What are Binary options?

Binary options are a simple way to trade price fluctuations in multiple global markets, but a trader needs to understand the risks and rewards of these often-misunderstood instruments. Binary options are different from traditional options. It is a financial option in which the payoff is either some fixed monetary amount or nothing at all.

The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The cash-or-nothing binary option pays some fixed amount of cash if the option expires in-the-money while the asset-or-nothing pays the value of the underlying security. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and fixed return options (FROs) (on the American Stock Exchange).

How Binary Options Work

Binary options “are based on a simple ‘yes’ or ‘no’ proposition: Will an underlying asset be above a certain price at a certain time?” Trades place wagers as to whether that will or will not happen. If a customer believes the price of a commodity or currency will be above a certain price at a set time, he buys the binary option. If he believes it will be below that price, he sells the option. The price of a binary is always under £100.

On non-regulated platforms, client money is not necessarily kept in a trust account, as required by government financial regulation, and transactions are not monitored by third parties in order to ensure fair play.

Binary Option Trading Example

Trading with Binary Options seems to be very simple. Even without experience it’s possible to understand the basics within a few minutes.

Suppose ‘A’ is at £590 a share and you believe ‘A’ will close at or above £600 this week. You could buy 5 ‘A’ Binary Options for a price of, say, £0.30. The multiplier on the binary options is also 100 so five of these options would cost 5 contracts x £0.30 * 100 multiplier=£150.

If ‘A’ closes at £600 or higher by the expiration date then the binary option is worth £100 so five of these   ‘A’ call options would be worth £500, for a profit of £350. It doesn’t matter if ‘A’ closed at £600 or £ 650, the binary option is still worth £100. If ‘A’ closes at £599.99 or lower, then the option expires worthless.

What is binary trading? How do they work? High risk high return investment

There are seven types of Binary trading Options given as below to choose from:

1. High/Low
2. One Touch/No Touch
3. Boundary/Range
4. 60 Seconds/Short Term
5. Long Term
6. Ladder
7. Pairs

Let’s talk about each of these types of trades in detail.  Binary options is becoming a very exciting world, replete with choices.

High/Low

The most basic type of binary options trade is the High/Low trade.  With this trade, you look at an asset, which might be a stock, currency, commodity, or index, and you are asked the following question:

“Will X asset be trading at a price which is higher or lower than the current price at Y expiry time?” Binary Options Offer A “One Or The Other” Choice.

If you believe the answer is “higher,” you simply pick “High” on your platform (or “Up” or “Call”).  If you believe the answer is “lower,” you then pick “Low” on your platform (or “Down” or “Put”). If you are correct about your assertion and the asset is trading at the level you indicated when the clock runs out, you win your trade.  Otherwise, you lose.

One Touch/No Touch

With One Touch trading, you are looking at a given asset, and you are asked a different question.

“Will A asset reach B trigger point by C expiry time?”

The trigger point may be anywhere on the chart.  Usually the further away the trigger point is from the current price level, the higher your potential payout if you win.  A point which is located nearby is easier to reach, and therefore would pay out less since the risk is lower.  If you say that the asset will touch the trigger point, and it does, anytime within the expiry period, you win your trade and the payout.  If you are wrong, you lose your investment.

Boundary/Range

Boundary trades, also known as Range trades, involve trading in a channel.  One aspect of technical analysis which you will learn when you are studying how to trade is the concept of a channel in which price ranges.  The upper and lower limits are determined by support and resistance.  Price will test these limits and will generally stay inside them, though price will eventually pass these limits and enter into a new range.

What is great about Boundary trading is that it allows you to profit even in flat markets when price is staying relatively stable.  Since you can only profit based on price movements in most trading situations, this is a unique opportunity in the binary options world which you will not discover elsewhere.

60 Seconds/Short Term

60 Second trades have become extremely popular in recent months.  They are now offered as commonly as High/Low and One Touch trades.  Almost every binary options broker out there now offers them.  These types of trades work exactly like standard High/Low trades which I talked about before, except that the action blazes by in just one minute.  The expiry time for 60 Second trades is always one minute.  There is nothing more thrilling than being in a trade with a chance to gain or lose it all that fast.  Some binary options brokers also offer Short Term trades.  These may include 60 Second options, but also options with two- or three-minute expiry times.

Long Term

One of the most exciting types of trades which I have only recently noticed binary options brokers providing is Long Term options.  These options are just the opposite of 60 Second options.  Instead of being designed to last a very short time period, they are designed to unfold over days, weeks, or even months.  You will find a variety of expiry times available.

