Binary option trading is very popular in many countries worldwide. However, most people still ask the question “can you be a good trader in binary options”. In this article I will try to answer this question and give you a few tips how you can be a good trader in trading binary options.
Binary options trading is a form of committing through predicting the movements of varied assets such as gold, silver, the USD, GBP and so forth this is very alike to other selections of investing such as forex or trading of stocks. It’s however less complicated, has relatively fewer dangers (in the sense that you will always know beforehand what you might lose) and may offer much larger payouts.
The concept is that you can become a professional trader of binary options only if you treat it as a real form of investment. This means learning how it works, learning how to read charts and learning the best way to make appropriate predictions. Each one of these are not that difficult but it can take some time.
Trading binary options online is not as complicated as many people think it is. You don’t have to be an economics expert in order to trade binary option but you do have to be a professional at this.
Option Trading System
In binary options you shall have the opportunity to predict the movement of various assets such as stocks, currency pairs, indices and commodities. Making a prediction can be done after purchasing an asset.
A choice has only two results (hence the name “binary” options). It is because the value of a secured asset can only rise or fall throughout a given timeframe. Your task is to predict if the worth of a secured asset will either rise or fall throughout a specific amount of time.
In order to acquire an option, you will need to commit a degree of money. Usually, you can invest only $5-$10 and as high as several hundreds. If by enough time of the option’s expiration your prediction will attended true, you will obtain your investment back along with the profits you made.
If your prediction end up wrong, then you will eventually lose the spent money.
Below you will see a good example of such conditions:
Types of Options Trades
What are Different Types of Binary Options?
Long Term Trading
Usually around Sept and Oct every year Apple push out a new iPhone and many additional products. Your task is to check out when this may happen (usually, these events are announced months ahead). As IPhone 7 has been released and now experts are talking about IPhone 8.Add the time to your calendar and around 1-2 times prior to the event buy a binary option that predicts that the stock value of Apple will rise through the next 2-3 days. You can make sure that your prediction will be correct fairly, as Apple’s shares usually increase after a fresh product kick off. And growth, this could it be; you made money with binary trading.
You may already know, there are a huge stocks of large companies, such as Yahoo, Samsung, Sony, and Microsoft, etc. Just check out when these businesses are going to unveiling a fresh product and tag it in your calendar. You will most likely find 1-2 such major events during every week of the entire year.
With this plan you could expect to gain around 70% to 80% of that time period but it needs a great deal of arrangements like following reports events. It’s could be effortless money through, so that it ought to be the first pattern you utilize to earn money in trading binary options.
Short Term Trading
After you turn into a bit more experienced you can move to short-term trading. When you have noticed, trading on media happenings includes long-term investments such as weeks or times. A more advanced way is using short-term trades that expire within simply a few minutes or seconds.
Here, you won’t have the ability to use information occurrences, as things happen too fast for media to get any impact on advantage prices. Instead, you are anticipated to learn the charts of varied assets to check out trends.
Tendencies are predefined habits in the short-term activity of assets. Which means that if you capture a routine in its early on development, you can forecast what goes on next (as habits usually react in the same fashion).
These are somewhat more difficult trading patterns nonetheless they are excellent because they enable you to generate favorable results in binary options on a regular basis as they require short-term investments, therefore no need to await major news occasions (like product releases).
The best is usually to use a blend of both trading patterns if you need to generate favorable results constantly using binary options. If you’re just starting with binary options trading, you should begin with the long-term trading pattern I identified above (the main one with Apple as example) because it is rather effortless. Later diversify to short-term then. Check out Education Section for more information.
Puts and Calls
This the basic thing to understand in the options trading education. The put and call options presented to the trader. These two options are used by the trader to predict the price of the asset he/she is trading with. If the trader predicts that the price will go above or rise the trader will choose the Call Option and if the trader predicts that the price will go down or fall the trader will choose the Put Option.
Binary Options One Touch
To explain further if a trader is trading with the currency pair of EUR/USD and it’s price value is 1.3000 on Friday. Now the brokers give an option to choose between Call or Put options. If the trader predicts that the price level will increase to the given specific price value of 1.3200 in the coming next week, the trader will choose the Call option and if the trader predicts that the price value will decrease to the specific price value of 1.2800 in the coming next week, the trader will choose the Put option.
Binary Options No Touch
Are Binary Options Legal?
Reputable financial companies and investment organizations introduced binary options trading in the United States first. After this, multiple countries made a decision to adopt this practice and make it a legal form of financial trading and investing.
Currently binary trading is officially controlled in a huge variety of countries on earth including the USA, the Great Britain, Cyprus, Japan, South Africa and many more.
For financial companies to have the ability to offer binary trading services, they shall have to pass an independent analysis by various government agencies. Only those online trading companies offering legitimate services will be awarded with a financial service agency license. As mentioned in Our Brokers Section.
Also, trading financial resources online by private people reaches this minute legal in every countries on earth. That is also valid in countries where binary options reaches this moment not yet regulated. – To your knowledge binary trading isn’t illegitimate in virtually any countries currently. Check our deep analysis and reviews of all the regulated binary options brokers.
60 Seconds Binary Options Patterns
For all the trading patterns involving Binary Options Trading visit our Education area. You will get all of the best binary option trading patterns and the simple binary option trading patterns for you to easily understand and implement with your trades.
Option range is a restricted form of Binary Options trading that has defined upper and lower limits of the price value and the price variation will be between these upper and lower limits.
You need to know that binary options trading do require certain kind of knowledge to trade them properly.
You do need to be a professional to forecast the movements of certain belongings. Consider of the example I offered you above with Apple and long-term deals they can be of great help if your are just kicking off with binary options trading. There have been no complicated tools or economic theories involved.
To include on the trading patterns mentioned previously, another example is knowing when the United States Federal government Reserve is stamping money.
You’ll find this info in the news headlines. In such instances, the worthiness of the USD more often than not depreciates. So, in this case you can place very accurate investments on the results that the conversion rate between your USD and other currencies increase.
References and Further Reading:
1. Rethinking risk management (RM Stulz – Journal of applied corporate finance, 1996)
2. One-touch double barrier binary option values (CH Hui – Applied Financial Economics, 1996)
3. Mathematical modeling and methods of option pricing (L Jiang, C Li – 2005)
4. Binary option pricing using fuzzy numbers (A Thavaneswaran, SS Appadoo, J Frank – Applied Mathematics Letters, 2013)
5. Binary options: fixed odds financial bets (H Raw – 2011)
6. Option Trading, Price Discovery, and Earnings News Dissemination* (KI Amin, C Lee – Contemporary Accounting Research, 1997)
7. Option trading and individual investor performance (R Bauer, M Cosemans, P Eichholtz – Journal of banking & finance, 2009)
8. Option trading and the relation between price and earnings: A cross-sectional analysis (LCJ Ho – Accounting Review, 1993)