Day Trading with Binary Options - Full Guide for Beginners
Day trading binary options - This is a trade that involves opening deals within one trading day. Options open for a period of several minutes to several hours. Popular intraday strategies: scalping, swing trading, channel trading, news trading, local trend trading.
Making use of binary options for day trading is a rather risky affair. However, the rewards can make it a profitable strategy.
In today’s review, readers gain insight into what binary day trading is. They’ll also be advised about what tools may be used to execute their binary options daily trading strategy. In addition to that, users get examples of binary day trading strategies.
Start trading binary options right now with Pocket Option!What Is Binary Day Trading?
Binary option trading is an all-or-nothing form of trading, hence the risk. It has a fixed return and a fixed loss. You place a bet or a call on an asset such as the USD or Euro for a fixed amount of time, say maybe 5 minutes.
If your bet is right at the time of expiry, you will receive the fixed payout. If it is wrong, you will lose your initial bet.
Binary day trading involves speculating on the price relationship of one currency in relation to another.
An AUD/USD relationship could be analyzed and predicted, for instance. Let’s assume it expires in 5 min. As you speculated that the price will go up, the prediction could yield a return of 0.85. Should your bet prove correct, you retain your initial bet and gain an 85 percent profit.
Pros And Cons of Binary Day Trading
👍 Pros
• Due to its all-or-nothing process, binary day trading comes with an incredible amount of risk.
• An awful amount of research is needed in order to successfully predict the value change of any particular asset.
• Even so, traders are never guaranteed to win.
• If you lose, the entirety of what you bet is lost as well.
👎 Cons
• With binary trading, the associated big risk can open up big opportunities.
• Successful traders, on average, can earn a lot of money trading binary options.
• The returns from this sort of trading strategy tend to sit between 70% and 85%. Sometimes, it's even more.
How Does Binary Day Trading Work?
What’s alluring about binary options trading is that it provides a way to make market trades with limited risk and limited profit potential. It’s essentially based on a yes or no proposition.
For instance, let’s consider the following question.
Will the price of platinum today stand above $1,830 at 1:30 p.m.?
Let’s assume the trader believes it will be. He or she then buys the binary option.
On the other hand, the trader may expect platinum to be either exactly $1,830 or below at 1:30 p.m. He or she would sell this binary option in this instance. Binary option prices always stand between $0 and $100. As with other financial markets, binary options have bidding and asking prices.
At 1 p.m., the binary mentioned above may be trading at a bid price of $42.50 and at an offer price $44.50. If a trader buys the binary option at that moment, he or she will fork out $44.50. This is excluding the associated fees.
If a trader decides to sell right then, he or she sells at $42.50. Again, this excludes any associated fees.
The trader decides to buy the option at $44.50. If the price of platinum stands on the upside of $1,830, once the option expires at 1.30 it becomes worth $100. The trader makes a profit of $55.50, calculated as $100—$44.50. Note that fees are charged at this point. In the industry, this is commonly referred to as being “in the money”.
Yet, what if the price of platinum stands just short of $1,830 at 1:30 p.m.? Should this be the case, the binary option would expire at $0. This means the trader loses the $44.50 initially invested. Note that fees are also charged at this point as well. In the industry, this is commonly referred to as being “out of the money”.
Traders should also be aware that the bid and offer prices fluctuate right until the option expires. They can close their positions at any time before the option expires. This allows them to either lock in a profit or reduce a loss.
In a lot of cases, this is often the best option compared to letting the option expire out of the money.
How to Make Money on Binary Options?Binary Options Intraday Strategies
Using this strategy enables the trader to calculate the approximate progress of the asset in question for a specific time frame.
When a trader makes a trade in the U.S. stock market, he or she invests in an asset and makes either a profit or loss depending on the asset’s price increasing or decreasing. The trader would likely need to sell the asset into the market again. This would be done to recognize his or her gains or losses.
The strategy shared above is not a complicated one. It’s an online trading technique with only one requirement. The trader has to forecast the movement of the speculated asset. This speculation should be made for a fixed and preset frame of time.
This approach renders the trade less troublesome and less difficult.
This form of trading, binary day trading, is generally classified into two forms. These are called call and put options.
What’s a Call Option?
A call option is a strategy that sees a forecast being made. The forecast speculates that the price of an asset will rise in the present moment.
What’s a Put Option?
