What are Binary Options?
Binary option is relatively new financial instrument. Let us try to explain what it is and how to put it to usage for profit.
In spite of the same name, binary options have very little in common with the traditional exchange instruments – the usual options (also called "vanilla"). In essence, the general properties are only two:
- In both cases you are risking your money.
- In both cases there in the title is the word "options".
Here all similarities end and begin differences.
The word "binary" means that this option has only two options for completion and each of them brings to the investor a fixed income or a fixed loss, the number of which is known even before the end of the transaction. Many brokers have profit up to 180% investment and loss from 100% to 85% of the investment.
The essence of binary options can be decreased to the following expression: "I hope that by the end of the next day (month, hour, 30 minutes, 15 minutes) the price of my selected assets will be above/below the current level. If guess, I'll gain my pre-agreed with the broker profits. If I am wrong, I will lose the invested funds, but neither more, nor less than what is invested."
The components of a single transaction with the usage of a binary option are extremely simple. However, the brokers suggest greater options of suitable deals to you. Firstly, you can select an asset which will be derived from your binary option. As such an asset can act currency pairs Forex (for example, EURUSD and USDJPY), the action (for example, Apple and Walt Disney), commodities (oil), precious metals and stock indexes (S & P, Dow Jones). Most brokers offer about 60 different assets covering all markets of the world, so that the scope for choice is big enough.
A Choice of a Broker to Trade Binary Options
When deciding for a broker, special attention should be paid to a percentage of payout. At first glance, the difference in the amount of payments from various brokers may not seem significant, but do not underestimate this figure, because in the long run in the end may have an essential influence upon the overall profitability of your trading strategy. If all other parameters are identical, you should choose a broker whose payment is greater.
You should not blindly trust what is written in large print on the front page of the broker. Often in practice the size of payments is less than what was claimed in the advertisement. So do not rush to open a trading account. To start learn trading platform and check the state of payment for the various types of accounts and options.
The platform you are using to trade, its ease and convenience are of great importance in achieving success. What you need less of all is a terminal having a complicated interface that does not let you to timely enter and execute the application. The possibility to quickly create and execute an application is vital for your success and profitability of your trading strategy.
Some trading platforms are too cluttered with unnecessary and totally unnecessary information in the interface that makes navigation in such a program practically impossible. For a comfortable and efficient work you need a well-organized, clean, intuitive interface. Today many brokers offer their users a platform interface which can be changed by the trader in accordance with his personal requirements and preferences.
Leading brokers are capable to suggest hundreds of different assets for your work. However, in the initial stages, it is significant to focus on the development of a few options. In the case of binary options there cannot be a jack of all trades. You can earn much more in the event that will trade a few options that you know best, than you will try to work with dozens of different options about which you know virtually nothing.
Give yourself time to become familiar with the assets provided you with the broker, and choose some of the most understandable and appropriate for you personally. Trying to sell everything can very quickly lead to bankruptcy.
Types of Options
Many brokers with whom you will encounter will suggest you different types of binary options, among which the most popular options are «high / low», «range» and «touch». You will gradually have your personal preference for one or another of their species. Your personal preferences and characteristics of the trading system will have a decisive influence on the choice of those options which you trade.
Deposit and Withdrawal of Funds
You need a broker who can provide you with an opportunity to easily and quickly as possible replenish your trading account and quickly withdraw profits. It is better to avoid brokers that make the transfer of funds unduly confusing and complicated. As a rule, any self-respecting broker has many different ways of account funding and withdrawal options.
Also, you should avoid brokers with a large number of complaints from users about the payments. The company should not give too much time for the transfer of funds, and handling any problems and customer should be immediately addressed and resolved. If the broker has any difficulty with the withdrawal of funds it is a signal that such difficulties may occur again.
Many people underestimate the importance of support services. It is not necessary to repeat this mistake, because quality customer support is a very important component of a successful cooperation with the broker. Most brokers are always ready to provide you with easy access to a team of specialists who tackle your problems. If you want to always have on hand someone well-versed in all aspects of working with binary options, you can call the help desk every time, as soon as there are any difficulties.
