What are the Best Times to Trade Binary Options

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Contents

Choosing the Best Time to Trade

Those of you interested in Forex have probably noticed that trading results depend on the time of the day. This phenomenon can be easily explained when looking into the concept of trading sessions. Forex is a 24/5 market, which means that currency pairs are traded around the clock Monday to Friday. It is possible thanks to the combination of four overlapping trading sessions that facilitate continuous trading. Due to various factors, volatility changes throughout the day. And as you know, trading results will depend on volatility. So, what is the best time to trade?

As seen in the picture above, volatility is different throughout the day, which, in turn, means that the number of trading opportunities and potential profit (or loss) will also depend on the time you trade. The higher the volatility the higher the risk-return ratio. More than that, each trading session has a number of distinct characteristics that traders might find worth knowing.

Pacific (10 PM — 7 AM GMT+1)

This is the first trading session of the day. It is the least volatile and massive price swings are not generally expected. Experienced traders do not usually trade during the Pacific session (due to low volatility), yet it is still possible to analyze the market and start making predictions. Currency pairs with AUS and NZD are quite popular during this session (which doesn’t necessarily mean that these are always the best assets to trade).

Asian (1 AM — 10 AM GMT+1)

Tokyo, Singapore and Hong Kong stock exchanges are active during the Asian session. Currency pairs that include the Japanese Yen are actively traded during this session. The number of active traders and volatility go up. The end of this trading session is usually more volatile than its beginning.

European (8 AM — 4 PM GMT+1)

London and Frankfurt are the most important financial markets in Europe. This session overlaps with the Asian session in the beginning and the American one closer to its end. During this section volatility has a tendency of going up. European currencies, including EUR, GBP, CHF, enjoy higher popularity (however this does not necessarily mean that trading these currencies will be successful).

American (1 PM — 10 PM GMT+1)

American, Canadian and Brazilian markets operate during this trading session. The American trading session is the most volatile and aggressive of all four. Market participants pay a lot of attention to major news and announcements that get published during this session. USD and CAD are actively traded during this time.

It is also worth noting that currency pairs that correspond to a particular region will have higher volatility during the respective trading session (like AUD for Pacific and JPY for Asian trading sessions). Traders are supposed to adjust their behavior to a particular trading session.

So, what is the best trading session and when should you trade? Well, there is no clear answer to this question, as trading opportunities are numerous and can present themselves on all four session. Still, experienced traders stick to the periods of high volatility, namely the European and American session. Novice traders may find it useful to try trading on all 4 sessions in order to familiarize themselves with their respective feature. And of course, the choice of optimal trading hours will depend on your location, as there is no need to stick to an unusual/unhealthy trading schedule.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.

GENERAL RISK WARNING

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You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Binary Options Guide: The Truth About Binary Options

Trading binary options can seem deceptively simple, but leaning too far into that notion can blind people to some of the risks that often accompany this type of trading.

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Before I go any further, I want to make it clear I’m not a binary options trader. I trade penny stocks and teach day trading. I’d love to see you join the Trading Challenge — it’s the result of over two decades of trading and a decade of teaching. It’s awesome.

If you’re interested in taking the binary options path, it’s critically important to understand exactly what you’re getting into and set appropriate expectations. And you should get a mentor who trades binary options. Seriously. Preparation is key.

Again, I don’t trade binaries. For the most part I think they’re scams. Can you trade them successfully? There are successful traders in every niche. But most traders lose. That’s the reality of the industry.

It doesn’t matter if you’re trading forex, penny stocks, options, big caps, or … binary options. Most traders lose and most trading teachers don’t want you to know about it. So I’m going to tell you about binary options in this post. But I don’t trade them and I don’t recommend it.

Will trading binary options enable you to buy a villa in the South of France next year? Probably not. Will they allow you to quit your full-time job and finally start on that novel you’ve always wanted to write? Don’t count on it.

