Perfect For Beginners!
Free Demo Account!
Free Trading Education!
What is Binary Options?
Binary Options, also known as Digital Options or All-or-Nothing Options, have been available to the public-at-large since 2008. Basically, Binary Options have two possible outcomes: “in the money”- when a specific asset reaches a certain value after the fixed expiry time and “out of the money”- exactly the opposite outcome. Binary Option Trading is a revolutionary way in which traders can achieve high returns within a very short period of time. In case the investment doesn’t expire “in the money”, some brokers give a specific percentage of the cash invested as a refund to the binary option trader. This refund can go as high as 15% of the original investment, so not all is lost if your option expires out of the money.
Is Binary Options a Scam?
Before starting to explain how binaries work, I have to address an important issue: Binary Options have been surrounded by a vibe of Scam right from the start and this makes a lot of people stay away from the industry. Here’s the long story made short: Binary Options are NOT a Scam! But some binary options brokers definitely are. Binaries are a legit trading instrument and cannot be called scam but to trade them, you need a brokerage and unfortunately, among these brokerages, there are a lot of scammers. This doesn’t mean that binary options are a scam, however, it does mean you must be extra careful with whom you are doing business with. Once you’re done reading this article, go over the how to avoid binary options scams guide.
Think about this: a guy sells you a fake iPhone, saying it’s the real deal. After a while, you realize you’ve just bought a fake and you’ve paid full price. Does that make Apple a scam. NO! If someone sells you 14 karat Gold and claims it’s 22 karats, does that make Gold a scam. See where I’m going? Binary options are not a scam, but some of the websites that offer them are scams. Open your eyes when reaching for the wallet.
How does Binary Options Work?
I’ll try two different explanations; the first will be broader for those of us who don’t really understand what Binary Options are all about. Plus, a video below.
The Binary Options trader uses a wide range of assets, from Forex to Stocks, Indices and Commodities. These are commonly referred to as underlying assets because the value of the option is derived from their value, making underlying assets the backbone of binary option trading and we win or lose out on binary trades based on the movement of these underlying assets. Basically, a trader speculates that the price of X asset will be above or below the opening level at expiry time and if he is right, he will receive a specific, prearranged profit. Let’s say, I speculate Google will be above X value within one hour (X is the opening price level of Google), I will put my money on the Call Option (in contrast to the Put Option – when I speculate that the asset price will be below X value). If the Google stock is just one point above X value when my option expires, one could generate up to 85% profit from the investment. Many brokers will refund up to 15% of the investment loss in case I was wrong in my speculation.
Nowadays, with the Binary Options market growing rapidly, traders have many more trading options, such as Boundary Options, Touch Options, Up/Down, and the more recent type of fast trading called 60 Seconds trading where all options expire after one minute, so you could potentially increase your account balance almost faster than you can say “I love Binary Options Trading”. Each category of options is slightly different from the others in terms of its properties. Our readers can find more information about the different trading tools and options, by having a glance at our binary options glossary.
How are Binary Options Traded? Simple Explanation
David is the average trader. He keeps track of many American and Far Eastern markets. He checks out the live, online financial news; sometimes he even reads financial magazines. Today, David was checking out Reuters when he saw something about a rush for gold in India. Immediately, David checked with his favorite Binary Options broker, and started looking at the gold charts over the past few hours. The gold value was 1733.01 points. David speculated that in exactly one hour the gold value will exceed 1733.55 points, and so he decided to invest $100 for the option to gain 75% return from his investment. David checked the Call Option, and then started biting his nails. After 45 minutes, the gold value was still less than 1733.55 points, but David had faith in his choice. Two minutes before expiry time the numbers were still not so good for David. Egad! After exactly one hour, the gold value reached 1733.62 points. “Bingo!” David shouted while checking his account balance, which was now $75 higher. In case David was wrong and the gold value was lower than the expected value, he would have received up to 15% return from his losses, so his choice wouldn’t have been a complete loss.