Ladder

Ladder trading allows you a shot at making partial profits with trades which are likely to encounter significant support and resistance.  Ideally, price will progress along the “ladder” of strike prices and expiry times at the exact rate that you say that it will.  Each time a strike price is reached within the expiry period that you designate, you will receive a partial payout.  Together, these payouts can add up to far more than 100%.

Pairs

With Pairs trading, you are trading the relative performance of two different assets.  For example, let’s take stock in Google and Apple.  Maybe you have been listening to the investor’s calls, and you have good reason to believe that Google will outperform Apple today.  With Pairs trading, you are asked this question:

Are Binary Options Safe?

Like all other investments there is an amount of risk involved in every financial transaction meant for investment or trade which is speculative in nature. Good knowledge and better understanding about the instrument of investment can bring down the risk and maximize the return. Impulsive behavior is prone to increase the risk and one should avoid it. A safe investment can get you a return up to 60 to 90 % depending upon various factors.

How to Compare the Best Trading Platforms?

You will require a software trading platform in order to activate binary options which will allow you to make high quality and informed decisions on each underlying asset that you intend to trade. In addition, such a facility must provide you, as a minimum requirement, with rapid, secured and accurate trade execution, status tracking, important financial information and news together with the ability to allow you to accomplish efficient depositing and withdrawing of your funds.

To achieve such an objective, many binary option brokers have invested millions of dollars in order to create global-beating software platforms that are capable of performing binary options trading with the utmost efficiency and reliability. Following are the factors to consider while making a comparison:

Security: In today’s world of identity theft and computer hackers, first-class security is an absolute must. Rest assured because most of the top brokers have built powerful trading platforms with your data security as a foremost specification.

24/7 support – First-class support services should be available 24 hours, 7 days weekly to ensure that you have the professional backup necessary to enable you to resolve problems quickly and provide any advice you require.

Transparency – As an essential part of its operation, a platform must provide you with records demonstrating complete transparency regarding fees and commissions. You can then confirm that you are not a victim of additional broker fees or hidden commissions.

Variety – Your broker’s binary option trading platform must be able to provide you with a wide selection of asset types in the four main investment categories, which are commodities, currencies, stocks, and indices.

Higher potential profits – Choose a platform that will allow you to open large trading positions using a minimum cash investment by providing a competitive leverage facility.

Quick Profits – Check that the platform supports an extensive selection of expiry times ranging from one minute to one month. A full set of technical trading tools and market data must be available right at your fingertips. From anywhere in the world, you must be able to utilize your broker’s web-based platform to access your account and trade binary options 24 hours a day, 7 days a week.

Demo Accounts

A demo account should be a risk-free, no-obligation way of testing a platform. It can be especially useful for finding out whether the user experience described by the broker is all that it’s cracked up to be. Ideally, you’ll do some homework on the broker before signing up to the demo (checking key areas such as whether it is regulated and whether the payout rates are competitive) to avoid wasting your time on a broker who might have a swish website but less than adequate service. Finally, it’s worth noting that once you’ve signed up to a demo, access to it might be granted for a limited time only. So if you do sign up – don’t forget to make the most of it. The very best demo accounts are free, exactly the same as the real platforms, and not time limited.

Getting Started

Head on over to a broker’s website and the “Try it now” button (or something very similar) will feature prominently. The way most demos work is simple; the broker gives you a set amount of virtual money to play with (£1,000 is a popular figure). You then use this “money” to explore the platform; placing as many or as few trades as you wish. Losses and gains are credited to this virtual, dummy balance. So is it always safe to sign up? At the very least, the process tends to involve submitting your email address and specifying a user name. (That said Ayrex offer a ‘no sign up’ demo account)

• Download on Mobile Devices
• Compare trading platforms without deposits
• Demo trading account should match live platform
• Demo accounts as part of your education
• News and analysis: how does the alerts system stack up?
• Apps
• Free Accounts – Check It Actually Is Free!
• Demo Contests

Educational Material & Resources

There are many online educational resources that offer free guidance on various aspects of Binary Trade. Also, the trader’s website carry a range of information and FAQ’s to answer a majority of questions arising out of fear of losing investments and also related to the safety aspects. Visiting to various sites in a comparative way enriches the knowledge as also emboldens the confidence to undertake risks.

Trading Binaries and Trading options

A detailed account has already been given about above in the beginning and in the later part of this write-up.

Avoiding Scams – What Checks Should You Do?

Now let’s take a look at modern times: ever since Binary Options were introduced to the large public in 2008, scammers made wild promises and people believed them. The reason why so many scammers roam this industry is because it’s easy for regular people to get into Binary Options (you can open an account in minutes), so there are a lot of traders (aka prey).

