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What To Consider Before Replicating A Binary Options Trade

There will be times when replicating a binary options trade is an excellent idea. This is particularly true when a price trend is taking place. Some brokers now offer a trade replication tool, allowing traders to create duplicate trades with just a few clicks. Whether this tool is used, or copy trades are created manually, there are several things to consider prior to opening up a new position based upon the results of an expired position.

There is most definitely a right and wrong time to replicate a trade. The correct time would be when the price of your chosen asset is clearly trending in the direction you had forecast, and this movement seems to have some lasting momentum. The selection of short-term expiry times can help to quell some momentum concerns, but it remains vital to establish that the price is moving in the desired direction. Any type of price action outside of a trend should be viewed as reason for not duplicating a recently expired (or live) position.

Once the decision to replicate a trade has been made, a replication tool can be used to copy the original option within mere seconds. As convenient as this may be, keep in mind that the new position will open with the most current entry price, and not that of the original position. The same would apply if a new trade were to be opened manually. Always remain mindful of this fact, because if the price momentum is weak, the level of risk associated with the new position may certainly be higher.

There does exist another tool which can be used to replicate binary options trades. This is known as, “copy” or “social” trading. This type of feature makes it possible for traders to copy trades entered into by the top earners within their chosen platform. Most often, this feature opens new positions automatically, but specific parameters and investment limits can be selected in advance. While this tool has become quite popular with traders, each individual will need to decide whether or not they feel comfortable in using it.

Replication can continue so long as a trend is in place. As for analysis, be watching for any signs of erratic movement or an upcoming reversal. Erratic movement is caused by indecision on the part of investors, and this type of movement is certainly not desirable. A reversal, however, can be, as traders may be able to trade along with the new direction of movement. Advanced price charts can be used to spot areas of a possible reversal. However, novice traders can use basic charts to identify a reversal once it has taken place.

The primary advantage of trade replication would be the potential to generate profits quickly, while performing only minimal analysis. Since the vast majority of the time spent trading binary options is devoted to the analysis process, any opportunity to utilize those findings more than once is certainly an advantage. Not all positions can or should be replicated, but from time to time, traders will be presented with opportunities to take advantage of optimal price action multiple times within only a short period of time.