A put option is a strategy that sees a forecast being made. The forecast speculates that the price of an asset will decrease during a specified time frame.
Traders should know that a broker can provide helpful trading tips. These tips are often based on up-to-date market research. It’s a great way to guide a trader into confidently selecting the asset that they intend to place a trade on.
Assets for the Best Binary Option Trading Strategy
Trading binary options means multiple assets can be traded in a market. These ordinarily consist of market indices such as Nifty and Sensex.
Making use of the binary option method, individual stocks can also be traded as well. Yet, it is not every stock that is scheduled in the index that gives traders the choice to trade in options.
Traders should always first check if the stock in question allows them to trade using binary options.
Traders may also like to know that liquid stocks that are tradable using Binary options. Such stocks are scheduled in the Nifty 50 alongside a range of other mid and small cap stocks.
Here’s another helpful note. Simultaneously making trades in the forex and the commodity market is possible using Binary options.
In the trading community, binary trading has secured a great amount of recognition over the last few years. It’s the simplicity of the trades that renders this trading strategy so alluring. When placing a trade, option traders need only make a single choice: YES or a NO.
It’s what makes option trading so uncomplicated for traders. Yet, predicting the direction that an asset will move is necessary. Traders can then place a trade to pull in a profit.
Instruments For Day Trading with Binary Options
There are several instruments one could use to effectively make good binary trades. Traders can make use of market indicators, forecasting platforms, follow up-to-date news feeds and even make use of brokers.
Brokers offer an accessible way to earn money in the market of binary options. Even so, with such a large number of binary brokers to choose from, selecting the most ideal trading platform can feel overwhelming. After all, the trading instrument has to meet your specific trading needs.
Our guide features a review of the leading binary options brokers available. The goal is to assist traders in finding the perfect trading platform for their binary trading strategy.
We had a look at the industry’s leading binary brokers, scored them on a host of factors, then came to our conclusion. The factors we considered include minimum deposits, asset selection, payouts, customer service, regulation and the trading platform overall.
We assert that there are a trader’s best binary options brokers in 2023.
First place goes to Pocket Option. We assert that this is the best overall binary broker around.
Coming in second is IQCent. Those looking for a good copy trading platform should consider this platform.
In third place, we have Binary.com (Deriv). While at times a bit overwhelming, it can rightly be ranked among the most advanced trading platforms around.
Fourth place goes to RaceOption. In terms of signing-up bonuses, this is a very rewarding platform.
In fifth place we have BinaryCent. We believe this platform is the best for beginners.
Our sixth place was given to Nadex. Those in search of a far more US Regulated broker have Nadex to consider.
Remember, while a great broker can be an invaluable trading instrument, there are several others to consider. Traders should simultaneously consider relevant market indicators, forecasting platforms and keep up with news about their speculated asset.
Best Binary day trading Brokers
We’d feel bad if we made a list of good binary brokers then failed to give details about a few of them. In light of this, we’ll delve into the first three listed above. These are namely Pocket Option, BinaryCent and IQCent.
Pocket Option
Pocket Option comes in as our top binary options broker. It’s an innovative trading platform that has very low minimum deposit requirements.
Pocket Option also offers payment methods that are very convenient for traders. Excellent payouts can be earned through its large variety of tools made for technical analysis.
Since it launched back in 2017, the platform has served more than 10 million users. At present, Pocket Option’s user base spans over 95 countries.
Traders are enabled to trade more than 100 assets. These include stocks, cryptocurrencies, commodities, indices and Forex.
If you want to first get comfortable with the platform, that’s not a problem either. Users can form a demo account where they will use virtual money.
This demo will allow users to interact with every feature on the platform. All this will allow the user to learn and make demo trades that do not harbor any real risk.
Those who are relatively new to the realm of binary options might appreciate the fact that Pocket Option sets its minimum trade amount at $1. This should allow many new traders to start with small trades that minimize their risk.
Accessing Pocket Option is easy – another great aspect about this broker. Windows, Android, iOS and web devices can handle your binary options trades on the go.
There is also a comprehensive education section offered by this top broker platform. This is a fact that newer traders are likely to enjoy about Pocket Option. The education section houses guides and tutorials related to effective binary trading strategies.
The Pocket Option broker platform assists traders in feeling confident that they understand the needed details of binary options trading. It’s a good thing to consider before putting all your money on the line.
