How to make money with binary options
How to trade binary options:
Choose a broker, get acquainted with the trading conditions.
Open an account, make a deposit.
Choose a trading strategy.
Analyze the market and predict the price direction.
Set the bet amount, select the expiration date and open the option.
Binary options trading is a quicker and less complicated way of trading that allows you to make profits within a short amount of time. However, while a trader can make large profits in a short period, they can also lose a lot of money too. Being successful in binary options trading is determined by your trading knowledge, experience, and emotional control.
Start trading binary options now with Pocket Option!What is Binary Options Trading
Binary options, simply put, is a type of financial option where the payout is reliant on the yes or no outcome from two possible results. Binary options trading is trading streamlined options contracts with a set fixed risk and reward. Here's the rundown of everything you need to know on how to trade binary options successfully.
TOP-3 Best Binary Options Strategies for Beginners
Most traders offer a variety of trading strategies which can all be confusing if you're just starting. We have listed the TOP 3 binary forex trading strategies for beginners to help you navigate with ease.
Follow Trends
With this strategy, the price of the underlying assets follows trends rising or falling in value along with the asset they're linked to, as market speculation shift in response to real-world events. The trends follow a zig-zag pattern and give you the option to forecast whether the price will be higher or lower.
Follow The News
Following the news is an actual strategy you can use if you're also using the news for signals. You must understand the underlying assets you are buying and selling to decide if a given piece of news will impact it negatively or positively.
Straddle Strategy
Amid a volatile market, this is the most ideal binary options trading strategy to use. An asset's value rises temporarily but based on your predictions and signals it may soon drop. Once the asset value begins to drop, but not to its lowest, you can call your option in anticipation that it will rise again. You are guaranteed to make some money either way.
TOP-5 Best Binary Option Brokers
We have chosen the best three binary option trading brokers. The TOP 3 are rated based on the convenience of their terminal, their trading options, commissions and bonuses as well as financial work conditions.
QUOTEX
QUOTEX is a broker specializing in binary options trading. The company was established in 2019. Its clients can trade currencies, metals, oil, cryptocurrencies, stock indices and earn a profit of up to 90% of the value of the option. QUOTEX has developed a proprietary trading platform which is easily customized, supports 29 technical indicators and allows investments from USD 10. The broker’s team provides support 24/7. Personal and payment information of the clients are protected with two-factor authentication.
Pocket Option
The Pocket Option broker is part of Gembell Limited holding, which was founded by a group of professionals seasoned in trading and investment activities. The company is mass-market requirements-based, therefore, it provides quality services to binary options trading in the OTC market access. The broker strives to make the trading process as simple, clear, and convenient as possible. For this reason, Pocket Option has developed a unique trading platform to ensure stable trading for traders and investors.
IQcent
IQcent is a Marshall Islands-registered broker that offers access to online CFD and binary options trading. The company accrues many bonuses to customers and allows you to use electronic payment systems for depositing and withdrawing funds. IQcent offers a proprietary terminal with built-in technical analysis tools that support standalone and copy trading. The company also has a trading platform for mobile devices (mobile app). IQcent clients get trading access to the following instruments: binary options, CFDs on stock indices, gold, silver, currencies, and cryptocurrencies. In total, more than 100 trading instruments are available to IQcent clients. The company does not charge commissions for making a deposit, withdrawing funds in cryptocurrency, and maintaining a trading account. IQcent provides clients with access to primary training articles and guides and uses modern technologies to ensure the safety of client funds and users' personal data. 256-bit SSL encryption, 3D Secure, and Visa MasterCard Secure Code are used to achieve these goals.
Types of Binary Options
Many brokers provide a wide range of trading instruments while also modernizing and developing new ones. In this section, we will list the most popular and commonly used trading tools.
High/Low Options
This is the most fundamental instrument of the three and is considered to be the most popular among traders. It involves predicting the direction in which an asset will move over a predetermined time interval. All of this all based on whether the price of the asset is higher or lower than its current price at the expiry time.
Touch Options
The trading touch options instrument is based on the level that the price will touch during an increase or decrease. You get paid regardless of which way it moves. Unlike the previous variant where you get your profit after the first touch, this one dictates that you wait until the transaction has been completely executed. You receive your profit if the price hasn't hit the predetermined mark.
Range Options
When using this instrument, the price must stay within the range that the trader has set. The trader must specify the price range in which the price will change during the specified time. When the price does not exceed the specified frames, the trader makes a profit.
Spread Options
Here, traders predict whether the price of an underlying asset will remain inside or outside a given range for the duration of the trade. This option has higher returns than the high/low option and can bear returns of up to 100%. Considered the better option when it comes to trading in flat markets, it's easier to anticipate any big swings in price.
Best 60-Second Binary Options StrategiesPros and cons Of Binary Options Trading
👍 Pros Of Binary Options Trading
•You can trade on a low budget - most binary options sites allow you to open an account for a few hundred dollars. This enables you to employ better binary money management strategies. Making it ideal for many traders who don't want to invest heavily.
