The Digital Option investment form will be quite familiar to traders who trade in IQ Option using smartphones. However, it is very strange to traders on the IQ Option platform using computers. This is a form of investment that offers many advantages for traders to choose in parallel with other investment channels. In this article, I will introduce to you the Digital Option investment form in IQ Option.
What is Digital Option?
Digital Option (digital investment) is a commercial tool developed and introduced by IQ Option in recent years. It allows investors to be more profitable than options trading. Digital Option is a method combining the features of two trading types: Classic options trading and binary options trading that are available on IQ Option.
With the digital options tool, traders can enter a trade by a combination of a variety of different tools. The profit and risk of each trade will be calculated depending on the manually selected strike price. This is the feature that distinguishes Digital Option from other tools.
The breakthrough of digital options
Digital Option offers a high degree of freedom for investors, as it offers a higher income potential that not all options transactions have. Traders can determine the benefits of their trades with Digital Option in IQ Option.
They can change the amount of potential profit and risk by simply adjusting the price of their chosen trade. The potential profit increases proportionally to the risk. It is an inevitable fact that traders face.
When the strike price is set closer to the current price, the investor will reduce the potential profit of the trade. At the same time, they limit the risk that they face. Conversely, an investor can accept a higher risk by pushing the strike price higher than the actual price. If the successful trades have a higher risk level, the profit you get sometimes can be more than 100%.
Regarding digital options in IQ Option, investors can also sell a trade before it expires. If traders feel that their trades are going in the wrong direction, they have the right to sell them at any time. This trade selling can be completed with just a few clicks on the IQ Option platform screen.
How to trade Digital Option in IQ Option
In order to open a trade with the Digital Option trading tool in IQ Option, the investor must perform the following steps:
Select the desired asset portfolio for investing and trading.
Choose the amount of investment for this trade.
Choose a strike price that you think is reasonable.
Click on the “HIGHER” button if you predict that the actual price of the trade will increase.
Conversely, click on the “LOWER” button if you expect the price to decrease in the near future.
Wait for the expiration time to come. Or if you find your orders in the wrong direction, sell your orders as soon as possible to limit your risk.
Notes when trading Digital Options
Basically, with digital options in IQ Option, traders only have two parameters in addition to the type of assets that they will have to adjust when setting up a trade. These are the amount of money they want to invest and the strike price that the investor chooses.
However, investors must also have a clear trading strategy when engaging in trading digital options. Choosing the right strike price to get profits is not an easy thing. Depending on the various factors, investors will have to consider wisely. Choosing a too high strike price offers huge profits but also brings significant risks.
Conversely, if the strike price is too close, the profit will not be much. There are many investors choosing a very high strike price when trading digital options in IQ Option. They are willing to take big risks to be able to pursue higher profits.
Minimize the risk with Digital Option
To minimize the risk with digital options in IQ Option, we can apply risk restriction principles using adjustable parameters for digital options. Regarding the amount of investment, some investors believe that allocating more than 2% of the owned capital for an order is too risky. It does not help your trading process sustain over the long term. Therefore, consider trading with no more than 2% of capital for a single order.
Regarding setting the strike price, in order not to be too high nor too low in addition to observing the price prediction, there must be a combination of many technical analysis methods provided by IQ Option, especially the momentum indicators. Trend indicators like the SMA (Simple Moving Average) show that prices will rise or fall in the long run. These are really useful for investors when using digital options trading tools in IQ Option.
Review on opened Digital trading orders in IQ Option from July 13 to July 14
Trading strategy: T.L.S (Trend -> Support/Resistance -> Signal). If you still have not known this strategy, please review here: https://blogtien.com/phuong-phap-giao-dich-tls-iq-option.
Capital management method: Classic (balanced investment)
1st order: Downtrend + the price hit the resistance zone with a Gravestone Doji candlestick. Opened a LOWER order with the strike price lower than the current price to receive a profit of 105%.
2nd order: Uptrend + the price touched the support zone with a Doji candlestick. Opened a HIGHER order with the strike price higher than the current price to receive a profit of 90%.
3rd order: The price broke out of the resistance zone forming an uptrend, then returned to test the support. Opened a HIGHER order with the strike price higher than the price of the Doji candlestick that hit the support zone to receive a profit of 90%.
4th order: A Morning Star candlestick pattern appeared in an uptrend. Opened a HIGHER order with the strike price higher than the price when the Morning Star candle pattern was confirmed.
Notes: In options trading, you will receive a refund when the closing price is equal to the price at the time of opening the order. But in Digital Options trading, you will be judged as losing when the closing price is equal to the strike price. Please read the rules of each type of investment carefully to avoid misunderstanding which may lead to suspicion of fraud.
This deems to be a popular investment channel for those who have effective trading strategies. You can increase profits optimally when there are successful trades, but do not ignore the risk. Your mind should be as cool as a cucumber to analyze the movements of future prices. You should not set the desired profit level too high, making your success rate lower.