How to Trade Binary Options in 3 Simple Steps
Although the explanation above is pretty straightforward, I want to make sure that everyone understands how easy it is to place a binary options trade, so I will use a visual representation – yea, pictures:
Step 1: Pick an Asset
All brokers will display the available assets in an easy to access and easy to see list. It may be placed to the right, or to the left, but you will definitely see it. In this case it is to the right.
Step 2: Choose Direction (Call or Put)
Once you’ve decided what you are going to trade, it’s time to decide if the price of that asset will be higher or lower at expiration time, compared with current price. Look at the blue line on the chart – that represents current price (of course it looks different on other platforms but it’s very easy to identify). If you think the asset price will be above (higher), you will choose Call and if you think it’s going to be below it (lower), you will choose Put. Remember, Call is for above, Put is for below.
Step 3: Choose Expiration and Investment Amount
Now that you’ve decided on direction, you have to choose an expiration time. These are usually preset by the broker so you will only be able to pick from a given list of expiries. In our example we are trading Short Term options so we can pick between 30 seconds, 1 minute, 2 minutes, 3 minutes or 5 minutes. In other words, we have to answer the question “Will my asset be higher or lower than current price after 30 seconds, or 1 minute, or 2 minutes (etc.)?” When the 30 seconds (or whatever expiration we have chosen) have passed, we will know the outcome: if price is higher and we’ve chosen Call, we win. If price is lower and we’ve chosen Put, we win. Any other scenario means we lost the investment but, as stated above, some brokers offer a refund of up to 15% even if your trade wasn’t successful. Next you have to choose how much you want to invest on the trade. This depends on your money management rules, your skill as a trader and how much “trust” you have in the trade. Picture coming up:
Step 3.1 – Open Trade
Some brokers let you choose Call or Put, expiration, investment amount and have a separate button to open the actual trade that activates only when all parameters are set. On other platforms (this is the case in our example), once you click Call or Put the trade will be opened automatically. If you are trading on such a platform, make sure you set everything up before hitting Call or Put.
Perfect For Beginners!
Free Demo Account!
Free Trading Education!
Where Can I Trade Binary Options?
To trade binary options you will need to open an account with a brokerage. Since 2008 when binary options became available to the large public, brokers have started to appear and they never stopped. Nowadays, literally hundreds of such brokers are operating and just waiting for you to open an account. Registration is free of charge and all you have to pay is some bank transaction fees (in some cases) and of course, the money you want to invest. Be careful though because not all of these brokers are trustworthy. We recommend you choose one of our Recommended Brokers or at least a regulated one. Also, before you venture into the binary options industry we advise you to read our articles on How To Choose Your Binary Options Broker and Binary Options Regulation – Everything You Need To Know.
When Can I Trade Binary Options?
Some markets are open for the entire 24 hours, 5 days out of 7 (the currency market is a great example) so you can trade whenever you feel like it, no matter the time zone you live in. However, stocks and indices have specific times when their markets are open so you will have to check with your broker to see what those times are. To make the story short, you can trade whenever the respective market is open
Who Trades Binary Options?
Newcomers to trading, ex FX traders, gamblers. Anyone can trade binary options. It’s not a discriminatory industry, meaning that you don’t have to have some special training or degree or stuff like that. If you are a plumber and today you decide you want to trade binary options, you can do it by tomorrow (or even the same day if you move fast). However, I wouldn’t recommend such a move because – just like almost everything else – binary options trading needs training. It’s better to spend some time educating yourself and then invest money, not the other way around. It’s all about training and because we know that, we’ve put together a huge Binary Options School – Free, of course!
Why Trading Binary Options?
Firstly, I would like to state strongly – Binary Options are based on speculation. Nothing is for sure and winning is a possibility not a certainty. Nevertheless, Binary Options trading definitely adds an extra dimension to speculation because there are so many trading tools and trading options that it is quite possible that one could make a correct speculation. Binary Options trading is mainly based on research and a certain amount of knowledge (about the markets and assets), but it is also strongly based on risk management. What I’m saying is that one is not required to become a Forex market guru to trade Binary Options, but he needs to be knowledgeable, alert and aware. To begin with, Binary Options require only a small level of investment but give a very rewarding level of return. Online platforms have made the trading of Binary Options easier because any trader across the globe can trade Binary Options and receive the needed information for trading. Making a few smart and profitable investments while losing some other minor investments could generate high profits in a short amount of time. Binary Options trading is breathtaking, profitable and fun. As the Binary Options industry is growing, trading has become more popular and far more advanced. Always keep in mind, however, the road for high profits starts with a trusted Binary Options Broker that fits your needs as a trader.
