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BINARY OPTIONS GUIDE FOR BEGINNERS
Avoid making beginner mistakes and learn how to start trading binary options with this short step-by-step tutorial. This binary options guide for beginners outlines the most important steps towards trading in a simple and straightforward manner. Start on right track and develop the correct mindset.
How to Start Trading Binary Options the Right Way?
There are many ways one can start trading binary options.
The worst way is to jump right onto a real trading account and try to copy some falsely presented strategy which you encountered on Youtube. The truth is there are many false presentations and fake products connected with binary options industry and many beginners get caught by false promises.
However, binary options trading is not a scam, and it is actually one of the best investment and trading instruments, which is easily accessible to anyone, and which allows making a substantial profit over time if the right approach is taken.
But the truth is that a beginner is unlikely going to make millions or hundreds of thousands of dollars in a month or even a year (as is presented by many fake products and services).
The amount of profit you can make also greatly depends on your initial investment and on your trading skills. An average beginner is most likely not going to invest more than $1.000 into the first real trading attempt. And it is better not to do so.
What to Expect?
What can be done in reality is to slowly build your trading account over time and come up to a level where you can make anywhere from $1.000 to $3.000 per month while maintaining the low-risk approach to trading.
If you limit your appetite and lower your expectations, you can use binary options trading as additional monthly revenue for years to come. And once you get more familiar and experienced with it, you can aim for higher profit.
My Personal Experience
Years ago, when I first encountered binary options trading, I got burned several times, before I actually made my first profit. And it took me almost a year to recover from initial losses.
At that time there was no much information about trading systems and strategies, and I had to learn by myself from scratch.
Lots of trial and error and lots of practice lead me to the position where I was able to make great gains in short periods of time. One of such attempts, for example, was bringing a $200 deposit account to $3.000 in two weeks by manual trading. And my last attempts are bringing $2.000 to $8.000 in 2 weeks by manual trading and $1.000 to $7.000 in only 1 month with my own robot.
1st Place! Best Binary Broker 2020!
Best Choice for Beginners — Free Education + Free Demo Acc!
Sign-up and Get Big Bonus:
2nd place! Good choice!
I am at the point where I construct my own trading strategies and build my own trading robots which I also offer as a service for public use.
Where to start?
What I want to emphasize is that making money with binary options trading is definitely possible and very real.
But it is important for a beginner to lower the expectations and learn from own experience instead of just following some fake strategies from Youtube or fake services with promises of easy money.
If you want to become an independent trader and ultimately trade on your own, the only way is to start slowly and learn as you go. No one was born as a trader.
On the other hand – if you are just interested in making profit without learning – there is a possibility to use robots or signals for fully or semi-automated trading.
Binary Options Trading Step by Step Guide
STEP 1 (DEMO)
1. GET A FREE BINARY OPTIONS TRADING DEMO ACCOUNT
The first step towards trading is to get familiar with the financial instruments you are going to use. This simply means you have to learn how trading works. And the best way to learn is by practice and your own experience.
You don’t want to start trading by making a real investment and you don’t want to practice trading with real money. That’s why you need a free demo account. There are a few very good brokers who offer free no-deposit demo accounts.
PocketOption is a Broker that accepts traders from all around the world and they offer a free demo account which you can try out immediately.
Beginners Guide to Binary Options
When you have an interest in trading Binary Options online or via a mobile device you will of course need a full understanding of how to do so.
With that in mind we have put together the following step by step guide that will enlighten you on how you can master the fine art of trading Binary Options and also find the perfect Broker based on your level of trading experience and the volume of trades you wish to place.
You will of course need to spend some time learning all of the different aspects required to pick out the best Broker to sign up to, and also researching the type of trades you wish to place and a whole plethora of different aspects that will make you into a much more informed trader.
However, if you do follow this guide from start to finish we know you will gain all of the knowledge you will need in regards to you being able to spot potentially profitable trades whilst also being able to know which are the best types of trades to place, where to place them and also how to make use of the many different trader bonuses which can lock in additional trading value.
* Amount to be credited to account for a successful trade
You will first need to understand all of the many different types of Binary Options trades that you are going to be able to place. This is even before you find a Broker at which to sign up to.
By knowing the different types of trades available you will then be able to locate a Broker that is going to offer you the range and types of trades you are going to be interested in placing. With that in mind do read through our guide on the types of Binary Options trades you can place as you may be surprised at just how many different trades will become available to you as a trader.
Choosing Which Trades to Place
One you have an understanding of the range and types of Binary Options trades which can be placed online or via a mobile trading platform you will then need to gain a full understanding of the types of trades which are going to appeal to you the most.