Beware Of Account Managers and Managed Accounts

As you associate with any broker, you will be offered an account manager who will offer you all the rosy picture like bigger bonus, many happy clients and safe returns etc. Only verified accounts with positive reviews must be dealt with.

Regulation/Benefits of using a regulated broker

If you want to decrease the risk of Scam – you have to deal with regulated brokers. Trading with a broker that is not regulated by a financial authority is very risky. Your broker’s regulation is like your rain umbrella which protects you against scam. In other words, regulation decreases the chances of risk of scam but does not ensures 100% safety.

Don’t Trust Lightly

Before investing in a signal provider, bot/auto-trader or depositing with a broker, it’s wise to read reviews online.

History of Binary

Binary options trading for the average retail trader essentially began with the U.S. Securities and Exchange Commission’s approval for exchange trading of these options in 2008. Since then, it has expanded and spread very rapidly. Binary options had, in fact, existed for many years before 2008, but they were previously available only to large, institutional traders or high net worth individuals through the over-the-counter market. In 2007, the Options Clearing Commission recommended changes in binary options trading that would make them freely available for retail traders, and in 2008, the SEC approved the offering of binary options as a tradeable investment instrument. Shortly thereafter, the Chicago Board Options Exchange (CBOE) and the American Stock Exchange began offering binary options for public trading.

Demand for Digital Trade Grows

The world is more connected than ever, but the nature of its connections has changed in a fundamental way. The amount of cross-border bandwidth that is used has grown 45 times larger since 2005. It is projected to increase by an additional nine times over the next five years as flows of information, searches, communication, video, transactions, and intra company traffic continue to surge.

Some 900 million people have international connections on social media, and 360 million take part in cross-border e-commerce. Digital platforms for both traditional employment and freelance assignments are beginning to create a more global labor market.

Over a decade, all types of flows acting together have raised world GDP by 10.1 percent over what would have resulted in a world without any cross-border flows. This value amounted to some £7.8 trillion in 2014 alone, and data flows account for £2.8 trillion of this impact.

How to Learn Binary Trading

The best way to start a career in binary trading is to get some practice in with a demo trading account. With a demo account, you can practice trading in real time with certain brokers. There is no way to duplicate the experience that comes with real trading.

Demo accounts will differ from broker to broker, and some places do not even offer demo trading. Still, this is an important part of your trading tutelage.

Seminars and Demonstration

There are many organizations that offer seminars and demonstration to beginners and others to educate and develop necessary skills for Binary Option trading. Even some well-known traders offer free seminars to their registered clients.

E-books

• Trading Binary Options: Strategies and Tactics (Bloomberg Financial): Abe Cofnas, Addison Wiggin
• Binary Options: Strategies for Directional and Volatility Trading (Wiley Trading): Alex Nekritin
• com: Binary Betting: An Introductory Guide to Making Money with Binary Bets (9781905641239): John Piper
• Binary Trading Guide For Beginners.

Videos & FAQs

How to trade Binary Options for beginners – Binary Options 101 – https://www.youtube.com/watch?v=XkBWMVtk3wc

60 Second Strategy: Learn how to trade binary options for a profit – https://www.youtube.com/watch?v=pDVKTdPNYKk

Call Options & Put Options Explained Simply In 8 Minutes (How To Trade Options For Beginners) – https://www.youtube.com/watch?v=EfmTWu2yn5Q

FAQs

What Are Binary Options?

A binary option is a contract with the condition of a price rise or fall during the set period. Binary options are also called digital options. The profit is fixed and known at the moment of making a deal. If the option expires in-the-money, the fixed amount known at the moment of purchase is paid.

What is a CALL Option?

A Call option is an option the underlying price of which is expected to rise. If an investor expects the price of the underlying asset to go up, he needs to choose a CALL option.  If the price of the underlying at the expiry time is higher than at the moment of purchase, an investor gets 70% profit no matter how much the price grows, even if it’s just 0.001. If the price is the same as at the moment of purchase, the investor gets back the whole amount of his investment.

What is a PUT Option?

A PUT option is an option the underlying price of which is expected to fall. If an investor expects the price of the underlying to come down, he needs to choose a PUT option. If the price of the underlying at the expiry is lower than at the moment of purchase, 70% profit no matter how much the price falls, even if it’s just 0.001. If the price is the same as at the moment of purchase, the investor gets back the whole amount of his investment.

What is a Minimum Investment?

