How To Trade Binary Options Successfully and Profitably

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  • Binarium
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  • Binomo
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Learn How To Trade Binary Options Successfully And Profitably

How to trade binary options, is a question frequently asked by beginners including our readers. So, we aim to give you a proper solution through this article.

Binary options are popular because of its simple trading nature, with a fixed return percentage. Despite its simplistic nature, many traders use on their binary trades far more often than you think.

It boils down to reasons such as lack of trading knowledge, experience, or choosing the wrong broker. Whatever the reason may be there must be a clear plan ahead of trading, so you don’t face ill-consequences in your trading result.

Before enlightening you with the step by step guideline on how to trade binary options profitably, we will give a short brief on what binary options are.

What Are Binary Options?

We are going to explain a basic concept on binary options here, but for detailed information, read what is binary options trading article.

Binary Option is an investment type where you have two outcomes, all or nothing. It has also a fixed expiration.

You have to accurately predict the outcome with an expiry time to make a profit. Either you will win a trade or lose all the money that you have invested for a particular trade. Moreover, you can perform binary trade in two ways.

  • Manual Trading
  • Automated Trading

In manual trading, you do all the hard-work and place the trades yourself using trading strategies . But in auto-trading, automated trading software does the trading for you, using a build-in trading strategy.

Which method you use for trading depends entirely on your preference. If you are a new trader, you might take help from a trading robot in exchange for a price. Or you can learn the basics of trading, and do it yourself.

Binary Trading Example

You already know through our citation that binary options give you a fixed payout and loss amount. To power-up your trading journey, you must have to follow some rules.

Before jumping to those specific points, we will try to connect your existing knowledge with a small example.

James Chen from Investopedia explains binary options trade with the help of an example.

Assume stock XYZ is currently trading at $64.75. A binary option has a strike price of $65 and expires tomorrow at noon. The trader can buy the option for $40. If the price of XYZ finishes above $65, the option expires in the money and is worth $100. The trader makes $60 ($100 – $40).

If the option expires and the price of the stock is below $65, the trader loses the $40 they put into the option. The potential profit and loss, combined, always equals $100.

5 NoteWorthy Steps To Trade Binary Options

What you are expecting from this phase?

Hang on! Let me guess. Maybe, you might think that we will share with you a spell so that you can earn a lot of money. But, the section will focus on the 5 noteworthy steps on how to trade binary options.

  • Choose a regulated broker
  • Analyze the market and asset
  • Practice on a demo account
  • Make an initial deposit
  • Start Live trading

As each step is very powerful, so our recommendation is to read each step without skipping.

# Choose A Broker

Choosing a broker without evaluating some factors can bring disaster. On the other hand, the retail investment market is large and have a lot of scopes. According to a report of SEC,

approximately 7,600 investment advisers registered with the SEC that serve retail investors, with over $12 trillion in retail client assets under management, and approximately 34 million clients.

Isn’t it crazy!

The actual craziest thing is that one has to choose one or more than one broker from thousands. Here, we will mention some factors that you should keep on mind before selecting any broker.

  • Regulation
  • Demo account
  • Minimum initial deposit
  • Ease of use
  • Variety of assets
  • High Payout percentage
  • Fast withdrawals
  • Multiple modes of payment

In addition to that, you refer to our list of binary options broker . It’s not necessary that you have to stick to one broker. No broker is perfect, and one broker may not suit all your needs. Don’t hesitate to trade with multiple brokers.

Taking all the above factors into consideration, we have prepared our list of recommended brokers that you can trade with.

These brokers meet all the requirements such as regulation, offering a demo account, huge asset index, high payouts, fast withdrawals, easy-to-use trading platform, and much more. Here is the list of brokers Binary.com , IQ Option, and BinaryCent that we think will offer you the best binary options trading experience.

Binary.com

IQ Option

BinaryCent

# Analyze The Market & Asset

The trading market is unpredictable and changes every sec. Three main types of analysis bring an optimal trading result.

