During the last two years or so, Trading Binary Options have become widely popular. The main reasons behind this are the high profit returns and the easy trading opportunity. Binary Options is now believed to be the way that anyone can utilize to get profit from the price movement in value of a large and dynamic range of currency pairs, commodities, assets, stocks and so on.
To learn Binary option in details, you may visit: Binary Option Trading by Forexing24.
What is Trading Binary Option?
When trading Binary Options, you only have to predict if the price of an asset (for example currency pair or stock) will go up or go down from its present price over a certain period of time.
EUR/USD The current price is 1.30850 and you are thinking that the price will get higher in the next hour. So you decide to place a “Call” option and wait to see where the price goes after 1 hour from now. If your prediction is right you can make a profit of 80% of your investment (depending on your broker’s payout policy).
Why Binary Option?
The reason behind the popularity of these types of financial trades is that the traders have to choose one from only two possible decisions when placing a trade. The options are “yes” or “no” decision, which in Binary Options trading are known as “Put” or “Call” trades.
You don’t need to actually purchase anything; all you need to do is assumptions.
For example: If you wish to start trading Binary Options trade on Gold, you simply need to decide whether the value of gold will rise in value or fall in value over any given time period.
Advantages of Trading Binary Options
The main advantage of Trading Binary Options trades is that, you will find a range of different expiry times available in the market, which can be as short as just 60 seconds or as long as one month or more than that.
TRADING BINARY OPTIONS: STEP-BY-STEP GUIDELINE
Learning process of Trading Binary options is very easy. If you are a newcomer to the world of Binary Options trading, then below you will get a 10 step guideline which will enlighten you on all there is to know about placing Binary Options trades.
We are more confident enough that once you read through the following guideline, you will be then able to start Trading Binary Options with ease and comfort!
Steps 1: Decide What Trades to Place
This is essentially the first decision you need to make, when you are thinking to start trading Binary Options. You need have a good understanding of what currency pairs, asset, commodity or stock exchange wish to select for trading binary options.
After making a wise decision on just which type of asset, commodity or stock exchange you are interested to start trading binary options, you will need to decide just which way you think the value of that trade will move.
Step 2: Choose a Broker Option Broker
This is the most important step in Trading Binary options. You will of course need to select a Binary Options Broker to place your trades at, and with that in mind we would advise you to take some time taking a look through each of our reviewed Binary Options Brokers.
Each Broker we have chosen to showcase on this website is fully licensed and regulated, and each of them offer a very wide range of tradable assets and many of them are also additionally offering new traders a welcome bonus offer which will massively increase the value of your initial deposit.
Each Broker will also have a range of different account types, and it is important that you choose to open an account that will give you access to the maximum benefits and extras based on the level and volume of trades you place.
Ideally consider opening up accounts at each of our featured Brokers, for there will be many benefits of doing so as you will find out in step four.
Step 3: Choose an Expiry Time
If you have chosen the type of asset you wish to base your Binary Options trades around and have decided which broker to trade with, then you next need to decide an expiry time for your trades.
You will find that you can place trades which last for just 60 seconds or can place much longer term trades which will expire in one month. It is important that you select the expiry time you would prefer as there are lots of different events that could affect the value of any financial assets that you place your trades upon.
Step 4: Understanding Potential Gains of trading
Think of a situation when you are considering making a purchase of a large ticket price item, you will always shop around to ensure you get the best deal possible. You should consider the same thing while trading Binary Options, as the financial gains you can make out of every single trade you do decide to place can and often will vary from Broker to Broker.
So your next step should be to take a look at what the potential gains will be on your chosen trades at several of our featured Binary Options Brokers, as by comparing them you will be able to select a Broker offering you the maximum returns on your investment.
Step 5: Analyze Trending Binary Options
Whilst you will have made something of a concerted effort when selecting just which trades are likely to result in a financial gain, you should always make use of all tools at your disposal to ensure the trades you are considering placing will result in a gain.
Whilst many Brokers offer the latest financial news stories which are often found scrolling on their news feeds, some traders also allow you to see which trades are currently popular with other traders.
As such be on the lookout for Brokers which offer some form of Trending Options feature, as by making use of the tool you will be able to easily spot which trades are currently attracting the highest volumes of trades from other real money traders.
Step 6: Increase Your Trading Budget
There are plenty of Binary options broker in the industry now. As a result, there is huge Competition between Binary Options Brokers. This is something you should always keep in mind as a trader, for you will often find you can make use of a range of promotional offers to help you increase the value of your trading budget.
There are different binary option bonus offers from brokers which are very attractive to traders. However, it will be best if you just lookout for loyalty based promotions that many Brokers will offer you. Those loyalty bonuses and promotions can include deposit match bonuses and even risk free trades.
Step 7: Place Trades Instantly
The fact that you can’t deny is that you are never going to know in advance when a potentially profitable trading opportunity will suddenly become available, and that is something you do need to keep in mind.
We would like to advise you to have access to both an online trading account and also a mobile trading account at each Broker you sign up to. By having access to a mobile trading account you will of course be able to place your trades at any time and from anywhere.
Step 8: Hedge Your Trades
Many traders will look into the possibility of hedging any live and active trades they have open or they may place a range of trades on which both sides of the trades are covered in two completely separate trades.
We can recommend an effective way of doing this, all you need to do is to open up accounts at different brokers and make use of their high valued welcome sign up bonuses, and then using those bonus funds to cover each side of a trade.
Step 9: Use Roll Forward Feature
While Trading Binary options, you will find another feature has started to become available at many Binary Options Brokers and this is something known as a Roll Forward feature. This type of additional trading opportunity will only become available to you when you have a live trade placed.
The option of Roll Forward is a way of extending the expiry time on any live trades you have placed, and when you take this option the expiry time will then be extended to the next available one.
Step 10: Properly utilize early exit option
Most of the traders trading binary options will be more than prepared to wait until the expiry time has been achieved on all trades they have placed. But you always have a chance to back off from your decision, if you become aware of any potential events that could see the value of your chosen trades swing in the opposite direction that you have chosen. Under this circumstance, you trades are currently in line for a payout, and then consider taking an early exit.
Nevertheless, you can only ever consider taking an early exit if you are convinced any potential gains you will make once you trade naturally expires are going to become losing trades due to current events that you may have suddenly become aware of.
The Bottom Line: TRADING BINARY OPTIONS
Well, we hope this little article was helpful to make you introduce you with the fact of trading binary options. However, we will highly recommend you to visit our Binary options trading section before putting your first step in trading binary options.
|Chapter 11||Further reading about Forex Trading|
|Lesson 1||full time Forex trader|
|Lesson 2||Forex Trading signals|
|Lesson 3||TRADING BINARY OPTIONS|
|Lesson 4||How to Become an Introducing Broker|