An investment is an amount of money you spend to buy a binary option.  You can invest in binary options from £10,000 up to 20,000.  Brokers have a minimum investment requirement. As a rule, this is £25.00, and you cannot buy any option if your balance is less. For instance, in AnyOption, the minimum requirement to buy a binary option is £25.00.

How Can I Buy a Binary Option?

First, you need to sign up with the broker’s website and top on your personal account. Then you choose an asset (shares, commodities, indices, currencies).  For instance, you chose to buy Apple shares, you need to choose whether the price will go up or down. If you anticipate rise, you need to click CALL and enter the amount to buy a binary option. Then you set the expiry – from a minute up to a month. If you believe that the price will rise during the next hour, buy the binary option for an hour. Click the confirm button and it’s done.

How Much Money Can I Make With Binary Options?

If your price forecast comes true, you get a fixed profit at a level of 65% up to 71%. Brokers offer different terms and payoffs. For instance, AnyOption broker offers various risk-to- reward ratios and win loss rates.

What if I Make Wrong Forecast?

If you make wrong forecast, and by the time of expiry the price of the binary option doesn’t match your prediction, you will lose the whole amount of the investment. Some brokers do not allow their customers to lose all, and for instance the first binary option broker in the world returns up to 15% of the investment amount in case of loss.

How Much Can I Invest in Binary Options?

Maximum amounts for binary options purchase are about £3,000 to 20,000 USD depending on the broker. You can buy the same binary option as many times as you want. Moreover, you can buy different assets together.

What is an Expiry Level?

An expiry level is the time of termination of a binary option. The expiry level shows the estimated price of the underlying asset at the moment of the contract completion.

For What Period Can I Buy Binary Options?

You can expect the price will rise or fall at a certain moment. You can buy binary options for a minute, 10 minutes, 15 minutes, hour, day, week and month. When buying binary options, you know how much time left till the moment of expiration.

Why Does the Broker Refuse to Show an Underlying Asset?

Binary options can be bought only during trading hours. In the world of the exchange trade there are such periods as the Pacific, Asian, European and American trading sessions.  Therefore, you can buy, for instance, American stock only during the American trading hours.

How Can I Make a Correct Price Forecast?

To earn on binary options trading regularly, you need to make analysis of the underlying assets and their prices. If you want to get an accurate forecast, make technical and fundamental analysis. You can use special strategies as well to watch price action signals which are described in detail on the website.

Beginner’s Guide to Binary

Basics

Binary Option is a type of speculative futures trading in which the return is either a specified amount or nothing at all. Due to this outcome which is dual in nature the term “Binary” is applied. Binary Options can be applied to a broad number of assets including Commodities, Stocks, Indices etc.

The main characteristics of these assets is their fluctuating value which constantly changes during every trading day. It is during this fluctuation an investor either gains on his investments or loses his money depending upon his investment decision.

Binary Options have gained much popularity in recent years due to their simple up/down nature, the low cost required to participate and the increased number of online brokers offering services to the public. They are now more accessible than ever, and provide an incredible opportunity for traders to earn vast profits in as little as 30 seconds.

Trade without understanding runs a high chance of risk and loss. It is not gambling as a fair amount knowledge and experience can put you on a safe seat with good returns.

How to Place a binary trade?

Steps to open a binary trade

1. Sign up for a Binary Options account with a reputed broker.
2. Deposit your funds so you are ready to take advantage of opportunities when they arise. Starting with a small deposit, not more than between £50-£150 is needed but this is up to you.
3. Set up a demo account, this should be extremely easy with the broker to trade in a sandbox mode.
4. Place at least 20 trades in demo mode before making one live trade.  At this stage, your focus is on getting a feel for the trading platform and entering trades correctly, as well as beginning to develop your read on how the market moves and factors that influence movement.
5. Begin placing live trades, not more than £5-£10 dollars per trade.  Remember the goal is not to make a million dollars with one trade, it is to systematically make money over time.  You need to start small in order to trade with a clear head, and to work on your strategy without taking a huge risk at this point.
6. Contact your broker for help in your trading or developing your strategy for trade.

This is a guide to getting started.  For more advanced strategy read online posts and strategy guides. The more you learn with small experiments the higher will be the probability of you making a lot of money. 

Put option and Call option

An option is a generic form of a derivative. There are two main types of options: calls and puts:

Put option

Put option give the investor or holder the right to sell an asset at a specified price. The seller or writer of the put option is obligated to buy the stock at the strike price. Put options can be exercised at any time before the option expires. Investors buy puts if they think the share price of the underlying stock will fall, or sell one if they think it will rise.