How To Win In Binary Options
Before we can discuss winning in binary options and applying the recommended steps outlined below, we need to establish the type of binary options traders out there.
Before you start conjuring up images of speedboats, palm trees and Miami, let me inform you that winning consistently in binary options is not easy. It requires careful optimization of your odds.
To understand this better, let’s look at a case study of Don Johnson, a professional Blackjack player who beat the casinos for millions on numerous occasions. He now works as a consultant to casinos all over the world.
Basically, he was able to beat the biggest casinos in Las Vegas because he found a way to increase his odds by meticulous planning and almost scientific attention to details of each deal.
How is this relevant to binary options and trading, you may ask. Trading is also a numbers game. One really needs to understand the numbers of potential risk and profit in order to build a winning trading strategy that can produce consistent profits.
For example, there is a big difference in numbers and profits when you win 75% of the time and when you win 80% of the time.
It’s all about understanding your risk exposure and profit potential and optimizing the conditions of your trades to achieve better results and stay on the winning side.
Just like Don would carefully study the casinos and the options offered by them, a binary options trader should study the brokers to see which broker will offer the best odds.
In addition, a binary options trader must look at trading strategies that minimize losses and gradually increase trading profits.
Depending on your broker set up, on average you need to have a trading strategy that gives you at least 60% of wins in order to make money in binary options.
What works for some users may not necessarily work for others. Moreover, not everyone will be committed to do what it takes to win because motivation and character play a big role in that.
So let’s first meet the people who play binary options, as they can be clearly divided into specific groups based on their desires, motivation, available free time, and patience.
Types of the most common binary options traders
What works for some users may not necessarily work for others. Moreover, not everyone will be committed to do what it takes to win because motivation and character play a big role in that.
So let’s first meet the people who trade binary options who are not professional traders or trade for a living. We can assume that professional traders know how to use binary options effectively to enhance and diversify their investment portfolios. However, with the exception of few countries, binary options is generally open to all members of the public who are of legal age and have some money to invest or play with.
The most common types of non-professional traders can be clearly divided into specific groups based on their desires, motivation, available free time, and patience.
Jack – The Gambler who just wants to gamble
Meet Jack with a gambling personality. He loves the odds of binary options and the rush from 60-second trades online. Jack trades by looking at the tick chart provided by his broker and his gut feeling. He doesn’t do technical or fundamental analysis but he just believes in his luck and intuition. Sure, it landed him in trouble before, but when he is on a winning streak he can make it all back and then some. He approaches binary options like a roulette table in a casino. ‘One must dream big’, he often says.
ADVICE TO JACK – Take all your winnings and run. The longer you play the more you will lose because the odds in binary options are in favor of your broker. If you are in profit than you’ve already won. Now it’s the perfect time to stop.
Lucy – The Bonus Taker who gave it a shot
Meet Lucy who was initially very interested in binary options and has invested some of her money on trades as advised by her broker on the phone. Unfortunately she lost half of her investment already and is now desperate to win in back. Lucy also accepted the bonus offer from her broker and her account is now locked until she makes more trades. She is much smarter with her money than the reckless gambler and she understands that there is more to binary options trading than meets the eye. However, she is still at a university completing her degree and has no time to learn trading now. She is worried that she will lose her money completely if she continues to trade herself.
ADVICE TO LUCY – At this stage your best option is to use a professional signal service and copy the trades of professional traders. Yes, it is a paid service but it will at least allow you to compete at a level where you can actually start winning. Compare binary options signals here. If you don’t have time to learn and to practice trading now, using professional signals is your best option.
