VIX Index - Binary Options Trading
By Angela Sanders Tuesday, December 10, 2013, 02:30 AM EST
OneTwoTrade.com has changed my life. Sure, it sounds cheesy, but it’s true. I used to work two retail jobs to pay my mortgage and feed my kids. While they grew, I stocked shelves and rung up purchases. When I got home, they would already be sleeping. I was frightened that they would become adults before I had a chance to really get to know them. I vowed that I had to make a life change, somehow. Greg, a family friend, caught wind of my ruminations, and called me to come over his home on a Saturday.
When I first started out trading binary options on One Two Trade.com, I was entirely unused to making the sort of money I was making. I would sit down, select a collection of assets, leave, and 30 minutes later I would have made over $300. I was so content that I wasn’t looking for way to maximize my profits! Then, one of my trading buddies told me the she uses the VIX Volatility Index to make better choices about what assets to trade. By following her advice, I was able to start making money even faster! Today, I’ll teach you how you can use the VIX Volatility Index to maximize your profits the same way I did.
The VIX Volatility Index is a measure of how volatile, or how likely to change direction, the S&P 500 stocks are. Most of the stocks that you can trade binary options for on OneTwoTrade.com are on the S&P 500, so this makes the VIX an excellent tool for deciding whether or not you should trade stocks on a particular day. If the VIX is high, that means that S&P 500 stocks are likely to fluctuate in unpredictable ways in the near future. If the VIX is low, that means that S&P 500 stocks are more likely to continue to move in the same direction, or change direction very gradually.
You can check out the VIX index for yourself here.
The VIX index usually fluctuates between 11 and 22. The closer that this index is to 11, the more you will want to focus your trading on stocks, because the stocks will be more likely to move in the same direction. To make things really easy for you, here are some simple guidelines to help you trade binary options using the VIX!
When the VIX Index is below 14: now is the time to trade mostly in stocks! I you’re trading binary options in batched of 12, then make 6-10 of your trades stocks. If you can’t find that many stocks where the prices have clear upward or downward trends, don’t start placing orders for stocks with neutral graphs just for the sake of getting more stocks into your portfolio! Make sure that you take advantage of as many stock opportunities as you can when the VIX is this low, but don’t trick yourself into chasing opportunities that aren’t there.
When the VIX is between 14 and 18: This is the range where the VIX stays most of the time. When the VIX is in this range, 1-5 of the binary options I trade are in stocks. When the VIX is in the lower end of this range, I try to fit more stocks in. When it’s on the higher end of this range, I mostly leave the stocks alone.
Even if the VIX is close to the top of this range, though, it’s important to keep just a couple of stocks in your trading cocktail. Remember, keeping a diversified set of trades is the cornerstone of risk management! Even when they end up losing, having one or two stocks in your binary option portfolio in the 17-18 range is following best practices, and will pay off in the long run.
When the VIX is over 18: When the VIX is in this range, I like to just avoid stocks altogether! When the VIX index is up here, the stock market behaves like a bucking bronco. You don’t know which way it’s going to go! In these situations, I just focus on trading currencies and commodities, which are largely unaffected by the VIX index.
OneTwoTrade.com is certainly my favorite place to trade binary options. They have the largest selection of stocks for trading binaries on the web! This means that I can take full advantage of the market when the VIX Index is low. For example, during the last five weeks, the VIX Index has consistently been between 12 and 13, and I have consistently been trading mostly stock binaries. I haven’t had to look hard for good stocks to trade because there are so many to choose from on OneTwoTrade.com. Thanks to the VIX Index and One Two Trade, my profits during the last month have nearly doubled from the month before!
No matter what the VIX index is, start using the VIX to make better trading decisions today. Happy trading!
About the author: Click here for OneTwoTrade's officle Youtube Channel.