Here, we’ll take a look at what binary options trading is all about and you can decide whether it’s right for you. As you read, keep in mind that binary options are getting outlawed in more and more countries. Companies are getting shut down. Or they’re based overseas in places where you can’t sue them. More on that later.

Table of Contents

What Are Binary Options?

Before we dive into specific binary options trading strategies, let’s review exactly what binary options are. According to Investopedia’s definition:

A binary option, or asset-or-nothing option, is a type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition, hence “binary”. A binary option automatically exercises, meaning the option holder does not have the choice to buy or sell the underlying asset.

At the core, binary options are based on a yes or no proposition. You must decide whether you believe an underlying asset will be above or below a specific price at a specific time.

Binary trades are ruled by expiry times. These time constraints indicate how long you have to make your predictions regarding whether you believe an underlying asset will be above or below a specific price at a specific time. Once the expiration limit occurs, your predictions determine whether you gained or lost money.

Expiration times vary from binary option to binary option. Some of these minimums are known as short expires, which means the expiration date is actually within mere minutes of the buy-in.

There are medium and long expiries, as well. For medium expiries, the deadline could be anywhere from two to five hours. Long expiries typically last between two and 24 hours. Many experts believe that longer expiration times can help make predictions easier.

What Are the Underlying Assets of Binary Options?

In order to participate in binary options trading, you must first have ownership of an asset that can be optioned for a fixed amount. The types of assets common in binary options include stocks, indices, commodities, and currencies. Many binary traders chooses to trade with stocks, as this option can allow them to get high returns within a short span of time.

Along with indices and commodities, currencies are another popular binary option vehicle. Since currencies are liquid and often subject to dynamic price fluctuation, many traders choose to analyze their binary options across the complex — and often shifting — global currency market.

A quick aside since we’re talking about forex. Be aware that the forex market is among the most difficult to trade. Why?

Because it’s the biggest and most liquid market in the world. You’re up against the smartest, richest, and often most experienced traders in the world. Personally, I don’t want to compete against that. Plus, the forex markets move so fast on news you don’t have access to, that there’s no edge whatsoever.

And now, a new asset has emerged: cryptocurrency. I don’t trade crypto, either. I’ve traded the random crypto-based stock. But this is a whole niche unto itself and I’m happy with penny stocks. Crypto has its own version of binary options — which is why I’ve included it here.

Led by Bitcoin, this new, digital currency class is intriguing investors around the world who see the digitization of finances as the way of the future.

According to Options Advice, there are two prominent ways you can capitalize on Bitcoin binary options. The first strategy is by trading on what you think the imminent fluctuation of Bitcoin might be, and the second is trading regular options with Bitcoins as your currency.

If you’re interested in taking the cryptocurrency binary options route, I strongly suggest familiarizing yourself as much as possible with the trends dictating the ebbs and flows of the altcoin market.

An entire niche financial industry has been built up around educating consumers and future investors of digital coins and tokens. From resources like Cryptoslate to ICO listing sites like Coinschedule, there are many resources available to help you make the most strategic crypto trading moves possible.

There are also a lot of scams. And strange happenings. Like when a crypto exchange CEO died with the ONLY key to $137 million in crypto. Ouch. More than 100,000 cryptocurrency holders learned a very hard lesson. Back to binary options …

What is a Call and What is a Put?

Two of the most common terms you’ll hear throughout the binary options world are call and put. These two labels represent the market positions of binary options.

You typically choose to call if it looks like the value will rise within the confines of the expiry time.

Options also have a strike price, which is the price at which the security would be bought or sold.

If you choose to call, you’re signifying your confidence that a stock will rise within the time limitations. If the stock valuation moves upward at all, you’ll receive both your initial investment as well as the return.

On the opposite end of the spectrum, a put signifies your confidence that the valuation of a stock will drop within a certain time limitation. So if you predict that a stock valuation will decline before the expiration date, and the stock does dwindle, you will have succeeded at that trade and will receive your initial investment — as well as the trade — back.

