Binary Options – How Does the Market Work?
Learn How To Make Money Trading Binary options because it is easy to understand and the rules are very simple. If you add the possibility of winning money to this, you get the idea of an ideal business.
The trade consists of predicting if a certain value in currency, commodity, stock, etc. is going to move up or down. The rule that winnings and losses are fixed makes it different from the Forex or the stock market. Risks are certainly lower, and the overall system is simpler.
As a trader, your only task is to choose one of the two options. You either Call (placement of a trade that the price will go up) or Put (placement of a trade that the price will drop).
Trades are not only diverse in asset choice, but also regarding timeframes. You can place a trade lasting for 30 seconds, 60 seconds, 1 hour, several hours, a day, a week, a month, and a year. If you choose to place a trade that expires in 60 seconds, you will have to be very quick to make your choices. If you win, you cash in immediately; if you lose, your investment is gone.
When trading, some people rely on their gut feeling, others on a set of skills, and there are those who engage in statistical analyses of the market to increase their chances.
It is important to know the relevant strategies and how to implement them. They can help you form your opinions and make decisions.
Diversity of choice
It is a good idea, in general, to use more than one broker when entering the Binary options business. When looking for a broker, always look up if they allow multiple (a variety of) trades.
Some brokers offer only limited access, offering only Binary options they want you to place your bets on. You should avoid these brokers and side with the ones that offer the greatest range of trading possibilities.
Make Use of the Bonuses
Almost all Binary options brokers offer generous welcome bonuses. This is great news if you are a newcomer. Take advantage of the trading money put in your account, and multiply it. This is a good thing since you do not have to invest your own money yet (except for the deposit).
Forex Market – Bet on Currencies
Many Binary options traders find it more convenient to place trades on currencies than any other asset (stocks, shares, indices, etc.). Perhaps the currency movement feels more familiar to them than shares and stocks. If you are one of these traders, you can follow the financial news and read the newspapers to see the predictions and place your trade in line with that. That way you can catch up with the latest developments in the capital market and act accordingly.
Early Exit Trades
The Early Exit option will be a part of the offer of every good broker. This means that you can close your trade before the expiration date. If you do so, you will not lose all of your investments but just a minor part in the event of a negative trade.
However, if you do win and you decided to close early, a percentage of your profit will be deducted as well.
Automated Binary Trading
If you would rather rely on a little helper in the matters of trade placements, you can opt for an Option Robot, which is the free signal provider. Automated trading is supported by some of the brokers’ software and, if not, they are independently available regardless of your broker. They work on the principle of automatic parameters which are set based on statistical and mathematical calculations.
According to some traders, the success rate is around 70%.
The opinions are, however, divided among traders. Some state that the Option Robots earned them a significant amount of money, while others say that they are not satisfied with automated trading and prefer to handle their trades independently.
Long-Term Binary Options Strategy
The majority of binary options traders rely on the short-term trading placements (that expire within minutes and hours), even if brokers offer long-term placements. While a trading offer that expires in a year seems somewhat far-fetched and impractical, the daily and weekly, even monthly trading placements fare a little better.
Placing trades with a wider time frame can increase your chances of winning. Longer time frames give you more time to assess the situation properly taking into account events that could happen and factors that influence the value of assets.
Use major news events to your advantage and place a bet accordingly. For example, look for a new product launch, which is almost always a guarantee to get the price up. This is not possible with short time trades since there is no time to consider all factors involved and to rely on hints we pick from the news.
Control Your Emotions
Some people approach the business with a lot of passion and excitement. When adrenalin kicks in, it might influence your sound judgment. It is always good to keep a cool head and not to let emotions interfere. This is still a business with a lot of money at stake (your money), and you should be careful not to lose control of the situation and your investments. Always handle your investments wisely and with cool head.