Whilst very experienced traders are always going to be prepared to place trades on anything that is likely to return a profit to them, as a first time and inexperienced trader you may be better off placing trades on companies or commodities that you have an interest in or are very familiar with.
Utilising Economic Calendars
Information is power, more so when you are a Binary Options trader and with that in mind you are always going to need to have access to the very latest financial news stories. However, at various times of the years all developed countries of the world will release financial data which will give an indication of how certain different market sectors are performing in their respective countries.
Please do familiarise yourself with the economic calendars that will enlighten you on a huge array of different financial data and information, as once you know how well different market sectors are performing in each country you can then use that knowledge to help you select the types of trades to place which are likely to help you make financial gains.
Choosing a Binary Options Broker
It is only once you have mastered all of the above qualities and aspects of placing Binary Options trades that you should then start to look around for a Binary Options trader to open an account at.
By putting together a checklist of wants and demands based on what types of trades you wish to place and the variety of trading options you are looking or will you then be able to match your wants and demands with a Binary Options Broker.
Opening Up a Trading Account
One aspect to opening up a Binary Options trading account that is often overlooked by many first time traders, is that there are in fact often several different account types available to you at many different Brokers.
With that in mind we would suggest you read through our guide to opening up a trading account for we will enlighten you on the many different types of trading accounts that are available to you and will point you in the right direction in regards to the type of account that will suit you best.
Methods of Funding a Trading Account
You will of course need to decide how you wish to transfer funds into your trading account whilst also having a method available to you for withdrawing your money out of a trading account when you have made one or more winning trades.
We therefore invite you to take a look through our guide to the many different ways of funding your trading account as there are likely to be several very cost effective and convenient methods available to you based on where it is you live and reside.
Making Use of Trader Bonuses and Promotions
As there is so much competition between Brokers for your custom you are always going to find some form of trader bonuses and promotional offers available at any Broker you do sign up to or are considers joining.
With that in find we have compiled a guide that will walk you through the many different types of trader bonuses and will help you gain an understanding on which ones offer you the best value.
Binary Options Trading Strategies
As you become a more experienced trader you will soon start to discover ways of trading that often tend to make you more regular gains and profits. Every experienced trader will have their own unique trading strategy and as such we would suggest you take a look through our guide which covers that very topic.
By putting into place some form of strategy and always following it when placing any type of Binary Options trades online you are going to have a structured way of trading and one that will be tailored to you personally.
Making Continued Profits
Our final educational guide to Binary Options is going to look at ways you can make continued profits as a Binary Options trader. Whilst it may take you some time to fully master the art of placing traders online or via a mobile trading platforms, once you have there are some high profits to be made 24 hours a day.
Videos provide the best way for traders new to binary options to see exactly what they are, how they work and how to start trading. On this page, we have listed a range of useful demo videos. They start explaining the very basics of binary trading and broker platforms, and move on to more advanced topics, such as specific strategies, technical analysis and managing trading funds.
Some of the presentations have been provided by brokers themselves, others we have created in house – the videos are clearly branded where they have been created by a broker. For example, here is the first – this introduces binaries and runs through how to open a trade at IQ Option:
The next video is also from IQ Option and demonstrates how the charts can be amended to suit the asset and timeframe you want to trade. Most brokers will offer similar flexibility of charts – but it is a particular strength at IQ:
The next video is from 24Option, another leading brand. The clip shows their mobile trading app, as well as some of the other useful tools traders can take advantage of, such as market news and events.
Lastly, we have a platform demo video from EZTrader. These clips demonstrate the subtle differences between platforms. They also however, highlight the consistent elements between brokers. Expiry, asset, trade size and trade direction will be use regardless of the broker or platform.
Technical Analysis Videos
We now start to explore more advanced options. The clips below offer a range of “How To” guides, but also some specific strategy pieces that traders may be able to emulate and profit from.
This first clip shows how to use the Moving Average options with charts. These averages are the cornerstone of many binary strategies and are worth seeing:
Binary Options Trading Guide
Welcome To Our New Traders “Dummies Guide” On The Basics Of Binary Options
Hi and welcome to the BinaryTrading.org’s New Binary Option Traders Guide. This page covers the basic but important facts about binary options you need to know before you begin trading. It is a good idea to bookmark this page as you will likely reference it in the future. Here is an outline of the things you will learn.
- What is a Binary Option?
- Types of Binary Option Trades Available
- Basic Strategies
- Tools You May Want
- List of “Things To Know”
- Example Trades
- Getting Started
What Are Binary Options Themselves
Binary options are very simple option contract with a fixed risk and fixed reward. These options are called binary options because there is a “one or the other choice” and a one or the other payout after the option expires. One or the other choices include up or down, or touch and no/touch. In computer code binary means 1 or 0, or one or the other.