Put buyers – those who hold a “long” – put are either speculative buyers looking for leverage or “insurance” buyers who want to protect their long positions in a stock for the period of time covered by the option. Put sellers hold a “short” expecting the market to move upward (or at least stay stable) A worst-case scenario for a put seller is a downward market turn.

The maximum profit is limited to the put premium received and is achieved when the price of the under-layer is at or above the option’s strike price at expiration. The maximum loss is unlimited for an uncovered put writer.

Call option

Call option provide the holder the right (but not the obligation) to purchase an underlying asset at a specified price (the strike price), for a certain period of time. If the stock fails to meet the strike price before the expiration date, the option expires and becomes worthless. Investors buy calls when they think the share price of the underlying security will rise or sell a call if they think it will fall. Selling an option is also referred to as ”writing” an option.

To obtain these rights, the buyer must pay an option premium (price). This is the amount of cash the buyer pays the seller to obtain the right that the option is granting them. The premium is paid when the contract is initiated

Binary option strategies

Binary options strategies can be defined as a set of measures or a plan, that will help traders minimize the risk, get a better overall picture and trade better in long-term. This is what makes binary options trading so much different than gambling: every trader gets an opportunity to execute an analysis and create a solid strategy. It requires little experience.

There is no requirement to have any previous experience in financial trading and with a little time, any skill level can grasp the concept of binary options trading. The basic requirement is to predict the direction in which the price of an asset will take. The price will either increase (call) or fall (put). Successful binary options traders often gain great success utilizing simple methods and strategies.

Never invest your entire capital at one go

What are the strengths of your trading assets, one must know.

Trading Strategies

There are two main reasons for having a trading strategy and sticking to it. The first is that it removes the possibility of you making emotional or irrational decisions and the second reason for having a trading strategy is that it makes it possible to benefit from repetition.

A trading strategy must ensure that your trades are based on logical understanding while also ensuring there is a pattern that can be repeated, analysed, tweaked, and adjusted.

Money Management Strategies

A money management strategy will help you manage your balance so you can get through bad patches and maximize winning streaks.

To illustrate this further, let’s look at an example of someone who doesn’t have a money management strategy. Because of this they invest 10 percent of their balance on a single trade. If that trade loses, they will need a 20 percent gain on their account balance just to break even. If they lose three trades in a row, they will need a 30 percent gain on their account balance just to break even.

You can see how this can easily creep up – a common losing streak of three in a row could see the account balance of that trader drop by 30 percent. When you consider the fact that many losing streaks are much longer than three-in-a-row, you will appreciate how important a money management strategy is.

Trade decision analysis and correction strategies

An analysis and improvement strategy gives you an opportunity of maximizing the good parts of your trading and money management strategies while simultaneously fixing or removing the parts of your strategies that are not working. This helps you become more profitable in the long term, and it helps you adjust to changing market conditions.

Without an analysis of strategy, one will never improve.

Types of Binary Options Strategy

Binary options strategies are all different, but they have three common elements:

1. Creation of a binary option signal and getting an indication of how to trade this signal
2. How much you should trade
3. Improving your strategy

The precise strategy can vary on each step, so there are a huge number of possibilities. The most important part of developing a successful strategy is understanding as much as possible about each element. This will be covered in the next section, starting with the creation of signals.

Step 1 – Creation of Signals

A signal is basically an indication that the price of an asset is about to move in a particular direction. Of course, prices of assets move all the time. What you need is something that predicts that move before it happens. That is what a signal does.

There are two ways that signals are created. The first is to use news events, and the second is to use technical analysis.

Generating signals from news events is probably the most common approach, particularly for new or inexperienced binary options traders. It involves looking at what is happening in the news, such as an announcement by a company, an industry announcement, and the release of government inflation figures. In many simple cases, positive news means prices are likely to rise while negative news is likely to lead to a fall in prices.

The starting point for making this strategy work is knowing what news events to expect and when. This is why you will find economic calendars on most good binary options trading platforms. If you know that a company’s earnings report is due in two days’ time you can plan your analysis and trading activities around this.

Step 2 – How Much One Should Trade

Investing the same amount of money on each trade is just like having no strategy at all. It is the riskiest strategy, as it does not take into account either your overall level of profitability or the amount of money you have in your account. Both of these are essential factors, and ignoring them can result in quickly depleted balances.

Step 3 – Improving Your Strategy

One of the best ways to improve your trading strategy is to analyze your performance using a diary. This is a simple but highly effective concept. You can then look for patterns and trends to see what is working and what isn’t.

This is a particularly effective approach if you are a new trader and are still trying to establish a profitable strategy. A common approach in this scenario is to place trades using both technical analysis signals and news events signals.

