Binary options are the types of options that offer investors the opportunity to simply make correct predictions with regards to the movement of the price of an underlying asset, within a specified duration of time, in order to receive a payout.
As the name implies, binary options offer investors only two options in terms of payout.
It is either an investor gets ‘all’ the predetermined amount as pay-out if he predicts correctly, or gets ‘nothing’ at all out of the fixed pay-out if he predicts wrongly.
Binary options are the most popular options in today’s financial market because of the many advantages they have over other traditional options, even those that came into existence before them.
Though binary options are very simple and easy to understand, it is of utmost importance for any investor that is interested in trading them to, first of all, learn how to trade binary options, in order to increase his/her chances of success.
It is of little significance whether you’ve already been trading in the financial market already, or whether you’re a complete novice in the market; although one who is already involved in other forms of trade may have an edge.
How To Trade Binary Options: 3 Critical Steps To Take.
- Select The Best Binary Options Trading Platform.
The first step in trading binary options is selecting a binary options platform to use for the trade.
And while there are plenty of binary options platforms to start with; IQ Options is by far the best one I would recommend you check out.
Their minimum deposit is just $10, with $1 minimum trades.
You also get a free demo account with $10,000 practice money to perfect your trading skills first, before committing any real money.
And you can also trade conveniently from anywhere by using their mobile trading app, which makes it all that much more appealing.
Disclaimer: Trading carries risk. Don't trade with more than you can afford.
So make sure you choose the best binary options trading platform that matches your lifestyle preferences and ability to invest.
Once you have found the best one that suits you, then you can create an account with them to enable you to start trading.
- Choose a Good Asset To Trade In.
The next step is to choose the asset that you wish to trade in.
What's important here is to endeavor to select an asset/s that you have a good understanding and knowledge of.
This is a reason why choosing the best binary options platform is critical.
You need way more tradable assets to choose from and take advantage of than be restricted to a few of less to no interest to you.
With my earlier recommended choice, you get over 150 tradable assets within their platform including cryptocurrencies that you can take advantage of.
- Make a Purchase/Buy-In.
Another step involved in trading binary options is deciding the right time to make a purchase.
An investor may decide to make his purchase within the top of the hour, or day as the case may be.
This choice is also greatly dependent on the platform being used for the trade.
Following the above step, an investor will have to predict the direction that he/she thinks the price of the underlying asset will follow (whether upwards or downwards) by the time the duration given expires.
This step is very important as it determines the outcome option which the investor will get.
Thus, an investor can buy the ‘call option‘ if he feels that the price for the underlying asset will increase (go upward) by the expiry date.
But if he feels that the price will decrease (drop downward) by the expiry date, then he can buy the ‘put option‘.
Once you have decided on the one to buy, all you need to do is click, and then wait for the result.
If your prediction turns out to be correct, then you get a pay-out; but if your prediction turns out to be wrong by the expiry date, then you lose.
Below is a widget to help you put the above into perspective. The green button represents the Call Option, and the Red button the Put Option.
Learning how to trade binary options is very easy.
However, in order to ensure that you make reasonable predictions that will help you keep winning while trading binary options, it is important to always keep yourself abreast of current news about the market.
So, if you haven't done so yet, open a free demo account with $10,000 practice money to start trading binary options with confidence now.
You can also use this software to tell you accurately when to ‘Call‘ and when to ‘Put‘ and increase your win rate.
Disclaimer: Trading carries risk. Don't trade with more than you can afford to lose.
Looking to learn more about binary options? Check out my other articles.