Have you been hearing a lot about binary option trading lately?
There’s a good reason for that. Traders everywhere are getting in on the action. Binary options allow you to place trades easily, limit your risk, and maybe earn a ton of money.
Of course, that part is up to you. Your success will reflect how well you can predict the ups and downs of the market.
In this article, let’s take a look at binary trading. Is it a good idea or a risky venture?
The Basics of Binary Option Trading
Binary options trading has taken the world by storm. It is straightforward, opening an account requires minimal funds, and trading can be accomplished with a touch on your keyboard.
To get started, let’s first define binary options.
The word ‘binary’ means something that has two terms. In binary options trading, those choices are ‘Yes’ or ‘No.’ In this kind of trading, you have to select a particular commodity, then predict whether its price will go up or down over a fixed period of time.
If your prediction is true when the deal comes to end, you win and get money, if you fail to forecast it correctly, you lose your investment. It’s that simple.
Binary Option Trading – An Example
Consider this example:
1. You choose to trade on gold, investing $100 as capital
2. Your next step is to choose whether the price of gold will go higher or lower over a specified period of time
3. You choose the time duration in which you feel that the stipulated price will move up or down
4. You make the trade
5. After the chosen time elapses, you win if your prediction was correct; you lose if it isn’t
How Can You Start Trading Binary Options?
You can select to trade on commodities, stocks, currencies, or indices. It is uncomplicated. Simply follow these easy steps and bingo! You’re ready to go!
1. Select a known broker and register for a binary options account.
2. Deposit funds. Start small, until you get the feel of binary options trading.
3. If you wish, you can even set a demo account before you actually start trading. Just place a few bids in that account to observe the market and its volatility before actually placing a bid on live trade. This will give you an idea of how the market works and what factors influence it.
4. Search the web for binary option trading tips. You can have a look and form your strategy for the highest profit perspective. Before trading, it is good to have a look at market sentiment and use technical analysis for maximum benefits.
5. Once confident, you can start placing live trade bids. However, let me repeat again that it is sensible to start at a small scale, making small trades first. This way you can start at the lowest rung of the ladder and make your way up through thoroughly planned strategies, and tactics, not taking a huge risk at once.
You have various types of options to trade on. They are listed below.
1. High / Low options:
This most basic option lets you predict if the market will be higher or lower after a specified period of time.
2. Touch / No touch options:
Here you need to name a target price that the trade has to touch before the deal expires.
3. Boundary options:
Similar to touch options, here instead of choosing only one target price, you select two – one higher than the current market price and one below it. This creates a zone. When the market escapes it, you win.
4. 30 / 60 seconds options:
Same as High / Low options, they have the short finishing time span of 30 or 60 seconds. So it lets you earn big within a small amount of time.
Is binary options trading right for you?
Consider the potential benefits of binary options trading. If these sound good, then chances are you’ll like binary options trading.
Here are some of the reasons why binary options can be a good way to go:
- You don’t need a lot of money
- You can trade any time and any day you wish
- You can trade from anywhere you have an internet connection
- You don’t need a lot of trading experience to get started.
- You can gradually make a profit as you learn the trade and techniques to book profit
- You can potentially earn high returns quickly
- You don’t have to buy the commodity, you only bid on it
- No extra charges or commissions are levied on you.
Ready to get started?
You now have a basic knowledge of binary options trading. Start small. Try and see. It might be something you love.
By the way, want to check out something really cool? You can even trade binary options with the help of a computerized system.
Here’s the scoop: Trading Binary Options with a Robot!
Abel Cane reports on business-related issues. Connect with Abel on Twitter @boomalive.