  • Fundamental Analysis
  • Technical Analysis
  • Sentimental Analysis

Here, an economic calendar works as a ground from where traders use data to forecast the market movement. As there is “no” best method of analysis, so you have to pick the most viable option depending on time-frame and asset information.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    1st Place! Best Binary Broker 2020!
    Best Choice for Beginners — Free Education + Free Demo Acc!
    Sign-up and Get Big Bonus:

  • Binomo
    Binomo

    2nd place! Good choice!

# Practice On A Demo Account

Registering an account is free of charge with most brokers. All it takes is your vital information such as an email address, your first, and last name. Once you have created an account, you need to practice trading through a demo account.

Train yourself with the help of a demo account until you create an unbeaten situation. Educate yourself on the basic concepts of binary trading. Understand what strike price, expiry time, call, and put option, etc. Familiarize yourself with the different ways you can trade binary options.

Just because the funds and the outcome in demo accounts don’t hold any real meaning, it doesn’t mean you should trade recklessly.

Trade on the demo account exactly how you would live trade. This practice will develop your trading skills and build valuable experience.

There is no fixed duration on how long you have to practice on a demo account. Take as long as you need. Finally, when you feel confident enough, you can step up to real trading.

# Make An Initial Deposit

The initial deposit amount varies from broker to broker. You need to deposit on the trading account to carry out live trading. On the other hand, there is a big difference between an investment and deposit.

An investment is a price what you pay to get the future value. Meanwhile, the deposit is a certain amount of money that one needs to open an account.

It is wise to start with a small deposit amount like $10 to $20.

# Start Live Trading

You can start trading on a real account once you are familiar with the ins and out of binary trading. Select your preferred asset and choose your investment amount. Depending on your prediction, buy a call or put option.

Place your trade, and wait until your trade expires. In the next section, we have listed some tips and techniques on binary trading to make your trading successful and profitable.

How To Trade Binary Options Successfully And Profitably – Best Way To Trade

We already discussed a few steps above. Those steps are the principle that one trader should follow whether he is professional or not. After that, you need to turn your binary options trading into a successful profit machine.

Don’t miss out the chance by skipping points that we covered below. Follow these tips to ensure you don’t lose money while trading binary options.

  • Choice of assets
  • Start trading with small
  • Eliminate emotions from trading
  • Choose the right expiry time
  • Follow the market news
  • Risk management
  • Knowledge is power

Choice Of Assets

As you can trade with a large number of assets, so trade those assets that you are most familiar with. Do not take unnecessary risks by trading in markets that you cannot predict.

Successful binary trading depends on how well you can predict the market. Follow the market news before executing trades. Diversification of your portfolio is one way of reducing your overall trading risk. But it doesn’t mean you should diversify to assets that may not be profitable to you.

Stat Trading With Small

You may have heard about the risk management where you have stick on either 1% or 2% rule. It is a general rule of thumb for traders.

90% of traders failed in trading because they have lack of knowledge on money management. Investing a huge amount of money will not help you to increase profits.

So, at first, start with a small amount like $10. After gaining valuable experience, you can start increasing your trade size. No matter how much you practice on a demo account, trading on a live account is a different scenario. As there is real emotion involved, which brings us to our next point.

Eliminate Emotions From Trading

Professional traders are not super-human. They also fight to control their trading emotions. Eventually, all traders must go through a cycle of market emotions.

Controlling emotions is not sky-rocket. However, you will find a difference in gratitude of a winning trader and a losing trader. No wonder, a low expectation level can save you from a massive failure.

Stop dreaming about to get rich quick and follow the 7 secrets that will help you to improve your trading emotions or psychology.

Choose The Right Expiry Time

It is may seem like a matter of preference or a trivial issue, but even expiry time is a crucial factor when it comes to binary options trading.

For example, a trend was supposed to reverse within an hour. But if you placed a trade with 2-hours expiry, the trend would have reversed by then. And, you had lost the trade.