Dennis – The Trader with a goal to win
Meet Dennis who found out about binary options and got really excited about this new investment opportunity. Unlike Jack or Lucy he does not jump in to start trading immediately. He first opens a free demo account and places some trades. However he quickly understands that trading binary options is not a game and needs a serious approach. Dennis knows that he needs to learn to trade if he wants to keep winning and that he can not rely on everything his broker tells him. He read a lot of sad stories of people who quickly drained their trading accounts by paying heed to their broker’s suggestions and he is smart enough not to make the same mistakes they did. Dennis understands that he needs to have an edge over his broker in order to win in binary options and be profitable.
ADVICE TO DENNIS – Although Dennis is new to trading he quickly grasped that it is much more difficult and challenging that he initially thought. The advice to Dennis is to try to learn directly from a professional trader or other reputable sources and to practice as much as possible before trading on a live account.
Ilona – The News Trader
Meet Ilona who is a very clever binary options trader. She works as a secretary for a mining company and follows world affairs very closely. Ilona knows the mining industry quite well and trades binary options on news and recommendations she hears in the office or the press. She understands the connections between certain current affairs and the prices of commodities. She finds binary options platforms very easy to use and convenient. Ilona trades commodities like Gold, Silver, and Copper but only when she is quite certain of the outcome. Most of her trades are entered via a mobile application and last a few days. She usually wins but suffers an occasional loss too.
ADVICE TO ILONA – As a professional directly involved in the commodity market she has very good access to information and she uses that to her advantage. This edge helps her to beat the broker and make a profit in binary options. Although Ilona’s system has value she could benefit from confirming her trades with technical analysis. However this requires more time and additional set of skills to learn.
There may be other types of binary options traders yet these four types of people generally sum it up. Although some of them may win a few times, all of them will benefit from the following advice.
How to Trade to Win
About 90% of traders lose. Trading is not easy and there is much more to it than placing trades. A lot of trading is psychological but it is also about optimising your odds and controlling your risk exposure.
Below are the steps that should be followed before committing to trade binary options online. More importantly they should be followed by anyone who is serious about winning.
Understand how binary options work
This may sound very obvious but many people trade binary options without actually fully understanding how they work.
In a common scenario of 80% payout to a 100% loss you need to win 55.55% of the time to break even .
If you lose your trade than you lose 100% of your traded amount.
The good thing about binary options is that the rules are clearly defined right from the outset and it is impossible to lose more than your traded amount.
This is different from Forex or stock trading where due to slippage or huge sudden price changes, the trader, if not protected by the broker, can actually lose a lot more than the traded amount.
In binary options however, the brokers are the market makers and they set the odds to their advantage, similarly to a casino.
Open a demo account with a regulated broker
Trading with a regulated broker is much safer and more secure, but the broker needs to be regulated in the country of your legal residence. If you’re in the USA your only option is Nadex exchange. Instead of using an unregulated and dodgy binary options broker that might steal your money, use a long-established and fully regulated CFD broker, such as EasyMarkets. For more information about brokers please read our guide on how to choose a broker.
Always, always practice your trading on a demo account. Not only will this improve your strategy, timing, and platform experience, it will also prepare you psychologically for the real thing.
Practice your best trading strategy on a demo as long as it takes until you become profitable (in theory at least) Our advice is not to trade on a live account until you’ve grown your demo account by at least 100% making at least 100 trades using your tested strategy.
If you can accomplish this with your strategy you might be ready for the real thing, but make sure that your broker is regulated.
Trading with a regulated broker is much safer and more secure, but the broker needs to be regulated in the country of your legal residence. If you’re in the USA your only option is Nadex exchange.
Instead of using an unregulated and dodgy binary options broker that might steal your money, use a long-established and fully regulated binary options of CFD broker, such as Binary.com or EasyMarkets.
Familiarize yourself with your broker’s trading platform
Once you open a demo account familiarize yourself with the trading platform and all of its functionalities. Make various trades on a demo to see how the platform behaves and how it performs. Also read your broker’s rules and conditions for withdrawal before you make any deposits and begin to trade.
BONUS OFFERS – If you decide to accept a bonus offer for your initial deposit understand that there will be certain limitations imposed on your account, such as minimum amount of trades before your first withdrawal.
