Trading stocks, Forex and commodities has never been easier since binary options became legal. These simple trades allow people of all skill levels and investment capital to make money in the financial markets. To begin your binary trading journey you must walk through the basic steps that are required to be successful.
Binary Options 101 – The Basics and Fundamentals
Start here & learn the basics.
Study Touch, No Touch, Up & Down and more.
Follow an example trade from start to finish.
Guide to reading a candlestick chart.
Tips to help you win more trades!
Our short list of recommended brokers.
The Simple 7 Step Guide To Making A Trade
- Pick an asset (gold, oil, currency pair etc..)
- Choose a time frame (minutes, hours, days or weeks)
- Choose the amount you want to risk
- Choose “Up Or Down” (call or put)
- Click “Buy” – which initiates the trade
- Watch and wait for the expiration time
- At expiry you either won or lost (chose up or down correctly).
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If the asset goes up and you chose up you win. Winning means getting your risked amount plus the return back as profit. If the asset goes down, you lose. Losing means losing your initial investment, or at least the majority of it. Some brokers offer rebates on losses.
Until recently, trading binary options was something that only the really big boys had access to. Trading houses, banks, wall street firms, etc. However with the latest advances in technologies and trading platforms, digital options are the way to trade of the future.
Trading Currencies, Stocks, Gold and Oil in 2013
It has never been easier to trade stocks, currencies, assets and Forex pairs. In today’s digital age, trading is moving towards binary options as the preferred way to trade at an extremely rapid rate.
By design, binary trading is easy to do. Binaries were created so beginning traders could quickly learn how to place a trade. You do not have to know a pip from a hole in the ground to be able to trade. You just have to choose whether ‘oil is going up or down’. Ready, go!
Your risk is limited. This is huge for beginning traders.
The only amount you can risk on a trade is your initial investment and you know this up front before every placing a trade. Your return is also set in stone as well which is also clearly displayed before making your trade. It does not matter the magnitude of how much your asset went up, just that it went up (assuming of course you picked ‘up’ when making your trade)!
After deciding a few things your trade comes down to two choices, that’s it. Hence the word “binary” meaning one or the other. Whether you are brand new to trading or a seasoned trader, these simple fixed risk contracts are the most evolved way of trading online today. Simple, fast and exciting, digital options offer huge potential returns in exchange for considerable risk.
You can trade almost anything. This is because you are not actually purchasing ownership of the asset. You are just making a bet on which way the asset is going to move. It is easy, and if you can win enough trades, you can make a lot of money. Most of the legit binary options brokers have a very wide selection of contracts you can buy. Choose from a multitude of stocks, indices, currencies, and commodities and with various expiry times from 60 seconds to a month.
Quick Overview & Important Information To Know
- You are not actually purchasing an asset. It is not like a traditional option where at the end of the agreed upon time frame you actually purchase shares of a stock.
- Instead, you are placing a “bet” on which way you think the asset will perform
- You know your exact risk and return up front before making a trade
- You are not concerned about the magnitude of the movement other than getting you above or below the strike price.
- If you have a call option you do not care if the price of the asset finishes a fraction of a percent higher or 10 points higher, as long as it is higher you win and get the full amount of the return
For example, if you are looking at the price of Gold and you think they will go up from the current level over the next fifteen minutes, a call option is your best bet. In this scenario, if gold moves up at the end of the fifteen minutes by as much as only a penny, the binary option you placed is a winning one.
Avoid Binary Option Scams
Binary options in and of themselves are legit and recognized by the CBOE. But because they are so new, it is hard to find one that has been in business for a long time. Go with a site that has a good clientele base and has reasonable payouts for in the money options. The vast majority of brokers are legitimate, but that doesn’t mean they all pay their in the money options the same. Finding a site that will give you the best payouts is a good way to avoid this injustice. After all, why would you want to go through a broker that pays even a percentage point less than another site? 1 percent of your trading capital adds up, there is no reason why you should give up these profits.
If you truly want to get the best value out of your trading capital, you might just have to do business with more than one broker. This will give you the opportunity to take advantage of the best that each site has to offer.
Binary Options Strategies
There are dozens of strategies out there for winning the binary trading game. Unfortunately, many of these purported winning strategies are not actually long term profit makers. The general rule that should be followed is to identify a trend and go with it. Even with this course of action, you will still lose a good deal of the time because assets fluctuate up and down on a daily basis. Even the biggest, fastest climbing stock will have moments where the price drops. This is why it is so tricky.
The reason why you want to go with an existing trend is simply because the odds are slightly higher that the asset’s price will move in that direction rather than change course. You will want to look at the appropriate price charts for whatever type of asset you are trading and make sure that there is a bona fide trend that you can follow.
Knowing when to time a trade is tough so you will want to make sure that you have real-time charting software on your computer. This will help solidify your opinion of where the asset is in its daily, weekly, or monthly oscillation.