Follow The Market News

Whatever underlying asset you may trade, you need to be informed on the latest global events, and news associated with that asset. Many traders build strategy depending on the market news. So don’t skip on that, and act accordingly.

For example, if there is negative news regarding the gold and a price drop is imminent, log in to your binary options trading platform, and open a put position on gold.

Reacting appropriately to market news can bring in more trading success than you think.

Risk Management (Hedging)

Unless you are a pure gambler looking for absolute results, you should make use of hedging. Hedging is a money management strategy used to protect your profits. In this way, if you are wrong on your prediction, you lose money from your call option, but you regain that back from the put option.

Protecting your investment by buying a binary option contract opposite to your initial contract is hedging. Hedging may reduce your overall profit potential, but it also protects your capital.

If you quite confident about your prediction but still want to hedge, invest the lesser amount in the hedge position compared to your main position.

Knowledge Is Power

Trading education is one of the big factors that play a vital role in success. You need to constantly educate yourself with trading knowledge. Even though binary options look easy and simple, there is a lot that goes into constantly turning your trades into a profitable one.

Moreover, you are less likely to commit mistakes and perform better trading analysis when you are equipped with trading knowledge.

Learn To Trade Binary Option (Manual Vs. Automated Trading)

You can either manually trade binary options or can use binary options software which will do the trading for you.

When you trade manually, you choose the asset, the expiry time, and most importantly, the decision to call or put. Everything depends on you alone. Moreover, you have to set a strategy using indicators and trend lines to make a decision.

In the case of automated binary options trading, a binary robot does all the work for you. It is a programmed software that makes decisions based on certain algorithms.

On the other hand, most binary options robots allow you to customize settings such as investment per trade, risk level, indicators, and choice of assets.

However, if you want to completely leave your fate at the hands of the trading robot, you may do so. Or you can put manual effort also by building strategy.

We would recommend a mix of both auto and manual trading for the best results. We have compiled and reviewed the best binary option trading robots for you.

How to Trade Binary Options Profitably

Every trader is looking for the edge. Traders are always in the pursuit of ways to increase their trading profitability.

Many are of the view that there is a simple solution to their trading profitably. They think that they need to follow a simple strategy, method or use certain software that will lead to endless returns.

Unfortunately, nothing is that easy. Trading Binary Options is just like any other undertaking in life. In order to really well you have to devote some time, effort and have strong discipline.

Although there is no such magic formula, and it depends on individual circumstances, there are certain things that you can do to increase your chance of trading binary options profitably.

Set Realistic Goals

Too many people who get involved with Binary Options have completely unrealistic goals and expectations around what they can realistically achieve trading. They have a view that they merely have to place a few trades a day and their bank account will grow exponentially.

Indeed, this was probably as a result of the many binary option scams that seemed to litter the internet. It made many new traders think that they were invested in some sort of revolutionary product where the simple rules of risk and return did not apply.

In financial markets, the efficient market hypothesis states that markets are perfectly efficient. What this implies is that traders are rewarded more in profit for taking more risk. If there is a situation where the returns are not roughly equal to the risks, it would be quickly priced out of the market.

Moreover, psychologically having unrealistic return objectives can hamper effective trading decision making. For example, if you are “only” achieving 10% a month you may think that your performance is far from what is reasonable. You then start taking more risks and using really inefficient and dangerous strategies.

Therefore, you need to have the right goals and return objectives in place when you trade binary options. Even if you are “only” able to achieve 10% returns per month on your trading objectives this should be looked at positively. It is probably still better than the returns you can expect on the S&P 500 or FTSE 100.

Start from the Basics

Binary options are derivative instruments on other assets. This means that their value is derived from that of some underlying other asset such as equity or forex. Therefore, before you can actually trade binary options profitably, you have to have a basic understanding of what drives the underlying asset price and how to trade that.

