Do you want to get into the thrilling and lucrative world of trading binary options but don’t really know where to begin? It is much simpler than you might think to start trading these exciting new securities, so we have put together this small binary options guide to show you how you can start a career trading options. If you follow the simple point outlined in the following options trading guide, you can be trading options, and making money, in no time.
1. Learn What Binary Options Are
Binary options are a relatively new type of security where you make a prediction about whether the price of a certain asset will go up or down. Unlike with stocks or currencies, you are not actually buying the asset itself, just making a wager on the future price of it. Options usually have a fixed time period of as little as 60 seconds and as much as a month. Basically, if you chose right when the option expires you win the trade.
So, you choose an underlying asset, such as a company’s stock and you choose a time period. You can then use a binary options trading guide to look at the stock and see if you think it will go up or down in that period of time. If you think it was go up, you place a call option, if you think it will go down, you place a put option. Then you wait, and if, at the end of the time period your prediction was correct, you get a pre-determined percentage of the profits, as much as 85%! If you are wrong, you simply lose your initial investment.
2. The Tools
Binary options are almost exclusively traded online, so you will need a relatively modern computer as well as reliable high-speed internet access so that you can react instantly to the market. You also need an account with a binary options broker, which we will cover in the next section of this options trading guide. It might also be a good idea to get a charting software program which will give you asset charts in real-time that will help you make better decisions. Additionally, you might want to have a thorough binary options guide available to you.
Most importantly, you are going to need money which you can invest in binary options trading. While the amount of money you use to trade with will vary from person to person, you want it to be enough money that you can survive downturns in the market when they occur. And of course, you want this money to be disposable income that you can afford to lose. No options trading guide would be complete without informing of the high risks of trading options. You have to understand and accept that you may lose whatever money you trade with. Do not continue reading this binary trading guide and start trading if you don’t truly understand the risks.
3. Opening an Account with a Broker
One of the most important parts of trading is having an account with a good options broker. Not all brokers are the same, some offer different assets as well as different rates of return. You want to choose a broker that gives you the best pay outs on the assets you want to trade, as that is the way to make the most money. And you want brokers to provide as many options as possible, because while you may not use them all now, you will want to someday. See our binary options guide on brokers for more information ion how to pick the perfect broker for you.
4. Demo Trading
Luckily, you don’t have to start risking your own money from the very first trade, most brokers offer trading on a demo account before you start the real thing. Just as sports stars need to practice before they play a game, traders should practice trading before they do it for real. If you are completely new to trading you want to sign up with a broker who allows you to use the demo account for as long as possible so that you can feel completely comfortable trading. While brokers usually require you to make a deposit before using the demo trading, if you have chosen a good broker, this shouldn’t be a problem.
After a little bit of trading, demo trading may seem like it starts to get boring and you want to jump straight into trading for money. But follow this options trading guide and resist the urge! No matter what system or strategy you might have, there is no substitute for experience, and trading with a demo account is as close to real-life experience as you can get. Use it as much as you possibly can, your future profits depend on it. Take a look at our options trading guide regarding demo account for more.
Binary options, despite the fact that there are only two outcomes of every trade, is not as simple as flipping a coin. You need to have a well thought out strategy and binary options guide in order to actually be successful and turn a profit trading. There are literally hundreds of strategies out there, and you want to find one that suits your specific situation and knowledge. You can find a binary options trading guide for technical strategies, sentimental strategies, and fundamental strategies. At the beginning you want to find a binary trading guide which incorporates elements of all strategies, and then develop your own strategy as you gain more and more experience.
6. Keep Going
As much as certain websites or ‘gurus’ would like you to believe, you are not going to become a millionaire overnight trading binary options. You need to continue trading day after day, week after week, month after month in order to make profits. If you have a sound strategy you absolutely can make money trading options, but they are always long-term gains, not immediate ones.
You also constantly want to analyse your trades and your strategy to make sure that they are still working. Conditions change over time and you don’t want to be doing something that may have worked last month, but is a loser today. Keep good records of your trading career and you will be able to keep your strategy finely tuned.
7. The Future
Depending on how much money you start with, how often you trade, and how successful you are, it can take months or even years to turn binary trading into a career and finally make the dream money you were hoping for. But if you work hard and are smart and persistent, you really can turn huge profits with binary options. Maybe a year from now you will be the one writing a binary options guide for others to follow.