Trading Binary Options Online

The trade of binary options is one that has elicited heated debate. Some say it is a simple way to make some extra money while others have written it off altogether as a new-age scam or a sophisticated type of online gambling. Whatever your opinion may be, there is no denying that the trade of binary options will be with us for quite some time to come.

The ‘what’

If you’ve never heard of binary option trading, it’s a form of trade of financial assets where the payoff is either a fixed amount of an asset or nothing at all. This basically entails making a prediction on a particular asset’s movement up or down. If at the end of a pre-determined period of time the asset moves in the direction you predicted, then you win a percentage of the amount you had initially bid (typically 50-70% of the bid amount). If you’re prediction was wrong, then you get nothing, hence the term ‘binary’. It’s all or nothing.

You determine the time within which the bid will operate before expiry and the amount you will make once the bid has expired as you make the bid.The time frame is usually between sixty seconds and 150 days for long-term bids.

Do your research before you start

For novices, it is highly recommended that you research carefully before selecting a broker that you will use to make your trades, especially if you will be doing this online. Look for a broker that is being regulated by the relevant authorities whichever country they are registered in.

Learning by doing

Once you’ve found your registered broker, start by opening a binary option demo account. This will help you put what you’ve learned from the training materials into practice. Your demo account will help you understand how the trading platforms operate, what each icon is for, the payment options and they’ll help you understand the jargon associated with binary option trading. Shop around for these as well, as they don’t all offer the same benefits. Once you’ve practiced and have got an understanding of how the bids work, then you can start trading with real money.

Strategy, strategy,strategy…

As with any form of financial trading, whether you’re a novice or an experienced investor, the best way to go about it is by having a binary option trading strategy. This strategy could mean either having a steady streak of wins or of losses. Deciding the best option strategy will not be easy. There is no quick or simple way to come up with this. Most new traders try out a number of different strategies before they settle on one. Patience is key.

You can now start making some money

You’ve practiced on your binary option demo account, you’ve read the literature, you understand how toanalyze charts and place bid. All that’s left is for you to start making some money. Once you find the best option strategy for you, nothing can hold you back.