What Are Other Types of Binary Options?

Beyond call and put options, there are other distinguishing factors that separate binary options from one another.

This guide from Binary Tribune delves more specifically into binary options types based on the number of interactions a trader must initiate with the trade. The levels include one-touch, no-touch, double one-touch, double no-touch, and paired options.

Let’s take a look one-touch and no-touch options …

Essentially, a one-touch binary option indicates that in order for you to receive a payout, a trigger (or predefined barrier) must be reached. Traders often choose one-touch if they feel confident that a stock will move in a certain direction at a minimum amount.

The option only has to meet the predefined trigger level once (hence the “one-touch” term). However, as indicated by Binary Tribune, this strategy is often accompanied by some risk.

Beyond simply calling or putting, you also must feel confident that a certain valuation threshold will be crossed. However, with greater risk often comes greater reward.

In contrast, a no-touch binary option essentially depends on a trigger level not being reached.

Rather than hedging your bets that the valuation of a stock will rise above or dip below a specified amount, you’re betting that the trade will not dip above or below an amount.

Because you’re making the trade with the intention that a threshold will not be crossed in either direction, it’s referred to as “no-touch.” Like their one-touch counterparts, these trades come with greater reward — and risk — potential.

I liken one-touch and no-touch calls and puts to something like an electronic stop-loss. The problem is, you don’t have control. You’d better be damned sure you’re right. Which is impossible.

What Are the Pros and Cons of Binary Options?

Now that you understand binary options basics and the different factors between them, you might be wondering whether this type of trading aligns with your goals. Let’s weigh the pros and cons.

We’ll start with the benefits …

Low Barrier to Entry. You don’t need a masters in economics to engage in this kind of trading. For this reason, many first-timers enter the trading arena through buying and selling binary options. Comparatively, binary trading is relatively simple. When compared directly to other types of trading, including quantitative or arbitrage, trading binary options is straightforward.

Fast Returns. Many traders are eager to see fast results and liquidate within a specific time frame. Those who play the long game (investors) are typically most concerned with growing their money steadily over long periods of time. Many opt to invest in index funds, IRAs, or bonds. Trading binary options is fast paced.

Thing is … you can get all the speed you need trading penny stocks. So, while binary options might be a fast game, the reward might not be worth the risk.

High Rewards. Binary options trading is touted by those who promote it as high reward. It’s possible to receive up to a 70% return on their investments if your binary trades reach your expiration dates in the money. This high average return is what makes this type of trading vehicle attractive to many novice and expert traders.

As explained by Investopedia, the risk on binary options is capped off, so while the rewards could yield high returns, you can’t lose more than the cost of a trade.

Low Cost. If you’re just getting started with trading, there’s a good chance you don’t have excess capital lying around to snatch up shares of the fastest-rising stocks on the market. Binary trades offer an alternative to other types of investments that require high-capital buy-ins.

In theory, you can experiment with a binary trade for any amount you’d like, whether it’s $5 or $50. Starting small and working your way up to bigger trade amounts incrementally is a great way to learn the lay of the land.

As you familiarize yourself with expirations, strike prices and — if you’re interested in one- and no-touch options — triggers, it’s best to gamble with an expendable amount that won’t derail your entire financial status. Notice I used the word gamble — just sayin’.

Accessibility. Binary trading platforms make it easy to trade on any day and at any time. When it comes to binary options, traders aren’t necessarily beholden to standard market times and broker availability.

Now, let’s explore some of the disadvantages of binary trading …

Scams. Conduct any Google search on binary trades and one of the first things you’ll likely notice are the abundance of hits warning against binary scams and shady binary brokers.

Remember when I said I’d get back to the part about shady companies? Here goes …

… and I say this to protect and warn you.

Like I said, these companies are often based overseas. Places like Cyprus. (I have nothing against Cyprus. It’s a beautiful country with amazing people.) Anyway, these companies are based in places where you can’t sue them if they screw you.