Good support is always able to communicate with the client by phone, online chat and they have a set of instructions and responses to solve the most common questions. Make sure that the support staff will be available in the period of time when you want to trade actively.
Are Binary Options for Newcomers?
When talking about binary options, there are absolutely real earnings, and in some cases it is even more than on the Forex or stock trading on the stock exchange.
The main thing is to stick to some simple rules:
- strict adherence to a trading strategy;
- strict compliance with the requirements of money management and trading risks;
- avoidance of emotional trading and trying to "get even" in the event of losses.
By following these simple guidelines, you can easily achieve the desired.
And, of course, never forget to improve, including the financial market, which is often unstable, and always presents unexpected surprises.
On derivatives it is difficult to make money without attachments. You still need money to start getting profit here. The only exception relates to experienced traders who can take someone else's capital asset management and receive profits that are gained by selling borrowed funds of their investors.
At the same time, the trader receives a percentage of the successful management of the investor's account, however, the investor bears the risk of losses as the hopes to get a greater percentage of the invested capital than they can give a conservative investment instruments, such as bank deposits.
Binary Options Strategies
All of nowadays existing trading algorithms are divided into several main categories, which differ in the basic principles of making trading decisions:
- simple strategies;
- indicator algorithms;
- graphic trading system.
All three categories associates one thing – the precise rules. For a better understanding, let us consider them in detail.
Simple trading algorithms are meeting the basic tools, including key market analysis.
They are built on the fundamental principles of pricing and therefore relieve the trader from having to establish additional systems analysis. Among the most popular release:
- rapid breakthrough day;
- strategy of 60 seconds;
- a trend reversal on the top or bottom point of the graph.
All these strategies are primarily designed for beginners. They are simple and convenient to practice, and not require a significant body of knowledge. It is a great option for a profitable start.
The basis of the transaction according to the strategy is the signal, supplied by a technical indicator.
The most common are the following indicator strategies:
- precise entry;
- Index RSI;
- the divergence of the MACD.
Almost every novice trader gives his preference to the indicator system, due to the mistaken belief that this trade is quite simple. In reality it is differently.
To trade profitably using indicators and oscillators, you must have great experience in the making actual transactions, as well as an excellent understanding of the sequence of operation of a particular instrument (technical indicators).
Graphic System Trading
Graphic strategies in trading on the derivatives market are based on a thorough analysis of the price chart. Here the task of the trader is to recognize the emerging chart pattern (a figure which depicts the price on the chart), and use it on time for the benefit of your trading account. Now there are known a lot of graphic patterns, but most tested are: "head and shoulders", Pennant, Wedge and "Three Indians".
All these schemes will help you get stable profit.
Every trader should remember that binary options strategies are not universal for all. Investor picks up the strategy that suits him/her most and which has shown good effectuality. Look for the latest innovations, through binary options strategy reviews and use different binary options strategies.
Binary options basics
Binary Options online only recently become available to a wide range of traders. Once in 2008, the American Stock Exchange and the Chicago Board Options Exchange presented their platforms for trading, binary options have become an exotic in a fairly common type of transactions. Currently, this options are considered to be perhaps the best way to earn money on the stock exchange.
Binary Options - what could be easier?
The popularity of binary options is due not only to their high yield, but also relatively simple to learn. It is known that traders are not born, they become. But if for successful trading on the stock exchange one must possess remarkable knowledge and experience, with binary options it is much simpler.
This, incidentally, applies to the process of trading. The trader selects one of the two options - increase in value of the asset (Call) or fall (Put). In other words, no complex manipulation of graphs, switching different tabs and calculations are needed. At least at the time of the transaction.
Minimal risk and guaranteed income
The essence of binary options trading is to evaluate the profitability of an asset for a specified period of time. If your guess will be correct, you earn. Otherwise, it will lose you money. However, both the amount of losses and profit margins are known in advance. Making a decision about buying or selling an option, a trader knows exactly how much money he is in danger of losing and how many he can earn. This is one of the key differences between binary options and other types of trading, where losses may exceed several times the value of the asset.
Each successful transaction depending on the conditions brings to the trader at least 65% of its amount. In most cases, this threshold is higher, up to 91%.