Choose an appropriate trading strategy
In order to win at binary options you must follow a trading strategy. You will not win by guessing. Your strategy could be based on technical analysis (charts) or/and fundamental analysis (news).
There are many trading strategies available but unfortunately what works for some may not work for others. You can view examples of some strategies by looking at our Free trading strategies section. The strategy you choose should take into account your time availability, experience and your skill level.
Use professional charts for technical analysis
Your broker will most likely offer online charts but many traders prefer to use third-party superior charting software for technical analysis. These include free platforms such as MetaTrader or ThinkorSwim .
Using better charting software will allow you to be a better trader. One of the greatest advantages is that you can add indicators and draw your analysis to your charts and it will stay there until your remove it from your charts. Your broker’s charts do not offer this type of flexibility.
All professional traders use dedicated charting software because it is more reliable and it gives them more information and better tools for analysis.
You may find that in order to run those professional charting programs you will require to update your computer, or get a dedicated computer for trading.
Practice your strategy and signals on a demo account first
In order to become confident and test your trading strategy use a binary options demo account. Only proceed to trading on a real live account if you’re winning on a demo account! Otherwise do not proceed to trade with real money.
In addition to trading on a demo account every serious trader should keep a trading journal in which all taken trades are clearly registered, including the reasons for taking the trades and their results. This should be done with utmost care so that it can form a basis for your trading on a live account. If you choose to subscribe to professional binary options signals you should first test them on a demo account to see how and if they work.
Understand risk management/exposure
All professional traders will agree that risk management is the most important aspect of trading. It is also the main reason why even good traders can actually lose money and ultimately fail.
Risk management should be studied on its own but for the purpose of this brief guide, it must be said that you should never trade more on each position than 5% of your investment capital. Many professional traders use 1% or 2% for each position.
If you deposit $1000 into your broker’s account, the maximum amount you should place on a trade is $50, which is 5% of 1000. We use percentage to indicate the trade amount as it is a relative number and should be adjusted with your capital.
If your investment capital increases to $10,000 the maximum amount for each trade could be adjusted to $500. Subversively, if you account decreases to $500 the maximum amount put on each trade should not exceed $25. To learn more about the subject read Risk Management 101.
Create and follow your trading plan
In order to win consistently one should create and follow a trading plan. The plan is basically your trading manual which is custom prepared for you, and only you. Your trading plan should include your strategy, your goals and expectations, and clearly defined rules of behavior. The good trading plan will help you to become a disciplined and a profitable trader.
Before you venture into the world of binary options trading please remember that it can be risky to your capital. Simply put, do not trade what you can’t afford to lose.
Compare binary options signals
Trading and/or betting on financial markets is mostly a numbers game, but it also requires a lot of discipline, patience, and self control.
If you are not a trader or simply don’t have the time to do your own technical analysis, your best alternative is to use professional trading signals that will help you win in binary options.
To find the right binary options trading signal or strategy, please refer to our free online guide about binary options signals. This guide also contains reviews and a comparison of winning binary option traders and professional signal providers.
Why The Most Popular Strategies for Binary Options Are Not Successful?
As with anything in life, it’s best to have a plan and prepare for what lies ahead. If it’s running a marathon, you run consistently to build up stamina. Should you want to buy a nice car, you build a plan to afford the vehicle. With trading, the same philosophy applies and that is without practice and a plan, you are positioning yourself for failure. Trading has this get rich quick look to it with flashy profits and the benefits that go along. What many fail to realize is that it takes many hours of planning and hours of practice and experience to reach successful levels.
Binary options have been on the rise as they not only offer an affordable way to access the market, but they offer quick binary options contracts, some that only last 60 seconds. Most options strategies that are free and offer winning strategies are in fact the opposite, simply wanting your money. When starting to trade options, you need to identify your plans and objectives, building a foundation for you to continue growing off of.
Why 60-Second Binary’s Don’t Work
One of the popular binary option products out there is the 60-second binary option. These take 60 seconds to settle and offer quick returns. Individuals tend to ignore the risk and simply see the ability to make money in 60-seconds. Certainly you can make money in those 60-seconds but you can also lose your money in those 60-seconds.