Trading Strategy Examples

Let’s now look in more detail at some specific trading strategies. The strategies below are among the most common, but there are others you can use as well. Also, many traders adapt, alter, or combine strategies to suit their objectives, attitude to risk, and trading goals. There has to be a starting point somewhere, and the strategies below are a good place to start your learning about binary options trading strategies.

Before going on, it is important to remember that none of them will be effective if you don’t also combine them with a money management and improvement strategy, as explained above.

Trading the Trends

The price of an asset generally moves according to a trend, i.e. it moves up in price for a period of time or it moves down in price. These price movements are never linear. Instead, they zig-zag, sometimes moving up in price and sometimes moving down, but overall moving in one general direction. As these zig-zag movements are predictable in particular situations, they present an opportunity for binary options trades.

Upward trend – New highs and new lows will generally be higher than previous highs and lows in an upward trend.

Downward trend – New highs and new lows will generally be lower than previous highs and lows in a downward trend.

Remember the point made at the start of this section though – there is no reason why you can’t combine both so you use both approaches at the same time. They are not mutually exclusive.

The most common way to trade trends is by using High / Low options. All binary options trading platforms offer this type of trade. Basically, you trade on whether an asset’s price is going to be higher than it is now after a set period of time (a high option) or lower than it is now (a low option).

A riskier but potentially more lucrative option is to go for a one-touch option. This is another popular binary options trading selection. Instead of simply predicting whether a price will finish higher or lower, you predict whether or not the price will reach a certain point. This is called the target price.

Again, you can use a combination of both to diversify your risk while increasing your chance of making higher profits.

Trading Based on News Events

Trading on assets based on events in the news is one of the more popular styles of trading. The theory is fairly simple. Good news, such as a company reporting profit information that was above analyst expectations, would see the price of that asset go up. Similarly, profit information that was disappointing would see that company’s share price go down. You can make profitable binary options trades in these conditions.

You can adopt specific strategies and approaches to help increase your chances for success. Here are three you can work into your overall binary options strategy:

• Boundary options – This is the strategy to use when you know an asset’s price is going to move, but you are not sure which direction it will go.
• Trading the breakout – The breakout is the period of time immediately following the release of news that impacts the market. In binary options trading, this is a very short period of time – anything from 30 seconds to a few minutes. The theory behind the strategy is that the most significant movements in the price of the asset will occur during this breakout period as traders seek to adjust their positions to take make a profit or limit their exposure to risk. The type of binary options trade you would use in this scenario is a simple High / Low option, but you select a very short expiration time. This is sometimes known as a 60-second option.
• Intelligent High / Low trades – In simple terms, positive news means prices will rise, and negative news means prices will fall.

Using Candlestick Formations

For new traders, this might be the most difficult of the strategies to explain, but it is the easiest to implement and make money from once you understand it.

Using candlesticks as a trading strategy involves recognizing various candlestick formations that you can use to predict an asset’s price movement.

Developing a Binary Options Strategy Without Risking Money

How do you test a strategy without risking your money? After all, how can you find out that a strategy doesn’t work without trying it? If you try a strategy that doesn’t work using your own money, you will lose it. That could result in you going through your available funds before the testing phase ends, leaving you with nothing to trade with.

There is a solution – a binary options demo account. All reputable and good quality brokers and trading platforms offer demo accounts. They let you test the platform, but, crucially, they also let you test your trading strategies using real market conditions. The testing is done using virtual money instead of your own, so there is no real money at risk. Of course, you can’t make any money either, but that is not the point. The point of a demo account is to solidify a binary options strategy that is profitable.

The Strategies

There are several assets to select from in binary options trading. However, the oldest and most effective approach to minimize risks is to focus on a single asset. Trade on those assets that are most familiar to you such as euro-dollar exchange rates. Consistently trading on it will help you to gain familiarity with it and the prediction of the direction of value will become easier. There are two types of strategies explained below that can be of great benefit in binary options trading.

1. Trend Strategy

A basic strategy most adopted by beginners as well as experienced traders. This strategy is often referred to as the bull bear strategy and focuses on monitoring, rising, declining and the flat trend line of the traded asset. If there is a flat trend line and a prediction that the asset price will go up, the No Touch Option is recommended.

2. Pinocchio strategy

This strategy is utilized when the asset price is expected to rise or fall drastically in the opposite direction. If the value is expected to go up, select CALL and if it’s expected to drop, select PUT.

3. Straddle Strategy

This strategy is best applied during market volatility and just before the break of important news related to specific stock or when predictions of analysts seem to be afloat.