Then you sign away pretty much your entire life in the forms they make you fill out. Your odds of winning are so low the brokers who do it are pretty much laughing at you. They’re laughing that so many people fall for this crap. It’s like going to the casino.

So, if you come across a binary broker that sounds too good to be true, it’s because he or she most likely is. And if you come across a binary broker who doesn’t let you liquidate your investment, run in the other direction.

Short term. Binary trades have expiration dates that are often fairly short windows of time. Given this, it’s impossible to use binary options as mechanisms for long-term investments. Which, of course, I don’t mind because I day-trade and teach day-trading. But if you’re looking for buy-and-hold investing, binary options aren’t the right solution.

Can You Really Make Money with Binary Options?

Short answer: It’s possible, but you MUST know what you’re doing. Like I keep saying. Most traders lose. Doesn’t matter the niche. I would never trade binary options. Ever. Your choice, I’m just tryin’ to keep it real.

If you’re serious about binary trading, start small. By making small trades and working your way up, you give yourself breathing room to assess market trends and develop the necessary skills.

As is the case with many types of trading, history is sometimes the best predictor of the future. Many successful binary options traders experience trading wins and financial growth because they’ve spent time studying and familiarizing themselves with market movements.

Wait. Does this sound familiar? Yep. You guessed it: you can’t cheat your way to success. Doesn’t matter the niche. I don’t trade binary options. I don’t recommend you trade them. But if you decide it’s for you then prepare yourself. Study your ass off.

Learning common candlestick patterns can make it easy to spot recurring trading patterns. If you want to understand candlestick patterns — and you do if you are serious about trading — I recommend you get a copy of the classic “Japanese Candlestick Charting Techniques” by Steve Nison. Doesn’t matter which niche you trade, this book should be on your bookshelf.

Of course, trading patterns are never 100 percent accurate, so don’t fool yourself into thinking of them as absolute stock predictions. However, the more you can learn about patterns and begin to recognize them yourself, the more likely you’ll be comfortable making your own options decisions.

Naturally, binary options contain risk. And by now you know my take. I pretty much think they’re scams. But there are differing opinions and some even consider them safe trading routes. I’m not gonna tell you not to trade them. I recommend you don’t. I’ll be interested to hear back from you. When you’re ready to trade the way I teach … apply for the Trading Challenge.

While it’s legal to trade binary options within the United States, they’re only available to trade on Commodity Futures Trading Commission (CFTC) regulated exchanges within the country.

Binary options traded outside the U.S. are structured differently to those traded here. You can learn more in this article on Investopedia: What You Need To Know About Binary Options Outside the U.S.

The Bottom Line

The good: Some traders like binary options because they are traded at fixed costs. You know where you stand.

The bad: Binary investments are too much like flipping a coin, there are too many scams, and your odds of winning are so low you might as well go to the casino.

The bottom line: Educate yourself like crazy. Avoid sketchy brokers. Start small and work your way up. Remain vigilant. Stick with these rules, and someday you might reach your trading goals. Will you do it with binary options? I doubt it. But you might prove me wrong.

Want to Try Binary Options Trading?

At this point, I hope I’ve shed enough light on binary options trading that you don’t do it. But … you might be thinking about giving binary options trading a shot. If you do, study your butt off. Get a mentor. Don’t screw around. The best of the best in every niche work with a mentor.

Trading — any type of trading — can quickly become complicated. Like any other sector of trading, it’s important to seek out an education before you attempt to invest in this way. I can’t help you trade binary options. But I can help you learn to trade penny stocks …

Is the Trading Challenge for You?

As a teacher I want to help my students forge long-term, sustainable careers as traders. The Trading Challenge can help you reach your goals through risk-averse, conservative trading.

Plus, my best students — those who have become millionaires themselves — join me in coaching you.

What do you get?