This means that you will need to brush up on your knowledge of basic economic principles as well as how various factors impact on asset classes. What is the interest rate parity relationship and how will interest rate announcements move the Euro Dollar? How will the latest company earnings results impact on the share price of some of the largest companies?

This does not require an in depth analysis and Economics / Finance are vast disciplines that incorporate numerous different concepts that are not relevant. It is merely required that a binary options trader knows what could move the needle and impact on the price of the asset while they are trading.

You should also decide which asset class is the most interesting for yourself to trade. Stocks and Equities are more “traditional” as people have a fair idea of what the company does and there are usually a defined list of factors that will impact on the stock price. However, if you would like to trade out of hours or overnight, the Forex markets are nearly always open which could allow you to trade binary options after work.

It is also important for the trader to focus on a particular asset type and possibly even an individual asset. This is because traders who are able to specialise and zone in on only one asset are generally more proficient at it. If one trader is able to study everything there is to know about that asset then they can be much more profitable doing it. Although this may seem quite narrow for an open minded individual, the main goal is profitability and in trading one can’t really be a “jack of all trades”.

Understand Binary Options

Once you have an idea of which underlying asset you would like to trade and how it moves, you need to take the time to understand the basics of binary options. Traditional OTC (Over the Counter) binary options that are traded on Wall Street are indeed quite exotic and complicated instruments. There are a number of factors that goes into pricing these options.

However, in order to trade binary options profitably, the underlying theory behind it is not really required. However, knowing exactly how the payoff structures work as well as all of the inputs is essential. There are also a number of different binary option types that the trader can make use of at some brokers. Knowing how each of these are used combined with the strategies that we talk about below can really improve your profitability. There are numerous binary option education resources online for you to read up on.

Trade with a Strategy

This is where nearly all new traders’ profitability tends to take a knock. They just jump into trading binary options without having any strategy. Too many traders treat trading like gambling and merely enter and exit trades based on their feeling of whether the market will move in the direction that they have assumed. Although some traders may enjoy this type of trading, those who want to really be profitable need to be structured.

When it comes to developing a trading strategy, there is no one size fits all. Trading strategies are usually split into two different types. These are technical strategies and fundamental strategies. These are synonymous with technical and fundamental analysis which is the study of these strategies.

Fundamental analysis is the study of the underlying economic factors behind the asset. These fundamental factors are things like interest rates, GDP, inflation and balance of payments when looking at Forex. They are also such numbers as earnings, ratios and financial analysis when taking a look at stocks and equity. If you are the type of trader who likes to deeply analyse numbers and trade over the slightly longer term then you would be more interested in fundamental analysis.

Technical analysis is the study of charts, indicators and key price levels. It is based in the belief that trends follow the same pattern with regularity. Hence, they study different charts and learn to spot key resistance / support levels. This strategy is focused more on the short term and is used to a large degree by day traders. If you are interested in fast paced trading and have a keen eye for patterns then technical analysis could be of interest to you.

Of course, the best traders have an understanding of both and don’t trade only one strategy in isolation. You would need to have a vague understanding of how general fundamental numbers will drive the binary options that you may be trading with a technical based strategy.

Apart from the trading strategies, you also have to have an effective money management strategy. This strategy can really impact your Binary Options profitability. A trader cannot merely invest a continuous amount of funds when trading binary options. They would need to decide how much they should invest based on a number of factors. This is also where discipline comes in. Emotion can often lead a trader to invest more or less than they should which is based on factors which have nothing to do with the numbers, “fear” and “greed”.

Find the Right Broker

Where most traders see their profitability plummet is when they use an ineffective, or even worse, dishonest broker. This is probably why so many people are scared to invest with these instruments. There are any number of stories about binary option scams which has led to some traders giving up on trading all together.

This is unfortunate as a little due diligence on the broker could have gone a long way. It is not just about jumping with the first broker who gives you a call and offers you endless riches. It is about trying a number of different brokers and asking them all the really important questions.