4. Risk Reversal Strategy

This strategy is executed by placing CALL and PUT options simultaneously on an individual underlying asset. This is especially beneficial when trading on assets with fluctuating values.

5. Hedging Strategy

This strategy is commonly known as Pairing and most often used along with corporations in binary options traders, investors and traditional stock-exchanges, as a means of protection and to minimize the associated risks. This strategy is executed by placing both Call and Puts on the same asset at the same time.

6. Fundamental Analysis

This approach involves conducting an in-depth review of all of the financial regards of the company. This info should include earnings reports, market share and financial statements.

Are binary options gambling?

Like any other investment there is always an amount is risk involved irrespective of claims made by binary option traders about its safety. Since all the factors affecting the transaction cannot be predicted neither their behaviour, it is always advisable to go through the conceptual fundamentals and start with smaller investments so that in the event of 100% loss, one does not stop further efforts.

Most of the traders are under regulatory system thus ensuring good amount of safety. Also, many traders have developed sophisticated software, indicating various vital details, necessary for safe investment decisions. Thus, unlike gambling where chance has maximum say, here wise decision with good amount of fundamental knowledge will secure not only your investment but maximise your returns too. One should avoid impulsive behaviour otherwise it will prove just like gambling.

We must say that Binary option trade is not gambling

Do Signals work?

What are signals?

Binary options signals are alerts provided to binary traders to help them decide which direction the price of the underlying asset will take. These signals are often created by experienced binary options traders to those investors subscribed to the service.

The signals are provided after a detailed analysis by experts who have carefully studied, analysed and interpreted the financial market as well as the current trends. These experts take the time to process all the necessary information needed to predict a strong, profitable trade.

The signals are then extracted from this expert technical analysis and provided as an opportunity to help traders make more informed decisions and profitable trades with little to no risk involved.

Traders who take advantage of this amazing process are more likely to be able to quickly predict the best possible trade outcomes with just a brief glance at the information provided by the signal services. Thus, they will be able to make an educated decision based on expert advice and analysis.

Even the most inexperienced traders can gather quality information and make profitable trades, without having to have any prior knowledge about the technical and statistical analysis of the binary options market. This means they can spend less time analysing data or learning about trading and more time actually trading and thus earning a decent profit.

Copy Trading

Copy trading enables financial traders in the market to automatically copy positions opened and managed by a prominent investor, in the preview of a mass customer network.

This method unlike other, allows traders to copy specific strategies, copy trading links a portion of the copying trader’s funds to the account of the copied investor.  Any trading action made thenceforth by the copied investor, such as opening a position, assigning Stop Loss and Take Profit orders, or closing a position, are also executed in the copying trader’s account according to the proportion between the copied investor’s account and the copying trader’s allotted copy trading funds.

The copying trader usually retains the ability to disconnect copied trades and manage them themselves. They can also close the copy relationship altogether.

Copy trading has led to the development of a new type of investment portfolio, which some industry insiders call “people-based” portfolios. People-based portfolios differ from traditional investment portfolios in that the investment funds are invested in other investors, rather than traditional market-based instruments.

Robots and Auto trading

Binary Options Automatic Trading Robots are software products that trade instead of you. With auto trading, analysis becomes unnecessary as the advanced software utilizes the knowledge of experts to trade on behalf of traders.

Predicting the direction an asset’s price will take in the future is not easy. It requires the understanding of the fundamental valuation determinants, as well as the technical aspect of trading in case graphs, are used. Due to the fact that it is not always easy to have an overview of all these factors, traders have been looking for a method to improve their results without needing to learn market analysis and gain expert experience first.

The solution appeared with the introduction of first binary options auto trading software. These were clumsy and not always easy to use, so the customer has managed to solve the analysis aspect of trading but in the process lost the main characteristic of binary options – the simplicity of setting everything up and trading. Due to the continuous improvements of the Internet and algorithms for trading, the process of binary options auto trading has become easier and more popular.

What is the minimum deposit

Usually, minimum deposits start with £200, but there are robots that work with brokers supporting lower deposits.

Setting Software Preferences

Since there are various types of binary options robots, it is easy to understand that each of them may be a bit different, however, most of them have some basic settings, like the minimum trade, the maximum amount that can be lost per day, the type and volume of trades made etc. So, customers will in most cases be able to control the portfolio traded even if the binary options robot in question is the most basic one.

Is it worth trying?

The effort to make trading more automated, based on mathematical algorithm. Algorithms are quite advanced and offer faster analysis, and can deliver faster signals for binary options trading.

