How can Short Selling Help Your Binary Options Trading

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The primary reason why people come up with really genuinely terrible strategies that you see all over YouTube is because they don’t actually understand what’s going on behind the price. And if you don’t understand what’s causing that price to do what the price does, you’re going to start creating strategies based on imaginary lines and based on things that you’re seeing that aren’t actually really causing anything to happen. There might be a little bit of a correlation that you’re seeing there. No problem. But remember correlation is not causation. And so if you don’t know what’s causing that, then you’re just going to come up with strategies that don’t work over a long period of time. You’re going to find that those strategies might work one day or two days, and then they don’t work anymore. And so how do you overcome that? Well, that’s a really important thing. And another thing that you might see is that, you know, you start with a strategy and then you change strategies and then you change strategies and you change strategies and that’s because you have no idea what’s actually going on behind the scenes. So I’m starting a brand new video series where I’m going to be teaching you what market dynamics are so that you can be consistently profitable over a long period of time.

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Because quite honestly, if you’re anything like what I was, you do not want to need to constantly change strategies. Like it’s terrible, it’s horrible, and maybe you’re jumping in on a strategy that you saw on YouTube And you want to know maybe why that works or better yet You want to know why it stopped working and really it stopped working because it was terrible to begin with You know like if you if you try and make a cake and you’re using Motor oil it’s going to turn out to be not a very good cake. You have to use good quality ingredients in order to make a cake that actually tastes good. And then if you use really high quality ingredients, really really good quality ingredients, and you can have a cake that tastes really good. And so I’m here to show you what these high quality ingredients are so you can have a trading strategy and a methodology in which you approach the market like a professional trader. I want you to be a consistently profitable trader over a very very long period of time and not someone who can maybe make money for about three four days and then lose all of your account after that. So let’s get started. There are a couple of things you need to understand before we can really start getting into these deep market dynamics. That’s all going to come.

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And you see when, when you start binary options trading, there are all, there are people coming from all kinds of different backgrounds. Some people have experience in trading already and then they discovered binary options and like, Oh great, that’s for me. I totally want to do that. There are some people who do not have any trading experience whatsoever. Maybe they just looked up online how to make money online and found something along the lines of binary options and so then they started doing that thinking that it looks easy it is easy but there are some things you need to know some very important things that you need to know so so I want to I need to start out by explaining some of these dynamics so that you can develop a really good quality trading strategy or know really quickly if a trading strategy actually is good quality or if it’s crud.

03:49

I don’t know what I’m allowed to say on YouTube, so I’m going to say crud. All right, so let’s jump into this really quickly. I’m actually going to share my screen here and I got my whiteboard and the thing that you want to know is why are people selling? And obviously, one of the reasons people sell is because they want to get out of their stock. And I’m going to use stocks right now for an example, because that’s what’s easiest for most people to wrap their brain around. So you buy a stock, the stock moves up for a while, and then you want to sell that stock to either move into another stock or use that that profit to, I don’t know, buy a boat or send your kids to college or whatever.

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Okay, that’s one of the primary reasons why people sell. Another reason why people sell is because they’ve lost money on that. They want to get out of that stock before they lose more money. And they want to be able to, um, uh, yeah, just moving to something else that’s going to make them money. But then there’s another primary reason why people sell a stock. Uh, and this has more to do with trading than it does with investing and that’s a concept called Short selling and maybe you’re familiar with this already But I’m going to explain it anyway, and I think I’m going to explain it in a way that maybe you’ve never heard before Let’s assume for a moment you own Apple stock, and this is a ticker symbol for Apple AAPL and currently Apple stock is trading for about $170.

05:17

Trading for about $170 and you think that, and I don’t know, let’s say in the next six months, Apple stock is going to lose value, it’s going to drop. And you question, is there a way that I can make money while the Apple stock drops down? It’s very, very clear that you can make money after Apple stock drops. Like you know it drops down to what you know I don’t know a hundred and say it drops down to 153 dollars for example and then you want to buy at 153 dollars and because you think that 153 dollars is going to start going back up. So you so you wait for the drop and then after it drops you buy and then you make money as it’s going back up. But that’s not what I’m talking about here. I’m talking about can you make money while the stock is dropping from 170 down to 153. Can you make money during that period? And the answer is yes through something called short selling. Now don’t confuse short selling with short selling in real estate. That is a completely different, it’s a different ballgame. It’s not the same thing. So how can you do that? Imagine for a moment now the current price is $170 and you do think that in say six months it’s going to be $153.

