Learn what is binary trading with our introductory binary options guide.
Binary options is solely based on forecasting the rise or fall in the value of a financial asset. The simplicity of trading coupled with high profitability are advantages that attract thousands of people across the globe. Accordingly there is a great number of binary brokers to meet the global demand. The variety of available brokers ensure each investor can find a binary broker suitable to his or her investment needs.
What are binary options?
The first type of binary options you need to know about is the all-or-nothing option. With the all-or-nothing option, you, the investor, chooses one of two scenarios to occur before the investment expires:
The asset price will rise above its initial value
The asset price will fall below its initial price.
If you estimate the price of the underlying asset will rise, you use the all-or-nothing CALL option. Conversely if you estimate the price of the underlying asset will decrease, you use the all-or-nothing PUT option. As you by now understand, price trends are the key to high profits in binary options trading.
In addition to the all-or-nothing call/put options, there are many different trading options. Some of the more popular options include Above/Below (High/Low) and One Touch. The former are more traditional trading options. In One Touch the investors estimates what predetermined value the underlying asset will reach before the investment expires. This is a more complex binary trading option, but pays out the greatest returns.
In order to start investing, the first thing you need to do is choose a financial asset. Next, based on your forecast, acquire the appropriate call or put option. Once you’ve chosen a call or put option, set the amount you want to invest and put an expiration date on the investment. If everything goes according to plan the option will expire in the money i. e. you will earn profit. If the forecast was inaccurate the option closes out of the money. Thus the value of the underlying asset at the options maturity determines success with binary options.
Here’s some more information on financial assets, returns and profitability
The 4 most popular financial assets for options are:
Binary Options
Stock indices
Raw materials and commodities
Foreign Currency
These investments are also known as fixed return options, as the investor will get a percentage of the profits, whether you win or lose (in case of a loss a refund is usually offered generally ranging between 10%-15%). In classic binary option investments you can anticipate a return of 70%-80%. One Touch options however, can return up to 350% or 400% on the investment depending on the binary broker .
In order to succeed with binary options, it is very important you review the ins and outs of financial markets. To do this, you can use the market analyses that are available in virtually all online trading platforms or search the internet and read the market sections of online newspapers. Best investment practice suggests knowing the asset or financial assets for which we are going to invest and be aware of related news that may affect directly or indirectly price trends. Keep in mind at times information can be limited when it comes to investing our money, so be very careful and don’t take investments lightly.
Tips on managing your account.
In addition to being well informed, you should take some time to review investment strategies and tactics to maximize profits.
A tactic sometimes used by traders is to buy both a call as well as a put option at the same time. In certain situations new market insights lead even a seasoned investor to make an investment opposite to his or her earlier forecast. Suppose you invested a put option based on market analysis suggesting a downward trend. However, the price of the asset begins to rise. This is a time to invest in a call option to hedge your losses from the initial investment.
Another strategy used by seasoned investors is to double down on the value of the option. If you trust your analyses, this is another way to increase your profits. But be sure to make sure you have the understanding and experience to use this strategy effectively.
Binary options is great way to invest your money and see returns. The best way to ensure you are making wise decisions is to stay current with market trend analyses. Like any investment, gaining proficiency in the binary option market takes dedication. We recommend the novice investor be patient while gaining fluency in strategy and tactics. If this is your first time reading about binary options, feel free to review the videos, webinars, and other educational materials aggregated on this site.
10 tips to start investing now
Of all the opportunities that exist today in the global financial markets, binary options is one of the easiest and fastest securities for picking up a little extra income at the end of the month. Binary options is the financial market that moves the most money a day worldwide.
You do not need to be a finance maven or a Harvard economist nor do you need to be already wealthy to start trading today. Most binary option brokers will let you open an account with no more than $100-$200.
Binary options trading can bring great benefits whether you choose to invest daily, weekly, monthly or only once a year. This market offers any interested investor huge potential possibility in the short, medium and long terms.
Furthermore, it is not complicated to get started, but you should take the time to review the financial markets.
With that in mind here are my 10 most useful tips for beginning investors.
Choose a binary broker who offers a demo account. Demo accounts are a great tool to use as you begin the learning process. They allow you to learn from your mistakes as you build your investment strategy.
Keep an eye out for trends in the financial world. Being up to date with the economic activity will help sharpen your forecasts.
Invest smartly. Be sure to invest in a measured way to maximize profits.
Analyze markets trends with an asset before you invest. Read the latest financial news, understand how the political landscape influences markets and currencies. Good information will help avoid headaches down the road.
Keep in mind that the greater the reward, the greater the risk. Make sure you understand both the possibility for earnings and losses before making a move. Sometimes the less riskier choice is the better choice.
Choose your binary options broker carefully. We have reviews of several regulated and reliable binary brokers. Take you time and choose the one that you are confident and comfortable with.
Once you carefully selected your binary broker, contact Customer Service. They will help you get started managing your money.
Invest in assets you are familiar with. If you have background in commodities such as oil, you should invest in oil relation financial assets.
Binary options offer a variety of investment options some with higher returns, some with lower returns. Choose the investment option that suits you, and don’t forget: more profit generally means more risk.
Once you’ve decided on a market in which to invest, determine upward or downward trends, when the length of that trend etc. It is helpful to follow online graphics on the asset in questions to stay updated in real time.