The main benefit of these binary options is it does allow you to enter and profit from quick moves in the market. Certainly there are some individuals that can execute well in this environment, but 99% of individuals are simply gambling with their money using these products.
Drawbacks certainly out weigh the benefits using this product because 60-second binary options can quickly eat through your balance should you continue to lose trades in a consecutive manner. Quickly depleting your balance can entice panic, which ultimately leads to poor trading styles. Another reason this product and strategy is unprofitable for many is because it is littered with free trading strategies and is heavily advertised and a way to generate returns quickly. It is possibly to generate a return using 60-second binaries but many attempt trading these products with limited training.
Why 5-Minute Binary Options Don’t Work
Similar to the 60-second binary option strategy, there are the popular 5-minute binary options. Again, the idea with the 5-minute binaries like that of the 60-second are it allows you to enter and exit position relatively quickly, leading to quicker potential returns. With 60-second binaries there are very few strategies due to the small time frame. However, with the 5-minue binary, these were and still are arguably the most popular strategy.
Some of the typical strategies include moving averages, stochastic indicators, and RSI indicators that attempt to predict market entry and exit points. While these can be profitable, there are many companies and products out on the market that offer ‘free’ trading strategies. As previously stated, you need to find what strategy works best for you and begin understating your needs.
A main reason this strategy doesn’t work, like the 60-second is the lack of time in the trade. In the grand scheme of a trading week, 5-minutes is not nearly enough time to predict a market move. There’s an old phrase that goes there are many great coin flipping contest players, and this can be applied to 5-minute binary options. Certainly there are people that make money off of these products but again, without the time and energy dedicated to learning the markets, you will likely lose your investments and with 5-minute binaries, lose your balance quickly.
Why the Martingale Strategy Doesn’t Work
A very popular trading philosophy among those in the binary option community is the Martingale strategy. This strategy is essentially the same as doubling down when you lose a trade. For example, if you placed a $10 trade and lost on the position, you would then attempt a $20 trade to trying becoming profitable on the next trade and making up for the lost position.
Taking this a step further, the idea with this strategy is that you are playing on the idea of mean reversion. If you looking at a moving average and the underlying asset is far above or below, mean reversion states it will likely return back to the middle of the price area.
There have been many studies done on this and while there is some validity, it doesn’t make for a very profitable strategy because first, this is assuming you do not go on a losing streak. If you were to lose three or four trades in a row, you can quickly begin depleting your trading account and without a profitable trade, become discouraged. The second reason this doesn’t work is because it can quickly eat up your trading balance. If you have a trade of $10 and it closes out of the money, double it to $20 on the next and that finishes out of the money, the third trade is $40 and that quickly has become $70 dollars invested. While it may work it is more likely to dwindle down your trading balance.
Why Free Trading Strategies Will Lead to Lost Money
One aspect to remember not only in finance but in life is there are no free rides. If you find something that is free in finance, you should be skeptical almost immediately and question what is being sold or given away. While there are genuinely decent products that are free, many of the not so great outweigh the beneficial.
The first reason free trading strategies typically lead to lost money is the lack of understanding of the strategy itself. When implementing a strategy, it’s imperative that you understand what generates the buy and sell signals. The chart may be giving you signals but if it isn’t aligned with your trading strategy or objectives, you many suffer in the long run.
A second reason to avoid a free strategy is anyone can post content and claim it is a free strategy that can make you money. With the growth of technology, anyone can claim they have a free winning strategy, forge statistics, and lead people on a path of failure. Binary options and the community have genuine traders, but many are looking to trade and enter the markets for the wrong reasons.
Lastly, a strategy is typically not a one size fits all and may only work in certain market types and assets. This is something many overlook and think you can take it from one asset to another. In reality, it’s likely the strategy will need to be adjusted for the different markets and without understanding the underlying strategy you won’t know what needs to be adjusted.