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And what can you do? Well there’s a way of being able to go to your stock broker and borrow Apple stock you don’t currently have it, but you’re gonna ask your broker Hey, can I borrow Apple stock and let’s say you know you so so now you you her and the broker says yes And now you have borrowed Apple stock it’s now in your account as if you own it You don’t own it, but you are borrowing it and is as if you own it and at that point you can sell it. You borrow it to sell it and so you sell it to somebody you don’t know who you sell it to somebody for a hundred and seventy dollars. It’s kind of like imagine that you have a cup or you imagine there’s a cup that your friend has and that cup is going to be worth $5. And so you borrow a cup and then you sell it to someone and now all of a sudden you have $10 that you didn’t have before.

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But you still owe your friend a cup. Your friend is like, okay cool, in a few months you’re going to get me my cup back. No problem. Well it’s the same thing. You borrow the stock and then you sell it. You sell it for $170. You now have $170 in your account but you still owe your broker Apple stock. Now six months later and we’ll just go with the same example that I used up actually worth $153. So you go and you say, all right, I want to buy my Apple stock back because I need to give it back to my broker.

08:31

I promised I would do that in six months. And so sure enough, you find on the market, it’s worth $153 and you buy it back. You now have Apple stock in your account and you’ve paid $153 for it you give your Apple stock back to your broker and so your broker is now happy because your broker got the stock back maybe you paid a little bit of interest there in fact you would have paid a little bit of interest there so the broker made a little bit of money the brokers got their stock back great in your account. $170 minus $153 is $17 or in other words you made 10% on that deal. The price of Apple dropped and you you sold Apple at $170 the price of Apple dropped you bought it back at $153 you gave the Apple stock back you profited 10% on that deal and that’s a common reason why people will be selling in the market and there are different ways that that that traders will will be able to estimate what the future with the future price of that stock will be and there are ways that that a trader will say, all right, right about this time is when I expect that drop to start.

10:07

And so you can predict that with a good amount of certainty if you have a high quality strategy to be able to do that. And the trick is being able to know when most people are going to see that $170 and say, this is where I’m going to sell there. And you have to understand short selling in order to be able to do that and in future videos I’m going to bring out what you can do with the power of this understanding and how you can find where most people are going to be selling there because if you can know where most people are going to be selling then you can just simply do the same thing that they’re doing and the price will move in your direction. And it’s not based on some imaginary line that some mathematician came up with which is a really you know we’re probably really really cool but it’s actually knowing well what are people real human beings doing and not just what is this line say well now it should do this but how can you know what real human beings are doing because that’s what you need to know. Where are real human beings going to be selling? Where are real human beings going to be buying? And when that happens, you just simply get on the bandwagon and it becomes really, really cool. So that needed to be talked about in order to be able to go on to future lessons. And join us in the trading room and we talk about all of this stuff and more going to deep dives so that you’re so you’re not jumping on I’m just gonna say crap strategies you know like we’re just stop that it’s not gonna get you anywhere you’ve already done it up till now I’m gonna just go on a rant here for a moment you’ve already jumped on these strategies because you found them on YouTube and thought they were working you’re seeing how the price is moving.

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And yes, the price moved when that thing happened, whatever that thing might be, but that’s not what caused the price to move. It is not. And I promise you that you’re gonna continue experiencing what you’ve always been experiencing. Your future will be just like your past. Your past is you do the strategy exactly right, and you continue to lose money and you know what your future is going to be the same way if you’re basing your whole future on a strategy that doesn’t have anything to do with real market dynamics. So this is what we’re doing over the course of the next several videos and helping you understand what’s causing this price to move so that you can just simply very easily get on board with what everyone else is doing in the market?

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So looking forward to seeing you in the trading room looking forward to seeing you in the next video drop a like, drop a share, drop a comment. I don’t know what people are supposed to say on YouTube drop a comment, Click like share the video something like that. I’ll see you in the trading room