Overall, this broker platform is extremely safe and convenient, and it has a client base that is widely spread across the world. Those looking for the best binary options platform to trust would be ill-advised not to choose Pocket Option.
In summary, Pocket Option has a minimum deposit of $50. The minimum trade is set at $1. It offers demo accounts and offers over 100 underlying assets to trade with. It;s also widely accepted in the USA.
IQ Cent
IQCent stands as a trading platform that is 100% secure. The platform oversees and processes more than 10,000 daily transactions.
We assert that IQCent offers a wide range of benefits in comparison to other platforms of its kind.
Users gain access to alluring referral benefits, get bonuses for every monetary account in which they make deposits, access non-stop trading features, and can withdraw their money instantly.
IQCent allows traders to choose from over one hundred trading markets. These include Forex, commodities and stocks. Better still, the minimum trade amount comes in at just a single cent.
In summary, much like BinaryCent, the lowest deposit allowed on IQCent is $500. It also sets its minimum trade amount at $0.01. Traders can earn a deposit bonus between 20 and 100%. Users gain access to demo accounts as well. IQCent also has more than 100 underlying assets for users to trade with. The platform is also widely accepted in the USA
BinaryCent
BinaryCent comes as a binary options broker that lets traders invest and make as much as 95% in one minute. They offer a very beginner-friendly platform that lets you trade forex CFDs, pairs and, of course, binary options.
We assert that one of BinaryCent’s best features is how it allows users to copy the trades of the platform’s most successful traders.
Traders choose which successful traders they wish to follow. The trader who is following can then copy the trades made with a simple click of a button. While it may seem rudimentary, this useful copy trading feature often comes in handy for those still in the beginning part of their trade.
We’ve made a list of some of the more admiral aspects of BinaryCent.
1. 10 Cent as its lowest trade amount
Using BinaryCent, traders are able to make binary options trades for as low as 10 cents per trade. You will find this far lower than many other online brokers for binary options.
2. Withdraw your money within the hour.
The trading community is not unfamiliar with dawn-out withdrawal periods. Some brokers can take up to 72 hours to complete withdrawal. BinaryCent has a processing time of 1.
3. You can trade on weekends.
Some brokers put a close to their services once the weekend arrives. BinaryCent allows traders to trade non-stop. Users are able to trade just as well on weekends as they do during the week.
4. Simple to understand and use
For those in search of an easy-to-use trading platform, BinaryCent is among your top options. Not only does it offer payouts that are attractive, it generously rewards first-time deposits.
BinaryCent comes with a minimum trade amount of 10 cents. The lowest deposit users can make stands at $500. Users earn deposit bonuses ranging between 20-100%. It is excellent for both US and UK traders. Through BinaryCent, traders can leverage their trades up to 1:100
There are binary options traders out there who want to make simple profits without the need to constantly monitor the markets. Should this sound like you, then you'll see our next entry: IQCent’s. Much like BinaryCent, it is an easy-to-use platform that offers copy trading features.
FAQs
What is a binary option?
Binary options are financial instruments that make every trade a yes or no decision. You decide if a market will be above a specific price at a given time. You buy if you believe it will. You sell if you don't believe it will be.
What regulations are there for binary options in the US?
The Commodity Futures Trading Commission in the US regulates binary option trading. Binary options can only be traded on CFTC-regulated exchanges. The CFTC, a US government agency, oversees derivatives markets. It protects market participants and the public against fraud, manipulation, abuse, or systemic risk.
Binary options trading, is it risky?
Yes, it can be! You can be sure that you are safe by only trading with CFTC-regulated exchanges. Don't trade with anyone who claims they are a broker or can trade your account on your behalf. Always trade your own account.
What is the minimum deposit required to trade binary options?
Binary trades on Nadex can be priced between $0 to $100. This excludes exchange fees. The trade cost is equal to the maximum risk and any trade fees. Are you not ready to open a live trading account? Our binary options demo account allows you to practice trading binary options.
Related Articles
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.
The area of responsibility of Mikhail includes covering the news of currency and stock markets, fact checking, updating and editing the content published on the Traders Union website. He successfully analyzes complex financial issues and explains their meaning in simple and understandable language for ordinary people. Mikhail generates content that provides full contact with the readers.
Mikhail’s motto: Learn something new and share your experience – never stop!
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.
The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.
Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.
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). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.