Binary Option Trading Explained

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Binary Options Explained

Binary Options are options that only have two possible values upon expiration. Either the option will pay a predetermined value for being in the money, or will expire valueless in the same way traditional option contracts will. Predetermined payout values normally vary between 60%-85% but may be higher. Binary option times to expiration are typically much shorter than traditional options.

Binary option trading has recently become more popular amongst day traders. Binary options have also have received some bad press lately, mostly for brokerages opening accounts from clients who did not have any risk capital to trade with. Despite some unscrupulous brokerages making a bad name for them, binary options are a legal instrument, and can create extremely nice returns for successful traders.

Compared To Traditional Options

Binary options are not contracts traded over open secondary markets like traditional options. Binary options are a contract between you and the brokerage. The brokerage states a payout if the option expires in the money, at Tradorax usually 80% but the amount varies, and the option will expire worthless if it expires out of the money.

Usually the two options a trader has are to either buy a put or a call option, and the strike price is the exact price of the security at the time the trade is taken. Essentially a trader is simply betting on whether the security will be higher or lower than the current price at the time of expiration. It does not matter how far in the money a trade becomes, or if it is even only 1 cent in the money, the option payout price will be the same. Because of this it is obviously in a traders interest to take low volatility but highly probable trades.

Who Makes Money

A brokerage makes money over time because with a big enough sample size, they will win about 50% of the time and all traders combined will win about 50% of the time. Below is the payout tree to a trader with an 80% return for each winning trade, a typical payout.

Obviously for a binary options trading strategy to be effective for a trader, they must win on at least 56% of trades, given an 80% payout on winning trades. For this reason demo accounts are a necessity for new traders who need to work on developing a strategy. Choosing only the most probably trades are vital for binary option traders, since it does not matter how far in the money a trade becomes.

Short Time Frame

Binary option contracts have very short time to expiration most of the time. Some brokers offer time frames as low as 1 minute, and may offer as long as a couple weeks. Because the time to expiration is extremely short the vast majority of the time, binary options are very convenient for traders who do not have all day to watch trades. Trading can take place during a lunch hour, or whenever someone has a few minutes. The short time frame also makes it very enticing for traders to trade more often than they should, and traders must remember to maintain a disciplined approach.

Funding and Withdrawing

After the option expires a traders account is immediately credited with the payout amount or loss, and there are no restrictions on when a trader can withdraw money like traditional brokerage accounts. There are also no restrictions on funding accounts, and this means day traders must be cognizant of the amount of money they are putting at risk, as they must with any strategy.

To open your own binary options account, click below to use our preferred broker.

How Trading Binary Options Makes You Money

Binary options may be one of the simplest and easiest ways to trade. These options offer the opportunity to make a prediction on the value changes on the assets at the end of a specific period of time. The asset could be stock, indices, or commodities. As the trader, you simply predict how the asset will move during a defined period of time.

Best Binary Options Brokers 2020:
  • Binarium
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    Free Demo Account!
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  • Binomo
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    Only For Experienced Traders!

Binary options are also called “all-or-nothing” options. If you accurately predict the movement of the asset within a set period of time, you are paid a fixed return on your investment. You lose your investment completely if the asset does not perform as you expected. The term binary refers to something that has two parts. In this case, there are only two possible outcomes to the investment – win or lose.

How Do Binary Options Work

The most common type of binary option is the high/low option. Let’s assume that you select a binary option in the gold market. You believe the price of gold will increase within the next 6 days. This is referred to as a “call option”. If you believe the price of gold will decrease within that timeframe, you are investing in a “put option”. You will receive a payout of a predetermined amount if you correctly predict whether the price of gold will increase or decrease at the expiry.

Although the high/low option is the most common, there are other binary options available to traders outside of the United States. The “one-touch” option allows the trader to select a specific target price that the asset needs to hit at any point during a specific timeframe. With range options, traders select a price range at which they believe the asset will trade before the expiry.

Make Money with Binary Options

The profits you can achieve are based on your ability to accurately predict the movement of the asset. By accurately determining the movement of the asset, you can make a profit with binary options. The amount is based on the predetermined return rate.

How to Trade Binary Options

Learning how to trade binary options is as easy as choosing a broker, selecting an asset, deciding how much to invest, and determining the expiry. Binary options are a fast-paced, exciting way to trade but they are also simple and easy to understand for new investors.

Choose a Broker

There are many binary options brokers available. A good binary broker will help you to earn more profit. Be sure to check for new investor incentives before you join any broker. Fees and returns on the options vary by a broker, as does the minimum and maximum amount for trades. Be sure to check these details for each broker you consider.

Select an Asset

Unlike other types of trading, binary options allow the trader to make predictions on the asset, instead of purchasing the underlying asset. Traders can select from commodities, indices or stocks. Once determining which type of asset you are interested in, you can then decide to invest in a call option or put option.

Decide How Much to Invest

Each broker’s policies will outline the minimum and maximum trade. Typical trade ranges are from $10 to $10,000 but will vary by broker. When you determine how much to invest, the broker will provide the exact return on the option you selected.

Determine the Expiry

To determine the time-frame for a binary option, you will need to consider the market conditions ,as well as its impact on the price of the asset. Time-frames can vary from minutes to months depending on the types of assets you choose.