  • Wednesday morning live trading webinar. I show you live trades so you can see how it’s done. And it’s not only wins. These are true live trades. Sometimes I lose. But you’ll see how fast I cut losses and why I get out so fast when things turn against me.
  • Wednesday evening live lesson and Q&A. No matter where I am in the world. This is killer stuff.
  • Thursday live trading & review with Mark Croock. @thehonestcroock is at it every Thursday. You don’t want to miss this. Mark is one of my best students/teachers. He’s constantly in the challenge chat room alerting students.
  • Annual Penny Stocking Silver Membership. You need this. Thousands of hours of video lessons and archived webinars. Immerse yourself. This is how to get good fast.
  • PLUS: Two monthly bonus webinars by my top student Tim Grittani. It won’t take long to understand how Tim went from $1,500 to where he is now when you see how meticulous he is about his trades. Learn from a master.

WAIT! There’s more …

I always wanted to write that. Anyway, there is more, but you have to apply for the Trading Challenge to get it. Simple.

Will you be my next success story?

Conclusion

As you’ve now learned, if you study hard, start small, keep your scam radar on high alert, and stay educated, then becoming a successful trader is possible. But it’s not easy. So don’t even think about doing it if you’re not willing to work hard.

As for binary options …

Look, whatever you decide, it’s about how much time and effort you put into learning. I don’t think binary options are a good way to go. Plain and simple. But there are success stories.

If you’d rather learn what I teach, then apply for the Trading Challenge. But no lazy losers allowed. Seriously. Only join the Trading Challenge if you’re willing to work hard.

Are you a trader? Do you trade binary options? Comment below and let your fellow traders know how it works for you. Even if you are brand new, I love to hear from readers. Comment below!

The Best Binary Options Books for All Levels

Damyan Diamandiev
Contributor, Benzinga

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Binary options are a relatively new financial instrument. They came on the world in 2007 with the approval of the United States Securities and Exchange Commission. Ever since many traders prefer to invest in binary options trading due to their simplicity. Since binary options are a new, a lot of people are not familiar with their functionality. So today we will reveal some of the best binary options books for beginner, intermediate and advanced traders.

Quick Look: The Best Binary Options Books

  • The Binary Options Book Of Knowledge: Everything I Wish I Had Known Before I Started Trading by Christopher Carlson – Get this book
  • Binary Options: The Beginners Guide to Trade and Profit by Edward Dorsey – Get this book
  • Binary Options: Powerful Strategies To Dominate Binary Options by Jordon Sykes – Get this book
  • Call or Put: How I Profit Using Binary Options by Dennis Preston – Get this book
  • High Probable Japanese Candlestick Patterns by Theodore Kekstadt – Get this book
  • Day Trading: Vital Strategies for Intermediate Traders by Brian StClair – Get this book
  • 60 Second Binary Options Sniper: 60 Second Binary Options Sniper by Jack Swift – Get this book
  • Advanced Technical Analysis: The Complex Technical Analysis of Assets by Wojciech Jakub Podobas – Get this book
  • How To Master The Psychology Of Forex & Binary Options Trading: The Definitive Guide To Developing A Winning Trading Mindset by William Allen – Get this book

What Makes a Great Binary Options Book

Binary options are different than other financial instruments only in the way they implement trades and the final goal of a trade. In binary options, you need to guess if the price of the security will be higher or lower after a certain period of time. And you bet a certain amount of money at your call.

If you are right, you will make about 80% interest (rate depends on the binary options brokers) on your investment. But if you are wrong, you lose your full bet.

You will see a lot of similarities between binary options and standard forex or stock trading. This comes from the analysis part. Binary options analyzed same as other financial instruments. For example, if you have a binary option of the EUR/USD, you analyze it the same way as some other contract type of the EUR/USD. After all the EUR/USD is in focus.