The way a binary option works is from the traders perspective (yours) is that you choose whether or not a certain underlying asset (a stock, commodity, currency etc) is going to go up or down in a certain amount of time. You essentially bet money on this prediction. You are shown how much money up front you will earn if your prediction is correct. If your prediction is wrong, you lose your bet and the money risked. If you predict correctly you get your money risked back PLUS a return. These returns usually are between 70-85%.
A brief example would be that you predict the price of gold to rise from it’s current price of “$1612.75” one hour from now. The winning trade offers a return of 80%. You place a $100 trade on this idea.
One hour from now the option contract expires (closes) and the contract is graded as a “win” or a “loss”, or “in the money” / “out of the money”. Gold goes up to $1613, you predicted correctly. You get your $100 back and a return of 80% – or $80 for a total of $180. Even though gold only went up a tiny amount, you still earn the 80% return. Magnitude of price movement is not a factor in the amount of your return.
Key Ingredients Of A Binary Option Trade
All of the different binary option contracts have these three key ingredients that traders need to take note of. They are the expiry time, the strike price, and the payout offers.
- Expiry Time
- Strike Price
- Payout Offer
The expiry time is simply the length of time from the moment you ‘buy’ the option contract until it closes. This can be as fast as 60 seconds or as long as a month. The majority of traders are trading the short term binary options, anywhere from 60 seconds to 30 minutes.
The strike price is the price that you were able to enter the trade at and this is the price that determines whether or not your trade is a winner or a loser. In the brief example above, the strike price is $1612.75. This is the price that gold needed to close at above in order to win this trade.
The payout offer is the return that binary option broker is offering to you. In the gold trade example above, the payout offer was 80% for a win and 0% for a loss. Some trades do have a return percentage for losses, typically up to 10% although this is broker and trade dependent. The payout offer is known up front before risking any money.
Types Of Binary Options Available
There are multiple types of binary options available to trade. The simplest and by far most common trade is the Up/Down trade. You can learn about the different types of binary options available to trade here.
We have compiled a list of basic binary option strategies that will help you get started making higher probability trades.
Tools You May Want To Use
I am going to beef up this section as new tools arrive on the market to help you make your trades. For now you can review some of the binary trading signal services on this page.
Key Things To Know About Binary Trading
So now you understand the basics of trading binary options. Some key things you should remember before you dive in are these:
- Your risk is limited to your trade amount
- The minimum trade is as little as $10
- You do pay for losing trades – you lose your trade amount (or the majority of it)
- There is plenty of risk involved. Never ever invest more with a broker than you can afford to lose. It’s risky!
- You never take any ownership of the underlying asset – you only “bet” on the direction of it’s price movement
- To make money over the long term you have to win the majority of your trades
- Up / Down are only 1 type of binary option, there are many different kinds of trades available to make with binaries
- Trading binary options is designed to be easy to do.
Your risk is limited to the amount you place on the trade. Your payoff is clearly stated before making the trade. If you win a binary options trade you win a fixed amount of cash. Since there are only two possibilities, that’s the origin of the name “binary options.”
Screenshot of a Binary Trading Interface – Choose Up Or Down, How Much To Risk and “Apply”.
- Up or Down aka ‘Call or Put’
Do you think the price of “x” is going up or down? In the screenshot above from Banc De Binary, we are looking at the current price of gold. Gold is “x”. The green line is the price movement of the gold over the course of time. The red section on the right hand side is the last moment you can trade this binary option. After that point, the option is closed for trading. It has not expired quite yet if you traded previously, however your window of trading is over.
If you think the price of “Gold” is going up you place a “call”.
If you think the price of “Gold” is going down, you place a “put”.
Those are your only two options. Hence “Binary”. If you pick the right choice of the two you win the trade. If you pick wrong you lose the trade. There are two choices only. ‘Up or Down’. And two outcomes, ‘Win or Lose’.
That is the very basics of binary trading for dummies. It is that simple, and it is designed to be that easy. Your return is clearly stated before hitting the ‘apply’ button. You will earn 72% on your investment if you finish the trade ‘in the money’.
“X” can be any number of underlying assets. It can be a certain stock or it can be the price of gold or oil. It can be a currency pair or it can be the price of facebooks stock. You get to choose what underlying asset you want to trade.
There is one more important factor left out of the simple illustration above and that is the expiration time or maturity date of the option. This is the point in time when the trade expires. This is the point when the actual price of the underlying asset is determined and you find out if you finish the trade ‘in the money’ with a win, or ‘out of the money’ with a loss.
If you chose ‘up, or call’ and at the the price expired higher, you win. The expiration times vary from as fast as 60 seconds to as long as hours, days and even weeks.