Advantages of Binaries

Binary option trading is an incredibly interesting topic. It’s also a fairly new way to invest; one that many newcomers are becoming interested in. So, today we’re going to talk about what binary option trading is as well as the advantages and disadvantages of this type of investment.

What Is Binary Option Trading?

Binary options are designed to be a simple investment that can work well over both short and long-term periods. They work a bit different than standard investment vehicles like stocks and bonds. Instead of purchasing a part of a company as you would with stocks, you’re making a prediction if the value of a company or other underlying asset will go up or down. That’s actually the reason binary options are named binary options. Unlike standard investment vehicles, with binary options there are only 2 possible outcomes. Either you end up in the money or out of the money.

Advantages of Trading Binary Options

Trading binary options can be a great experience for investors who take the time to learn the market before investing. With that said, there are several advantages you can count on when trading. Here they are:

• Fast Returns – With most investments, you’ve got to wait months or years to start seeing high levels of profits. When it comes to binary options, it’s possible to see returns in as fast as 60 seconds. As a matter of fact, most binary options traded have expiry times of 1 day or shorter.
• High Returns – One of the most appealing aspects of binary options is the high returns associated with the trades. In most cases, you’ll see return rates at 70% or above; that’s not something you’ll generally see in the stock market.
• It’s A Numbers Game – Based on the average binary options trade, you only have to be right 55% of the time to break even. Keeping this in mind, it’s easy to see that by doing your research and making smart trades, you’ll generally come out ahead. Think about it, have you ever predicted that the price of gold or oil would increase over a period of time? Where you right more than 55% of the time? Chances are you were!

What is ‘Risk Management’

In the financial world, risk management is the process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions. Essentially, risk management occurs any time an investor or fund manager analyses and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given his investment objectives and risk tolerance.

‘Risk Management’

Risk management occurs everywhere in the financial world. It occurs when an investor buys low-risk government bonds over riskier corporate bonds, when a fund manager hedges his currency exposure with currency derivatives and when a bank performs a credit check on an individual before issuing a personal line of credit. Stockbrokers use financial instruments like options and futures, and money managers use strategies like portfolio and investment diversification, in order to mitigate or effectively manage risk.

Administrative Expenses

What are ‘Administrative Expenses’

Administrative expenses are the expenses that an organization incurs not directly tied to a specific function such as manufacturing, production or sales. These expenses are related to the organization as a whole as opposed to an individual department. Salaries of senior executives and costs of general services such as accounting are examples of administrative expenses.

Nature of Administrative Expenses

Administrative expenses are typically fixed in nature as they incurred to be the foundation of business operations. These expenses would exist regardless of the level of sales that occur. Therefore, not many administrative expenses are variable. Because they are fixed, they are often hard to reduce and includes Expense Classification, Cost Reduction Initiative and Tax Considerations.

What is leverage? What is a margin?

When it comes to Forex trading one should take into consideration two extremely vital concepts – the leverage and the margin. This is so, as these concepts could easily cause worries, in case they are not used appropriately. The terms “leverage” and “margin” are related to one and the same idea, but however, in different cases.

What is leverage?

When we refer to leverage, we usually mean the use of borrowed capital in order to expand the potential return of an investment we are intending to make. It favors both the investor and the firm to invest or operate. What is worth noting, however, is that leverage is always related with a higher level of risk. If an investor decides to rely on leverage in order to invest and the investment moves against the investor, his/her losses may appear to be far larger than they would have been, if the investment had not been leveraged. Therefore, it is useful to say that leverage amplifies both profits and losses.

Trader Choice

These are some of the basic questions that you will need to confront before you take the plunge in the world of binary options trading. In this guide for selecting the right broker for your trading activities, we’ve identified various factors that a trader should consider before deciding which broker to trade with:

• Regulations
• Company Capitalization
• Trading Platforms
• Broker Types
• Customer Services

Regulation

In the Forex Market, trading with a regulated broker is often the most important factor when opening a trading account. By the way, some markets or regions are unregulated, meaning you may be better off with an unregulated broker if you are based in those markets.

Company’s Capitalization

Another factor in the selection of a broker is to look at their market capitalization. It is always prudent to ensure that the broker shortlisted by you is well capitalized to minimize the risk of losing all funds if the broker does go bankrupt or if you have placed a big winning trade. When a company is regulated you know that they are well capitalized, they have to have millions of dollars in their accounts to even apply for regulation.

Trading Platforms

There are many types of trading platforms on the market. With binary options, most of them seem to be web-based.

Web Based or Non-Web Based Platform

Mobile Trading

• Assets Offered
• Support Multiple Currencies Trading
• Customer Service
• Secured Trading Environment