In this relation, a lot of books that will help you with binary options are actually books about forex trading or stock trading. But one is sure, a good binary options book will never be overcomplicated. Make sure you look for books that are simple and free of comprehensive financial language. After all, your goal is to understand the theory and not to complicate this process.

Here are some of the topics included in some of the good binary options books:

  • Binary options fundamentals
  • Trade management
  • Strategy building
  • Risk management
  • Volatility
  • Volume
  • Technical analysis
  • Indicators
  • Moving average
  • Oscillators
  • Momentum
  • Inflation
  • Monetary policy

Some of these topics are for beginners, others are for intermediate and advanced traders. But each of these topics is essential for your successful binary options trading career. You will find each of these topics in different books that are useful for binary options trading.

The Best Binary Options Books

The different books about binary options will include different theory. And this theory is suitable for the different level of expertise in trading. This is why we will separate the best binary options books in three different groups.

1. The Binary Options Book Of Knowledge: Everything I Wish I Had Known Before I Started Trading by Christopher Carlson

  • Who’s it for? Beginners
  • Price:On sale

The Binary Options Book of Knowledge is a book for people who are about to enter the binary options market. The reason for this is that the book is like a guide, which aims to clear out the entry-level confusions of binary options trading.

Some of the topics covered in the book are:

  • Which currency binary options to trade
  • What is the best time to trade
  • How to recognize winning opportunities on the chart
  • How to avoid scam

These topics are essential for people that have not started trading binary options. If you are already a trader, then maybe you already know the answers to these questions and you need to look for a more advanced book.

2. Binary Options: The Beginners Guide to Trade and Profit by Edward Dorsey

  • Who’s it for? Beginners
  • Price: On sale

Another good book for binary options trading is The Beginners Guide to Trade and Profit. In this book, Dorsey reveals the ways you can make a living from binary options trading.

The book focuses on some raw basics like how binary options work in general and also covers trading strategies and risk management.

One of the main topics of this book is how to lower your risk when trading binary options. However, this book also covers some fundamental analysis parts as it reveals which world events are likely to affect the price of a respective financial asset and its binary option.

3. Binary Options: Powerful Strategies To Dominate Binary Options by Jordon Sykes

  • Who’s it for? All levels
  • Price: On sale

This book is written by Jordon Sykes, an author that concentrates his writings on trading topics for beginners. Sykes shares his vision about how to make money from trading binary options. The best of the book is that it also includes some technical analysis insights, which are helpful in trading with binary options.

Sykes admits that his books won’t help you master the subject of trading, but will help you go deeper in some subfields, which can pay you back well later.

The book compares different strategies and shows you what works and what doesn’t. Although the book is for beginners, it will also introduce you some a bit more advanced practices, which makes the book a good transition to intermediate readings for binary options.

4. Call or Put: How I Profit Using Binary Options by Dennis Preston

  • Who’s it for? Intermediate traders
  • Price: On sale

This book is created by Dennis Preston, an author whose field is currencies and day trading. Preston is remarkable with his ability to state his points in easy-to-understand language. His book Call or Put concentrates on strategy building and the way Preston achieved success on the binary options market.

This book is suitable for established binary options traders as it gives strategic tips on how to increase the success rate of your binary options strategy. This boom might be what you are missing to reach a consistent profit on an ongoing basis.

5. High Probable Japanese Candlestick Patterns by Theodore Kekstadt

  • Who’s it for? Intermediate traders
  • Price: On sale

Candlestick patterns are an important part of the technical analysis in binary options trading. This is why we introduce you the book High Probable Japanese Candlestick Patterns by Theodore Kekstadt, a veteran trader.

This is a small book that includes illustrations of some of the best candlestick patterns for finding market momentum. These patterns will help you discover more opportunities on the trading chart.

The goal of the book is to let you put the odds in your favor in trading by giving you another perspective in technical analysis. Reading it you will get better in risk management, cutting on drawbacks in your trading style, and increasing your earning potential.