How to Win with Binary Options
You may be wondering how an earth you can make money using binary strategies with all of these negative points of view. In the first paragraph, one of the main objectives in learning to trade is know your plan and practice. Just because the product has a bad stigma doesn’t mean it can’t be an effective tool to generate income and wealth.
First is to find a trusted platform and open a demo account, allowing yourself time to get a feel for how binary options work. Jumping head first into the deep may work out, but odds are it will lead you to a path of failure. By opening the demo account, you can begin understanding what fits your needs best and how to begin forming a trading strategy. Instead of using a free trading strategy, build one yourself and learn the underlying workings of that strategy.
Second is to build an education by utilizing some of the free educational section on binary option platforms. You can try to start watching free educational videos offered by platforms such as IQ Option, Binary.com or Olymp Trade. Here, you can begin understanding how certain things work and it avoids getting caught up in the get rich quick schemes. If you find yourself looking at ‘easy ways to million’ information, avoid it because odds are it is a scam.
Lastly, do not begin using any of the popular strategies out there because odds are it is not beneficial to you the trader. Many of the robotraders and products are designed to work against you, leading to a diminished trading account. Instead, look for something not as popular or even begin taking parts of others and building your own trading strategy. Traders are not all the same and everyone has their own objectives. Also, by understanding what goes into your strategy, you can build and adjust, making it your own and fitting your unique needs.
Trading binary options are not a scam but the strategies and products that go with it might be. Take the time to gain a simply working knowledge of what goes into your chosen strategy. From there, avoid the highly volatile products such as 60-second and 5-minute binary options, unless you are extremely confident in what you can do. Lastly, open a demo account and practice, practice, practice. Once you’ve mastered a system, you can sit back, enjoy the progress, and get ready for the next system to continue building your wealth.
How to trade Binary options
Let’s go straight to the point. How to define Binary options using your own words? It is a financial instrument that will have its own price (quote) in the certain time; the new price may be higher or lower that the current one.
For example, now we have price of EUR/USD on the level 1.1179 and in 10 minutes the price will be higher or lower than the stated price (pic 1). In case it goes to 1.1180 means the quote increased.
So this changing to the positive or negative side is the double (or binary) opportunity to earn money (up to 90%) or, unfortunately, to lose it. Meaning the trader has two possible scenarios and he has to make the correct prediction. In case 70% of forecasts are made correctly that means you can trade binary options quite profitably.
The main goal of the trader is to make the correct forecast about the further movement direction and open the appropriate trade by clicking the button and choosing the amount of the trade. If your prediction is correct you have the profit 80-90% in your pocket.
The example of trading platform for the binary options.
Main advantages of options trading
Why Binary options may be interesting both or the beginners and professionals?
In contrast to Forex, options trading is much more fast and dynamic, the trading strategies are quite simple there and you don’t have to make a detailed analysis before setting your trade.
How to choose the Options broker
In case you have decided to try options trading, you need to choose the partner of your trading. There are a lot of companies on the market that offer trading services and the beginner in this field may be lost.
The main features that should be counted:
- The minimum deposit. You can find different options starting from 10 USD or 250 USD. So it’s better to make a correct decision based on your potential.
- The minimum option size. Here you should understand that you can trade with 1 USD or 25 USD. Your choice should be based on your financial stability.
- The maximum profit. This criteria is more or less the same in most companies. We recommend to use those that offer 80-90% from one instrument.
To make your choice easier we offer two kind of companies:
Olymp Trade is a new dawn on the market of binary options. This broker have created a company that meets the highest requirements of clients. In Olymp Trade all the stages of trading are as simple as possible, and the entry threshold is lowered to a record sum — 10 dollars.
The broker of binary options 24option established itself as a leading choice in the binary options market. The broker possesses all modern tools and favorable options for a successful trade. 24option is the regulable broker and meets all standards and requirements of CySec. The broker provides training seminars for beginners and qualified technical support.
As well you can check the rating of Binary options companies and be aware of the whole list of the companies.
There is the useful video below that will show you how to trade binary options and stress the aspects for better understanding of the process.
Other useful information for traders:
Perfect For Beginners!
Free Demo Account!
Free Trading Education!