Binary option trading is easy to understand and is an excellent, thrilling and a potential way of investment for both newbie’s and old traders.
Step 1. What is Binary Options?
A binary option, also known as a digital option or an all-or-nothing option, is one where the trader has two positions to decide between: will the value of an asset go up or will it go down over a set period of time. Depending on whether the trader is correct or not, the payout is a predetermined price (60%-87%) or nothing.
Binary option trading typically has a shorter term than traditional investing, sometimes as quick as just 60 seconds or an hour, allowing for repeated trades and successes. Furthermore it enables investors to take advantage of both bull (upwards) and bear (downwards) market trends.
For example, if a trader assumes a position that the value of gold will increase in a given period of time, and is correct, s/he wins a fixed payout. If the value of gold drops however, the trader loses the entire amount of the investment. All you have to do is predict correctly if it’s going up or down. That’s all.
For High/Low instrument type:
Select “High” if you think that the price will be above the current level at the expiry time.
Select “Low” if you think that the price will be below the current level at the expiry time.
If the contract ends at a positive note of the trader’s estimate, then the trader will probably receive 60-170% of his initial investment. That’s a large profit within a short period of time.
Recognize trends – Get familiar with the following pattern on the graphs. The “candles” on the graph represents a period of time equivalent to 5 minutes. Here are the trends that we can detect: Uptrend, Declining trend and Neutral trend.
To recognize trends, use the real-time graphics available Click here to see Live Binary Option Charts.
The only thing that matters is that the price should move in the same direction in which the trader has predicted before the session of trading ends.
The greatest advantage of binary option over the traditional method of Forex trading is that the binary option method keeps everything very simple and easy. If a trader is well-versed with Forex trading, then he won’t find it difficult to adjust to binary options and at the same time, if you consider people who have never ventured in Forex trading, you will realize that they can learn binary options within a few hours and get a firm hold over the basic fundamentals of binary trading. The other benefit is that once you get a firm grip on the basics of binary trading, then you can enter any market like stock, currencies, commodities etc. You can play this game with any underlying asset and earn profits. Binary option is very lucrative and once you have gained experience in this form of trade, trading becomes a pleasurable and fun activity.
Trading itself is simple. Once you’ve opened your account, go to the trading platform. Select the asset you wish to trade, the expiry time, whether the value will go up (Call option) or down (Put option), and then enter the amount you wish to invest. You are in control of your investment at every stage. At the expiry time, the set payout will be automatically added to your account if you traded successfully, or the investment amount deducted if not.
It is normal to lose some of the positions that you open that is why it is important to follow up with this strict rule of investment and should not represent more than 5% of your capital. You can open a binary account with a small deposit of $100 and can invest as little as $10 per trade.
There are several sites to trade binary options some even offer bonus sign ups and have free demos. The sites below have very simple platforms and are the easiest to use for beginners. This is the site where I trade the most and there my earnings grow day after day. You can have more than one account. Having an open account on two or more binary brokers is recommended for serious traders.
Click here to read our Binary Option Broker Reviews which will help you find the right broker and platform.
Binary is very easy to make money. Say you had $1,000 to invest. What would you do? You can choose to open a short term fund with a bank that offers you a guaranteed interest of 1.5% after a period of one year. This means that if you invest your $1000 with the bank then after a year you can get $1,015, which you profit $15. Not much of a profit for a year investment right?
Now take this same example and imagine that the bank told you that they offer you a great investment option where the banks offers you up to 85% profits on your investment, subject to market conditions, within a period of 1 hour meaning if you predict up or down correct you will profit $1,850 in 1 hour.
Going by the above example, Binary options trading is where you trade on a binary options provider who offers you a fixed payout, expiry time and the minimum amount to invest. There is nothing complicated about this. You don’t actually buy stocks or currency pairs, you only speculate on them.
“The higher you risk, the bigger the profits, lesser you risk, smaller the profits”
Click here to find the right binary option account. And get started.
If you still want to learn a bit more get our Binary Option Trading Guide here.
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