•It is a low-cost way to trade a wide range of underlying instruments - Binary options can be used to trade stocks, commodities, currencies, and indices. Trades can be made for as little as $1. You access a diverse market range, meaning if conditions in one aren't ideal, you may find optimal conditions in another.
•Possible large and quick returns - you can make 75-90% profit on one trade per day. You could even trade options with shorter expiry times. For quick returns, you can trade one-minute options.
👎 Cons of Binary Option Trading
•Poor regulation - Many binary options brokers are currently unregulated. This makes it more difficult to find a reliable broker.
•Tighter trade size restrictions for the big high rollers - some brokers have no exposure limits, but most require you to invest no more than a few thousand dollars at a time, which can be difficult if you want to move a large amount of money.
•Demo testing capabilities are limited - If you want to trade Forex, you'll find that many brokers provide a demo platform that you can use indefinitely. Most binary options brokers provide you with a demo platform that you can only use for a short time.
How to make money trading binary options
Learn the basics of binary options trading - After conducting extensive market research, select your asset. Assets that can be used in binary options trading vary greatly and can include commodities, currency pairs, stocks, etc.
Find a broker - There are many binary options brokers available online. Once you choose your broker, don't start trading right away, first create a test account.
Choose a trading strategy - Implement them one at a time to determine how well they work and to settle on a single long-term strategy.
Risk management assessment - The only way to accurately predict an asset's expiration value is to conduct market research, news analysis, and use binary options trading strategies.
Demo accounts - These accounts allow you to practice trading without risking any real money. The platform imitates the flow and movement of the real binary options market and is an excellent way to test new trading strategies.
Below is a sample demo account from Pocket Option.
Pocket Option demo account
How to Choose a Binary Options Broker
There are several binary options brokers out there, and several things to consider as well. To choose the best broker, use the following criteria.
Age of Broker
Companies that have only existed for a year or two, lack the necessary experience to deal with crises and are less concerned with their reputation than veteran brokers.
Regulation
A binary broker can operate without a license. Avoid using unlicensed brokers as much as possible because they do not report to any authority. Always choose a broker with a license from an authorized regulator.
Is binary trading legal? Are binary options safe?Offices and Representatives Offices
If a binary broker is registered abroad and has an office there, you should consider using them. The best binary options brokers will have a large network of representative offices if they have been in business for a long time.
Trading Conditions
Each binary broker has its own set of trading and non-trading fees. Some use only a few dozen assets, while others have hundreds. The sum of these parameters determines how comfortable you are working with a particular broker.
Customer Service
The best binary options firms closely monitor their technical support because the quality and level of service reflect their approach to work. It is not advisable to select a broker with subpar customer service.
Customer Reviews and Feedback
However helpful, you should only consider reviews posted on independent sites. Some brokers write their reviews on their platforms. For reliable information, try visiting unrelated and objective websites.
Position Rating
Many people believe that rating is important because experts evaluate the best binary brokers based on all of the above parameters as well as other factors. This provides the most objective and comprehensive broker ratings.
Can you make money with binary options?
Yes, you can if you follow a solid plan and learn how to evaluate market conditions. Don't make rash decisions and push the boundaries of your strategy. Never risk more than what your broker is willing to risk. Stick to your financial plan, how much you can afford to lose, and how much you are willing to spend on a single transaction. If you follow these basics, you're likely to increase your deposit.
Binary options trading in summary
Trading binary options are the process of trading simplified option contracts with a fixed risk and reward.
Essentially, traders predict which one or two potential outcomes will result from a trade in a given timeframe. If the trader is correct, they will receive their risked capital as well as a profit of 70-85%
Even though binary options trading is very simple, it is extremely risky and is frequently compared to gambling.
Binary options trading can help traders build a lot of wealth if they understand their risk and only put money on the table that they are willing to lose.
Learn the basics and terminology of binary options, consider the opportunities and risks, select a good broker that offers beginners bonuses, experiment with demo accounts, implement a strong strategy, and don't get greedy.
Binary trading can be extremely profitable, but traders must be aware of the risks involved.
You will be very successful in binary options trading if you implement a solid strategy and properly assess the market situation.
FAQ
Is Trading Binary Options Easy?
Yes, it is. Make sure you learn and understand the fundamentals. Binary trading has huge profits but is also risky and you can lose a lot of money.
How Does Binary Options Trading Work?
The majority of binary options trading is based on a "yes or no" proposition. Each option has a payout of a specific amount or nothing at all.
How do I become a successful binary trader?
To be a successful binary trader, you must first learn how to improve your trading skills and conduct the right amount of research. Practice makes perfect.
How risky is binary trading?
Binary trading is low risk and is generally considered a risk-free trading option. One way to ensure safety in binary options trading is to use a licensed and regulated broker. Study market conditions and trade timeframes so you know what to expect if you trade.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).