Quick tenders and quick money
Another important difference - the transience of the transaction. Binary option online are there to buy (or sell) just for a moment, making a short-term forecast. This gives the trader an opportunity to make quick money on a large number of transactions, not even in terms of large sums. Although, of course, too short of a time expiration (time of exercise) brings additional risks.
The low access threshold
If you think that binary options will require significant financial investments, then you are mistaken. In order to be able to trade binary options online, you need not so much. Some brokers provide access to their site for the symbolic sum of $ 10. In any case, even the most well-known brokerage firm will require from the trader no more than $ 250, which he, in fact, will be able to trade. In other words, binary options is really accessible to all, and in this there is no doubt.
Education as the key to success
However, despite the ease and opportunities, at once succeed in binary options trading is hardly possible. As in any other activity without learning a little will happen. The good news is that there are a sufficient number of really competent guides and recommendations for binary options online. A good help will be a free demo account which can be opened in several brokerage companies.
Binary options demo
Demo Account - this is the same as the real account, only virtual money on it. But there is a real price chart, and it is very important.
When you are working with a demo account, you are trading in real time on this market. This allows you to hone skills, learn new strategies to correct your mistakes. Opening a demo account is completely free, and you can use it indefinitely.
Even after you start working with real money, you should not throw your free account away. It will carry out the most daring experiments, without any risk. And only then, when you're confident in the effectiveness of a particular strategy, you can use it to make money.
How to use
Using them is in general not difficult. It is enough to find a broker who works with binary options and offers trading on a demo account.
As a rule, all quite large companies provide this capability. For example, 24Option or IQ Option - great starting platform for a novice trader.
To start trading on a virtual account, simply enter your name and email address. Choose which of the platforms and interfaces you like, and start practicing.
When the switch to real money
In fact, this is one of the most pressing issues for traders. So you want to start getting more money! On the other hand, is it too early? However, lingering on a demo account is also not worth it. Therefore, it is desirable to immediately determine the border, on which you can say with a clear conscience that you are ready to go to “freedom”, that is the real trading account.
It is important to understand that the transition can be a disaster, if you are impatient or just because you are bored of training.
To start trading with real money, it is important to pass some "test". Firstly, of course, the advantage of winning trades over unsuccessful. No need to set ourselves the task to win ten or even five times in a row. Even a very good trader after three or four wins has one or two losses, and that's fine. But if in average of ten times you win six or seven, you should think about the real account.
In addition, a demo account is also the practice of your deposit control. Here, things are even simpler. It is important for you to achieve growth of your capital in time. That is, if today you have 100 virtual dollars, in a week there should be more. Not necessarily 200, at least 112 or even 104. If you are a good trader, you'll quickly realize that the most important thing not to lose. A trader who is able to save your money and earn weekly 5-10 dollars is a lot better than the one that earned 100 today, and tomorrow lost 250. As soon as you start trading on a virtual account, all of your management techniques will immediately show. So, the most important thesis is that you don’t need to hunt for an immediate high profit. Start small and you will go a long way.
Binary options signals
What is required for a successful binary options trading? In principle, all the same, that it is necessary for the trader on the stock exchange as a whole. Despite the fact that trading binary options is a simplified format in comparison with the classic version of trade, but the most important for a trader question remains the same. Namely - where the price will go in the near future.
How did it know, and what are the methods to determine the direction of prices?
When you understand well what is happening in the market and why things are going that way, we can say with a high probability that your predictions are correct too. However, to achieve this level of understanding you need to devote a long time for teaching and learning principles of operation of the market, the characteristics of the underlying asset that you are trading, whether it is gold, euros or shares of Apple.
While this work aimed at understanding the laws of the market, many new traders want to have a different source of information to draw conclusions on its basis and make decisions about the purchase options. And one of these sources is paid trade signals, which we'll talk in more detail today.
Paid or free signals?
With regard to differences of paid and free signals, it is impossible to say unequivocally that paid in all cases are better, and free are always worse. The thing that matters is from what source you get them. Therefore, we must first check the effectiveness of the signal, and then make a decision about what it signals, and how you will use it.
