Binary options guides
First steps for newcomers in the world of binary options trading
Current article will become a light in the dark for newcomers who want to build their careers in binary options trading. Here everybody will definitely find answers for all questions about trading features and not only. Article contains the main steps and important tips for traders who just start their career in binary options trading world. We hope these notes will become an integral part of your way to success. Here is a short list of all main points which were considered in this article.
- Introduction to binary options trading
- Binary options trading types
- Some useful strategies
- List of important things to remember
- Some trades examples
- Beginning of trades
What is it?
Trading in binary options is not very complicated but it always entails some risk in combination with high income. Two choices exist for trader: up/down or it can also other choices like ‘touch/no touch’. Your own benefit directly depends on your predictions, were they right or wrong. While making trades in binary options each trader is able to make his own prediction. Before starting trades trader choose an asset and then predict will it rise or fall in definite time interval. Before starting trades and make your first deposit you always see how much profit you will earn if your prediction was fully correct. Thus if your decisions were right you will return invested money together with a return which is always near 70-85%. But if prediction was incorrect you lose possible profit together with money that you invested, so certain percentage of risk always exists in such trading and that is the feature which attracts crowds of people in binary options.
Let’s consider an example in order to help you clarify the complete process of trading. Let’s imagine that you chose gold as an asset and made your decision that its cost will fall from the present price which for example equals $1615. Also you must select a time interval. Let it be equal to 60 minutes. Your broker offers to pay a return of 83% from your initial rate and you deposit $100. In one hour time interval comes to the end and gold price fall to $1614-we see that your predictions were completely right! So, you return your invested $100 together with $83 benefit. While trading binary options it doesn’t matter how much an asset will fall down or rise up, because you will definitely get your profit even if it went down or rise up on a tiny value.
Three important components in binary options trading Nowadays a lot of binary options trading platforms exist but these are three main components which necessarily take place in each platform. They are:
1) the expiration time
2) the payout offer
3) the strike price
Let’s consider each of these components:
Expiration time is an interval of time from the moment when you start trading (when you ‘purchase’ the certain option) till it ends. This time may vary from 60 seconds to month. The most common terms among traders are from 1 minute to half an hour.
The payout offer is a clear profit which broker offers to trader after his trade in the case of his winning after making right predictions. These offers may vary from 70 to 85%. Thus if you became a winner you will get a profit equal to 70-85% from your initial investments but there is also a situation when you fail, and then you will receive 0% profit. Payout offer is very important moment to notice before making your investment and working out predictions because it is your net income.
Strike price is some money value which determines will your trade be successful or not. This price gives you an ability to start trades. In the previous example such price was equal to $1615.
Several binary options trading types
Nowadays more and more different trading types appear in binary options platforms and each of type has its own pros and cons. There isn’t any ‘golden type’ which will necessarily bring a permanent income for you. Quite widespread type of binary options trading is type that called “up/down”. Such type was considered in the previous example. It is also known as the easiest type. At the start of your trading career you should learn as much information as it possible for you about various trading types and choose the best type for you among them. Remember that the more peculiarities you will know the higher peaks you will reach in binary options.
Strategies for permanent success
Even if you are only the beginner in the binary options trading you can start to develop your own strategy or to use some among strategies which already exist. Only using specific strategy trader will get really significant and permanent profit. On our website you will find a list of useful binary options strategies which already exist. They will definitely help you to make your choice and achieve high result.
Important things to notice
In this article a list of the most important things and points which will be useful to remember when you just start trading in binary options is prepared. So, before start trading notice that:
- Level of your risk while trading is always limited to amount of your trade.
- There is an established value of the mandatory minimal trade, which is often equals to $10.
- In case of fail you lose your whole deposit of money that you invested before.
- If you want to get permanent profit and make big money in such trading you have to win the majority of your previous trades.
- Up or Down is the only one trading type among great variety of others, don’t be stick to it and try using other types of trading to get success in binary options.
- There is always rather high risk in binary option trades, so be careful and reasonable-don’t invest as much money as you can afford yourself to lose if your predictions were incorrect and no more.
Your possible payoff is clearly installed before the trade, so there isn’t any secret in it – when you start trade you completely familiar with the rules and conditions. If you win binary options trade you will surely get your offered money amount.
Let’s consider the following situation:
On this picture you will see the interface of the usual trading platform for binary options traders. Interface is rather simple, so even beginner can understand it. Payout offer here equals to 72% and after investing certain money amount you should choose Up/Down and click the “apply” button. This example shows us the green line movement. It corresponds to the movement direction of the current gold price in the international market. The red field on the right means the last period of time for which you are allowed to trade this option. After crossing this red section chosen option is closed for trading.
So, if you predict that the price will go up- push the ‘call’ button and if you think that the price will come down-push the ‘put’ button.
Here you see only two variants-two options named ‘binary’. If you were right-you are the winner but if you were wrong-you loser.
The green line which is drawn in this example may correspond not only to gold but also to pair of currency or some another asset. Before starting trades you must choose a certain asset which you want to trade.