Find a Good Binary Options Signals Service

In order to maximize the potential of getting profit, it is advised to check out a binary options signals service. Basically, this type of service will inform you when a profitable trade is available; e’ve listed a few of the best signal providers here: https :// www . personalincome . org / best – binary – options – signals /

How to Play Binary Options

Many brokers and trading platforms allow for a demo period prior to placing live investments. Investors are offered play money to practice their investments. You should take full advantage of these demos prior to going live. You will get a feel of how the platform works, how does binary trading work even before you put up any real money.

Conclusions

If you’re interested in fast-paced, simple trading, then binary options may be the right choice for you. Learning how does binary options trading work is straightforward and easy to understand. Binary options are all or nothing, so there’s always risk involved. But these options offer a simple trading opportunity even for the newest of traders. With some understanding of how do binary options works, I believe you can make the right decision, whether binary options trading is for your or not.

Editor’s Note

If all this spells too much risk for you, then you may best stick to stocks trading. We also suggest subscribing to trading veteran John Thomas’ Trade Alerts, wherein you’ll be cued on what to buy and what to sell and the best time to do it. Sign up below and you get to use his smarts to make yourself a killing.

Стратегии forex/cfd/бинарных опционов

Я хочу рассказать своим клиентам, что представляют собой лучшие стратегии бинарных опционов. Сразу хотела бы уточнить: сосредоточусь на стратегиях, эффективных для краткосрочного трейдинга (временной интервал — 5 минут).

Начинающим трейдерам сейчас не составляет труда отыскать стратегию бинарных опционов, с помощью которой можно успешно начать самостоятельно торговать. Однако есть полезные стратегии, а есть… скажем так, неоднозначные. Среди вторых я хотела бы отметить стратегию «60 секунд», которая сейчас очень популярна. Смею утверждать, что эта популярность незаслуженная. И постараюсь разъяснить почему.

Среди стратегий для бинарных опционов стоит выделить особую разновидность — скальпинговые. Эта стратегия была разработана в середине ХХ века биржевыми трейдерами, нашедшими новый надежный способ получения прибыли. Внутри торгового дня совершалось несколько операций, риск и прибыль от которых не отличались высокими значениями. Однако прибыль была стабильной, что делало торговлю всё более популярной. В несколько видоизмененном виде она дошла и до наших дней.

Чтобы добиться успеха в торговле бинарными опционами, необходимо точно определять, куда дальше пойдет цена актива и чем это может быть обусловлено. Конечно, все трейдеры стремятся разработать выигрышную для себя торговую стратегию. Начинающие специалисты стремятся применять готовые инструменты — поэтому я так подробно знакомлю посетителей своего сайта с лучшими стратегиями. Темой этого материала будет стратегия на уровнях Фибоначчи — стратегия, которая действительно работает и по силам любому трейдеру.

Начну с того, что стратегия – это не просто набор определенных правил, а конечная цель. Очень важно понять данный тезис до глубины души. Я торговала на самых разных рынках, общалась с сотнями трейдеров. У большинства тех, кто торгует на рынке в убыток, схожая проблема, они неверно ставят перед собой задачу.

Что же представляет собой стратегия, основанная на новостях? Для работы по этой стратегии нужно анализировать Экономический календарь, выбирать самые важные события, понимать, как они влияют на рынок — и открывать сделки в соответствии с этим влиянием. Звучит внушительно: должно быть, это сложно? Вовсе нет!

«Контракт на разницу цен» – вот как расшифровывается аббревиатура СFD. За этой формулировкой кроется вид торговли на фондовом рынке, который может оказаться очень прибыльным. Здесь рассказывается о брокерах, помогающих в такой торговле, объясняется специфика работы с СFD-контрактами.

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Некоторые трейдеры (естественно, это относится к новичкам), считают, что опытные специалисты работают, просто бездумно щелкая по кнопкам «CALL» и «PUT». В действительности уважающий себя специалист прекрасно знает, что собой представляют лучшие стратегии форекс/cfd, и умеет применять их в деле.

Торговля forex/cfd/бинарными опционами – это не действия по одному раз и навсегда выбранному шаблону. Чтобы всегда оставаться в плюсе, нужно иметь представление о разных методах, уметь читать сигналы торговли, не пугаться слов типа «Мартингейл» и «Боллинджер», выбирать те опционные стратегии, которые наиболее уместны в конкретной ситуации, которые в состоянии принести трейдеру максимальную прибыль.

Стратегий forex/cfd/бинарных опционов очень много: в каких-то по силам разобраться и неопытным трейдерам, какие-то требуют серьезной специализированной подготовки. Конечно, нас в первую очередь интересуют простые – и при всём при том эффективные – стратегии, которые можно освоить сравнительно быстро.

В этом разделе я привожу список самых популярных стратегий при работе с forex/cfd/бинарными опционами, которые, при правильном использовании, могут принести трейдеру серьёзную прибыль. Вы можете перейти на страницу, где описывается конкретный метод, и прочитать там ее краткую характеристику, а также посмотреть обучающее видео с моими комментариями.

Online Binary Options trading explained

Inside Option is a binary options trading platform which offers high payout on every trade and a big sign up bonus makes sure that you get a big boost in the beginning. We have a top binary options brokers team which are ready to guide you through the process of binary options trading.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect Choice For Beginners!
    Free Demo Account!
    Free Trading Education!
    Get Your Sing-Up Bonus Now!

  • Binomo
    Binomo

    Only For Experienced Traders!

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