 57% of traders are placing Call options, and 43% are placing Put options.
This could apply to the market at large for a particular trading day, or could refer to binary options trading on a particular asset. Either way, it is a visible way to gauge overall market sentiment at any given time, and delivers a snapshot of popular activity for a binary options platform.
How to Trade Binary Options with Traders’ Choice
The most common strategy used by traders today is to trade binary options that feature traders’ choice bars and using the results to compare to the charts for the trading period.
For example, let us say that a stock is currently running at 100. For most of the day, the stock has fallen from an opening price of 110. The price to hit is 99, and expiry is an hour away. You see that the trend has been downward for the stock for most of the day, and a look at the traders’ choice bar shows that 60% of traders are putting in Put options.
The strategy suggests that you place a Put option as well, given that chances are it is going to hit that mark. This is just a suggestion, however, and not a hard and fast rule.
Platforms with Traders’ Choice
You can find a wide variety of trading platforms in the market that offer some version of traders’ choice bars that can help you figure out the market sentiment. OptionBit.com offers such an indicator, as does WinOptions.com. StartOptions.com also offers this indicator to interested option traders who want another tool in their trading toolbox.