What is this trading signal? Of course, it's not some kind of signal coming from nowhere, it is simply signal trading system. Such signals are regularly submitted in each trading system by any trader. For example, if you use lights, the intersection of a few indicator lines on schedule or with each other may just be trading signals that will encourage you to make a purchase of a call option. And if you decide to use another's trade signals trading system, including paid, first, it is desirable to make sure that the system itself is justified.
How to find the right signals
Currently, various proposals for traders, including those pertaining to receiving trade signals, are many. But at the same time, not in all cases these trading signals really help you. In this regard the important task is to find the source of really high-quality trading signals, signals whether paid or free. Well, what you need to be guided in this case, we are just now and face it.
All agencies and virtually all known merchants already have their reputation, and you can easily find detailed information on the Internet about them. If you work with them, then yes, you can already be sure that the signals will be somewhat useful to you. However, if you are not sure of the source signal, it is better not to use them.
Important addition: if you want to subscribe to premium binary options signals, then in most cases the first questions you will be offered several times to get a free signal that you are convinced of its effectiveness, and only then we will speak about the payment. Acquiring paid signals without making sure that they do show a good result is not very profitable.
Binary options tips
Trading platforms not only provide an opportunity to make bids but also publish useful articles and video tutorials on trading binary options for beginners. The advantages of binary options are that the first dollar you can get super-fast - just a few minutes, the same percentage of profit is very high - up to 90%. It is important to remember that the amount of profit is different for different brokers, so for an informed decision it is important to examine multiple trading grounds.
What are the lessons of binary options
It is no secret that some of the new traders are defeated at the the start of trading. Why? The reason will be hidden in the fact that they rely only on their own intuition and luck, considering that for a successful binary options trading novice it is not a necessity to obtain special knowledge. On the training you have to spend extra time and money, so they want to start trading and earning as soon as possible.
The truth is that the financial forecasting is not much different from the "guessing" the correct answer. Losers at the board are those without a minimum knowledge of the tools of trade and market regularities. What do you think, why experienced traders do not make hundreds of transactions throughout the day, and spend the time to study the economic situation and the situation of the asset on the market, and then at the right time make a big bet - and are more likely to receive a prize of a few hundred dollars? The answer lies in training.
Where to study
For those who are interested in binary options, start trading will not be much of a difficulty, since the mechanism is clear even to the beginner who first encountered the concept of trading. Every honest broker is interested in the success of its customers, taking care of the detailed instructions for using the service. An example of this approach is Binex platform on which you can find free binary options trading lessons for beginners, written in plain language. Even reading a few articles can be very useful for itself: for example, information that a newbie will not need to "reinvent the wheel", - you can use ready-made binary options trading strategies for beginners or more experienced traders.
To make sure that reading articles and viewing training videos from the series "binary options for beginners" will not seem like a waste of time, be sure to first test the mechanism in practice. To do this, create an account and make a few trades with a minimum deposit. For all brokers it is different, for example, on the website Binex minimum deposit starts from $ 150. The best way to learn the mechanics of trading novice and not "burn" binary options from the first attachment is a demo account. It can do some training of transactions that, whatever the outcome, will not cost a dime. So, make up your mind, and you can start making money very soon. Last but not least, remember – the more you study, the more profit you can get in the future.
How to make money with binary options?
Today, binary options are one of the most popular tools for trading on the stock exchange, because they help to make a change in value of the asset without the need to purchase it.
This area attracts traders for several reasons:
- rapid earnings (usually an option within the 15 minutes - 1 hour);
- high profitability (in the case of a high percentage of correct prediction profit is guaranteed);
- Low entry threshold and ease of trading (only need to make a prediction on a possible change in value of an asset at a specific period of time);
- availability (to attend only Internet access is required).