6. Day Trading: Vital Strategies for Intermediate Traders by Brian StClair

  • Who’s it for? Intermediate traders
  • Price: On sale

This book reveals a higher a way to take binary options, stocks or ETFs.

The author works the book around the strategic part of binary options trading revealing solutions for many tactical issues like how to position your trades in the market and what expiration diapasons to choose.

The book starts with some basics and then it switches to intermediate level topics like:

  • High-level chart patterns
  • The RSI indicator
  • How to avoid common market mistakes

The book ends with some more advanced techniques, which makes it a good transition to the expert level of study.

7. 60 Second Binary Options Sniper: 60 Second Binary Options Sniper by Jack Swift

  • Who’s it for? Advanced traders
  • Price: On sale

The 60 Second Binary Options Sniper is a boom by Jack Swift. The book fits traders with more experience in the binary options market as the strategy it reveals requires a great dose of discipline and persistence.

The book introduces a strategy for binary options with an expiration time of only 60 seconds. This way the author Jack Swift aims for higher profitability as the number of trades will grow dramatically due to the low expiration time.

This book puts on the table a topic that is usually taboo in the area of financial markets and trading – the topic for quick profits. And Jack Swift actually reveals an approach, which lets us think of a quicker way to earn.

8. Advanced Technical Analysis: The Complex Technical Analysis of Assets by Wojciech Jakub Podobas

  • Who’s it for? Advanced traders
  • Price: On sale

This is another book for experienced traders. It is perfect for investors that are looking for ways to expand their technical trend analysis skills.

In this book the author Wojciech Jakub Podobas introduces some indicators that most of the intermediate binary options traders have probably never heard of:

  • General trend indicator
  • Options arbitrage index
  • Personalized moving averages
  • Personalized RSI indicator

The book includes insights about how to add a personal touch to most of the technical indicators that we know for a better adaptation to our personal trading conditions. This is likely to help a trader to understand a trend in a better way.

Notice that this book is not especially for binary options. It is for general technical analysis. Therefore, it also applies for binary options trading.

9. How To Master The Psychology Of Forex & Binary Options Trading: The Definitive Guide To Developing A Winning Trading Mindset by William Allen

  • Who’s it for? Advanced traders
  • Price: On sale

The last book of our choice covers an area that most of the traders totally forget about – the psychological part of trading.

In this book, the author William Allen explains the mass psychology and the frustration of loss in trading. The book continues by gradually switching to individual psychology and data interpretation.

You will learn how your mind affects your decision-making process in trading, which at the same time reflects your performance.

One of the useful features of this book is that it teaches how to identify tilt phases of your mind before they start affecting your estimation in trading. The book teaches how to distinguish conscious actions from habits that we have subconsciously.

The goal of this book is to train your mindset to act the right way in trading without actually thinking about it.

Final Thoughts

Although binary options are a very easy-to-understand trading instrument, they are probably the least understood. The line between trading and gambling is very thin when dealing with binary options. And a lot of people don’t realize when they have stopped trading and have started gambling.

This is why one should take the necessary training and education before jumping into binary options trading. A demo account is a good start to check your preparedness.

If you go through the nine books that we suggested, your expertise will reach new highs in the technical and psychological level – the two most important parts of binary options trading. You will understand that the single trade doesn’t deserve your anger or your joy. You will realize that single trades themselves are just the small mean to reach the big goal – consistent profit on a regular basis.

Looking for more trading books? Check out Benzinga’s picks for the best option trading books, best investing books and best Wall Street books.

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What are Binary Options and How Do They Work?

What is a binary option?

A binary option is a financial instrument based on a simple yes or no question where the payoff is a fixed amount or nothing at all.

This means binary options offer defined risk and clear outcomes on every trade.

Each binary option trade starts with a question – will this market be above this price at this time? If the answer is yes, you can buy the option. If it’s no then you can sell the option.

The price of a binary is always between $0 and $100, and just like in other markets, there is a bid and ask price.