In addition to this example we want to remind that you shouldn’t forget about the expiry interval of time in option trading. This is the time period after that you will eventually find out if you are winner or loser in this trade. As it was mentioned above this period of time can vary from 1 minute to even month.
These rules and examples are very simple and intended for newcomers but when you will continue trades in process of time you will notice that a lot of moments of trading aren’t as easy and clear as they seemed before.
Here is one more examples for the best explanation:
At this picture the movement of the Google stocks price in the current financial market is shown:
For better understanding the further direction of the movement of price you may use candlestick chart which is visualized on the picture above.
The following picture shows the screenshot from one trading platform. Broker offers you to win 70% of your initial deposit if your predictions were right. On the picture the deposited amount is equal to $1000. Thus if you were right you will earn $1700 after running of expiration time but if you were wrong you will not lose the whole amount that you invested because this broker offers you 10% if you fail.
So if you decided that Google stocks will rise up and it was right-you win your $1700 profit. If the Google fell down you will get $100 and this is equal to the 10% of your initial money amount. It is rather good because you don’t lose all invested money. On this picture $672.1000 is a strike price, $700 is the payoff value, $100 is the return amount in the case of losing and 15:30 is the expiry date. Be careful, because not every broker always offers such return. You should notice this moment on your trading platform to correctly evaluate all the risk of your trade.
In second example we will speak about oil and its market price but with the trading type which is called “touch trade’. Oil market with its constantly changing prices is one of the best variants for getting easy benefit in trading binary options. It is a good way to earn big money in making trades in binary options.
The type of trading which is named ‘touch trade’ make you a winner and gives benefit if the oil price will reach the point of price which you established by yourself. For instance you invested $200 that the oil price will hit the point of $1519.2 by 5 am today. The payout equal to 80%, so if you will be a winner you get $360 and this sum contains your initial investments and 80% of pure profit. For example you chose the broker which offers 10% return if you lose. In this situation if you weren’t right you get $20 as a losing return and lose not the whole amount of invested money but only 90%. We want to add that very often brokers who offer you some lose returns establish lower payout comparable with other brokers. It depends on you what will better suit you -high payout and high risk or lower payout with less risky situation.
So, you make the investment and set the price which you think an asset (oil) will reach to at 5 am today. At 5 am you notice that you are lucky and oil price rapidly rose up and touched your predicted price at the point of $1519.2. You win your offered $360 as it was set by your broker and get your net profit of $160.
All these examples we may combine in one common example which can serve you as a template for making trades when you are only the beginner. Here it is:
Firstly remember that such trading assets as oil or gold can bring you significant benefit from binary options trades. We collected several steps to make you a successful trader:
- At first thought out what asset you will choose. It is directly influence on the outcome of events. You may make your choice among oil, currency, gold or some other assets.
- Then you choose the expiry time interval. This choice fully depends on your tastes. Somebody likes short time periods equals to 60 seconds and somebody likes to wait for a long period until the chosen option closes. Pick up the most convenient period for you and be stick to it.
- After you have to make the investment. Read carefully what money amount is minimal at your broker’s trading platform and invest the same amount or greater if you are sure in winning. Your money amount at trading platform may reach hundreds of thousands dollars but be careful and reasonable when bet such big value of money.
- After making a decision about invested sum you must work out a decision about further price movement. At this step you must choose will the price goes up (in this case choose “up” variant), or will it goes down (choose “down” variant). Finally you click “apply” and wait until your previously selected time period will come to end.
- After the end of time interval you will find out were you right or wrong with your predictions and you’ll see how much you win or lose by using this option.
- Remember that you can’t win more than broker offered even if the price will rise far in the direction that you predicted.
You only make one choice or another and nothing else in binary option trading. World known brokers often offer from 70 to 85% of pure profit and from 0 to 15% of returns when you lose. These profits and returns depend on your broker and it is up to you what broker will you choose and how big returns will suit you.
Eventually we can sum up all rules that were mentioned in article and pick out the most important among them:
- Risk is an integral attribute of binary option trading and it’s impossible to become really successful trader without any risk. You must just get used to it, put up with it and control risk level.
- No secrets in binary trading exist. You shouldn’t suspect your broker in deception because all trade conditions are clearly written in your broker’s trading platform and you read them carefully before making a decision. So, you are fully responsible of your actions and further outcomes.
- All trading platform are user free and you don’t have to be a specialist in binary options, even beginner can deal with all steps before making a trade.
- And the final point is that you aren’t obliged to be a great expert in financial market to earn money by successful trades because binary option trading is available to everyone. But don’t forget that if you want to become really prosperous trader you must be based not only your presentiment but on the real strategy which is worked out only by yourself.
In conclusion we want to emphasize that even beginners can achieve great results in this trading. Don’t be in panic and don’t worry if you are a newcomer. The best way for you at the start is to try again and again and learn a lot about all peculiarities of binary options and eventually you surely get success in it. Your future depends only from you, so make it awesome with binary options trading!