Criteria that affect the profitability of trading value
While hearing about the high profitability of trading beginners are interested in how much they can earn on binary options. It is important to note that, despite the visual appeal and ease of trading, there are laws that directly affect the profit margin. The magnitude of earnings depends on criteria such as:
- terms of broker. Each business area has different profit margins. The amount that can be earned on binary options is affected by the type of account, deposit amount, timeframe and conditions of the individual broker;
- trader skills. Earn on binary options is real, if you trade carefully and study the situation, confirming your actions with analysis and forecasts of experts, with the use of auxiliary tools for trading. Thoughtless actions can lead to the fact that a trader will be regularly into the minus;
- the content of the trader's asset portfolio. In fact, earning on the binary options is affected by the number, type and profitability of assets in the portfolio of the trader. An important role is also played by the overall frequency and number of transactions;
- market situation. The economic situation at the time of trading is becoming a key and decisive factor in the matter of earnings in the binary options. It is important that an experienced trader will benefit from any situation, whether it's fast or slow rising or falling value of the asset.
How to make money with binary options?
Asked whether it is possible to make money on the binary options, in any case we will respond positively. However, we should not forget that many factors affect the amount of profit. Some traders can earn tens of thousands of dollars, with a huge amount of time trading and attention, while others are considering bids as a frivolous activity, trading without training and from time to time and as a result of their "ceiling" - a few dollars a week.
To develop, to learn to manage risk and to analyze the market or wait for the results of nowhere, lightly refer to the process - this is a personal choice of the trader. From direct approach the magnitude of earnings depends. Overall, if you are planning on making money with binary options, learning and patience is required. Of course, you can win sometimes with pure luck, but only with consistent approach you can win regularly.
How to trade binary options
With the popularity of binary options, when more and more people, assessing their advantages and prospects, switch to trade options from other activities, trader’s strategies for earning them actively proliferate. New algorithms and schemes of work are there, almost every day, and for the newcomer, it is sometimes quite difficult to find a good strategy that is appropriate to the manner of its trade, assets used and types of options.
The first thing you need to do before selecting a strategy - is to set a trading style, deciding how you intend to work.
Will you be a scalper, which instantly responds to signals and earns the slightest fluctuations of the market, trading options on the turbo? Or will you stick to more relaxed, conservative strategy, which involves working with long-term options, and in-depth analysis of each asset.
If you are not afraid to take risks and wish to receive the maximum profit from binary options - you need Scalping strategies based on indicators, patterns and trading signals. Given that scalpers work on short-term options, in most cases, they need to open the transaction immediately after receipt of the signal, time to think is practically none. We have to fully entrust their strategy and hope that it will not fail.
And if your goal is getting a stable income in the long term and with minimal risk, it is better to opt for the long-term options and strategies for working with them. They are based on a fundamental analysis of assets, trading news and stable trends.
Such strategies are much more reliable, however, they have disadvantages. For example, trading options with long expiration will have to work with large amounts of money because otherwise the game is not worth the candle. Only short term traders can afford to trade in minimum lots, offsetting lower income from them with a large number of transactions. And wait until the close of a long-term option is quite difficult psychologically, because at stake is a lot of your money, and uncertainty is always scary.
So, think, assess your level of training and emotional state, just so you can make the right choice.
Regardless of which of the options you choose, finding good options trading strategy can be done through various internet broker sites where are a lot of proven algorithms and human trafficking for every taste and deposit.
All are located in the public domain, and can use them for free, avoiding common nowadays offers to buy strategy for binary options without clear source.
Summarizing, we can say that a reliable binary options strategy today is tremendously important, because it opens up wide range of prospects for the trader and can lead him to the heights of financial prosperity. For beginners, though, it is better to start your career with a conservative strategy, slowly delving into the essence of options dealing with the indicators and passing on the faster circuits profit.
There are people who are always having second thoughts when it comes to investing money in binary options trading and the reasons for the same are justifiable. Most of them refrain from entering the block with the fear of losing money since they feel that they do not have much knowledge about how it works or they might not have enough time, but would still like to go ahead and invest money. But for the ones who do not have any idea about how online trading platforms work, 24Option is an ideal place to start with.
It was launched way back in 2009 on the Tech Financials platform for trading and was a dedicated online-based operational platform without any supporting software programs which required to be downloaded to the system. Over the course of past 7 years, 24Option has outgrown most of the other binary options for trading and their website is very simple in terms of the interface designed and the functionality. You will come across numerous trading assets on the website related to all the markets in the world and upon discussion with someone knowledgeable with experience, you can win big.