The binary options we offer are always built the same way. Each trade is easy to understand.

If you think about it, binary options reflect the way we think about things in our daily life. Things either happen or they don’t. With a binary option, payouts reflect that and are always all or nothing at expiration. You’ll find we like to keep trading simple.

You can also close a position early to lock in profits or limit losses.

As an active trader, we know you are busy scanning markets each day. You are dealing with complexity all the time. The last thing you need is to be slowed down with more complications and hard to understand details with a brokerage.

When you trade, we know you want to focus on the market and your position, not on a series of unnecessarily complicated products.

So we built an innovative full service exchange to trade binary options that lets you do just that.

How do binary options work?

There are three concepts to learning more about how binary options work; the underlying market, strike price and time to expiration.

Become familiar with those three concepts and you’ll understand the basics of binary options.

Let’s walk through the three parts of each binary option trade:

With binary options the amount you pay is the maximum you can lose. Because of that we say your risk is capped.

Maybe you don’t want to wait until expiration. You can place an order to close your position to limit loss or lock in profit early.

Along with offering clear outcomes and defined risk, we also designed our binary options to work in a way that offers unique leverage that enables opportunities to profit even from small market movements.

1 The first step is to pick the assets or event you want to trade. Each one is based on an underlying market and your trade is based on that underlying markets price movement.

2 Then you want to find a strike price that works for you. The strike is the price level you think the market will be above or below at expiration.

3 When opening a trade you will select an expiration day and time. The expiration is the moment of truth traders live for. This is when trading is over and the value of your binary option is determined.

How risky are binary options?

You always know your binary option risk reward ratio before you enter into a new trade. Your trade is fully paid for up front, which means you will never lose more than you pay. You always know exactly what you have at risk.

Trading also offers the opportunity to profit. Just like you know what you have at risk, you will enter each trade knowing your maximum potential reward.

We’re serious about helping you understand and limit your risk. Our goal is to let you define and understand it clearly and upfront on every trade.

It’s why we’ve worked to design and offer an innovative way to define and cap risk while also providing an affordable way to trade.

You can start with one contract at a time for less than $100, and decide your maximum risk and reward up front when you set up the trade.

Here’s how that works:

If you buy a binary option contract for $30, hoping to have it end at $100, your profit target is $70. This is $100 less your $30 investment. A loss would never be more than $30 no matter how much the market moves.

We think that hard to understand margin requirements, complicated fees and confusing payout structures can make trading riskier than it needs to be.

You can make those things part of your past by trading binary options with us.

How are binary options regulated in the US?

Binary options are legal and available to trade in the US only on a Commodity Futures Trading Commission (CFTC) regulated United States exchange.

We are a full service exchange located in the heart of Chicago’s financial district and we are regulated by the CFTC.

As the leading United States based binary options and spreads exchange, we are proud to say we are designated by the CFTC as a Designated Contract Market and Derivatives Clearing Organization.

What this means for you is we are a well-regulated and leading binary options exchange.

Our role as the leading US based binary options exchange is to match buyers and sellers in a fair, accurate and secure way.

That way you can trade multiple global markets with us from one account knowing your trades are fair and your money is safe.

Binary options trading example.

Let’s walk through a trade on the EUR/USD currency pair.

Here is how the outcomes work at expiration:

  1. If the market is at or below 1.1600 at 3AM ET the seller will get the $100 payout.
  2. But if the market is one tick or more above 1.1600, you get the full payout as the buyer.

If you don’t want to wait until expiration, you can close your position at the current market price. Your profit or loss in that case is the difference between your entry and exit prices.

Each binary option reflects a question. In this case, the question is, will EUR/USD be above 1.16?

We show that as EUR/USD > 1.1600

In this example, the option has 4 hours til expiration and it’s 11pm.

If you think EUR/USD is going to be above $1.16 at 3AM, then you would then buy the binary.

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