The interface as we revealed is immensely fantastic since the navigation system of the website has been specifically emphasized upon in order to make sure that beginners do not get confused once they visit the site for the first time. And for those who have been trading online for a while, it is very important for the interface to be user-friendly as it eases the trading process remarkably. Let us consider an example where the trading charts of finance along with the live information present on the internet are not hidden after ten pages, so once you click the options which you are interested in, you will notice a small tab popping out right on top of the asset that carries the information which has been collected from third party financial entities such as news agencies and also, general finance charts.
Now, if you have any experience with other binary trading platforms, then you would know that most of the websites emphasize more on long-term trades, but it is the other way round for 24Option. According to this method, a list of all the financial assets is arranged in an orderly manner from the lowest to the longest expiry times as this appeal more to the high-risk options traders who have a chance of earning more. Despite being conservative in the methods of trading, you will definitely be able to find this platform for binary option trading more useful since you have an option of trading on an hourly or daily basis depending upon your choice. 24Option also has a very wide range of valid assets that you can pick from and this number has increased colossally over the course of past few years.
Let’s be fair about this. If you are planning to trade in something that you have an idea about, then you only need to know the returns that you will be getting and the whole process will become much easier for you. But there is a possibility that you might come across obscure commodities as well as stocks, so better have knowledge about what you are investing in before you start regretting your decision.
You will need to understand the binary options trading platform first in order to proceed ahead. Per recommendation, you can check out other platforms and compare them with 24Option in order to realize the differences and then choose accordingly. Once you get to know enough about trading online, contemplate how much money you are willing to shell out as an investment since the returns will be directly proportional to the amount that you make as the investment.
Trading has become a rage over the internet but trading binary options is always a tricky process since you have to pick an appropriate site out of hundreds and thousands of choices depending on the location where you are based. This is the reason why we have decided to review and give you an educated opinion about binary options work for trading based on the locations that are available. Most of the people do not have the time or interest to go through all the details and could put them at risk for not being informed about the ways of trading online. Through this article, we would like to enlighten people regarding progressive and innovative binary options broker such as “IQ Option”.
Way back in 2012, “IQ Option” gained recognition and gradually attracted lots of investors who considered it to be lucrative. Upon checking, you will stumble across plenty of reviews which are in favour of the concept and these are written by people who possibly have traded with this web broker.
The landing pages of the site are quite easy and straightforward to comprehend and the signup process will not take much time either. All you have to do is fill up a form and verify your identity since it is a crucial part of the process. Once you have created your profile after verifying your identity, you will have to make a deposit in order to access the broker and place your respective binary options trades. IQ option has always been said to be similar to the other forms of web brokers and the whole process is quite simple. And this is the part where it attracts more people. The initial deposit does not have to be a colossal amount since you can start with an amount as low as $10 USD. The deposit can also be made in British Pounds depending upon your preference. Now ask yourself whether this is the lowest ever amount that you have been asked to pay in order to trade with a broker online. This allows people to invest their money devoid of their level of income in order to access trade on binary options and get more accustomed to the trends. Usually for trading binary options, the returns seem to be lucrative based on your initial investment.
Web brokers usually offer money-spinning bonuses and this is the reason why most people try out binary options broker. Once you start trading on these sites, you will come across trading milestones which will end up unlocking a bonus that you might not have been expecting. And we all know how it feels to gain a little more than what we expect. Now if you are lucky enough, there is a possibility that you will end up earning 100% of the amount that you deposited initially as a signup bonus.
Ideally, you will have to understand the trading platform first in order to make an investment in it. Gradually, you will realize that the money invested by you in a promising binary options broker will give a good turnout based on the choice that you made and the research you did before investing.
Also, you will notice that despite investing less, you will still manage to earn a signup bonus of approximately 80% of the money that you invest. Thus, if you are still cynical about this, then spare $10 dollars and earn extra money to start trading with binary options broker. And getting more is definitely a better feeling than losing money. Hence, we would like to urge you to go through the website and be sure before you plan to take the next step and invest in trading since less informed ones are always vulnerable of losing money. The more you research, the better money you will gain. The concept is as simple as that and it is all up to the decision which you make.