When you are deciding on what binary options brokers to use you should make sure that a few fundamental boxes are ticked. Is the broker regulated? What are their policies with regards to withdrawals and what are the spreads? More importantly, what tools do they have on their platform and is it functional? If most traders ask these questions, they will greatly improve trading profitability.

Of course, finding a broker that does tick these boxes is great, but you cannot be certain that this is indeed the best broker or platform for you. That is where the binary option demo account can be extremely handy. Not only can this give you a chance to see how efficient and functional the broker platform is, but it also allows you to get a better sense of how the broker operates.

Similarly, because the demo account is free, you can open as many as you like with other brokers. You can test out a number of different brokers and see which platform works best for your trading style. Another great benefit of a demo account is that it allows you to practice your trading strategies mentioned above in a non-threatening manner.

Most brokers would give you more demo funds if you were to run out and hence there is no downside to using a demo account to your heart’s content. It also allows you the opportunity to adapt your trading strategy and tweak it should you not be achieving the profits you will have liked. It may be a cliché, but in binary options trading as in any other discipline, practice makes perfect.

Persistence to Profitability

One of the most important ways to trading Binary Options profitably is through persistence . There may be times when a strategy that you have previously used did not work according to plan. This is sometimes not as a result of your trading but due to abnormal market conditions. This should not deter you from trading any further. Even some of the best traders in the world have been through periods of losses. However, they have sometimes come back with a vigorous and profitable return.

When you have had a period of losses, this could merely be temporary. Markets often tend to revert to a mean and a long term trend line. Hence, if your strategy has been profitable over a certain period of time in the past then a short term loss should be looked at in the context of a longer term horizon. This is another very important reason as to why you should not have unrealistically short time horizons as your expectation.

Sometimes, a strategy itself does indeed break down and what has worked in the past is no longer the case. This should also not be a reason for you to throw in the towel. Trading is a never ending learning experience with opportunities to refine or adapt your strategy at every corner. Try to understand why your trading approach is no longer working, think about whether it needs to be scrapped or merely adapted.

Trading Binary Options profitably also requires constant development. As an online trader who usually operates on their own account, there is usually a lack of interaction that is one would find as standard in other industries. This is why trading communities such as the Binary Trading club are a great way to interact with fellow traders. This will give you the opportunity to bounce ideas off of other traders and ask them for help in shaping your binary options trading strategy and making it profitable .

How To Trade Binary Options Successfully: Complete Guide

Maybe you feel you are now ready to start trading in binary options, and you are excited. Everyone who is getting involved in binary options trading wants to profit from it. You want to know how to master binary options trading. Many will get involved because they have been told they can double their money quick. Unfortunately, that’s not always the case. In fact, many of the best getting involved in binary options trade end up losing and quitting the trade altogether. Many binary options brokers will not tell you this, because they profit when the traders lose. Regardless of how many trading tools, strategies, or round-the-clock financial markets are available, many traders do not achieve the success they wish for.

IMP NOTE:

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The fact that most people do not profit from the trade has not kept people away from it though. More people continue signing up on binary options brokers’ platforms hoping to make some money there. It is estimated that only 5 percent of the people who get involved in binary options trading profit from it. Five percent might sound like a small figure, but bear in mind we are talking about millions of people around the world. There is, therefore, a good number of people profiting from trading in binary options. So, what does it take to profit from trading binary options? What do you have to do to know how to trade binary options profitably? Our hope is that this article can help you successfully trade binary options. Let’s dive in and explore.

We are going to divide the plan on how to trade binary options successfully into two.

1. Basic Steps – this step with show you how to start binary options trading.

2. Strategy

Basic Steps

These are basic steps that you should take to ensure that you are set to trade binary options successfully. These are steps that should be employed by everyone seeking to trade in binary. Please note that these steps do not guarantee winning results, but they will certainly go a long way in ensuring you get the results that you desire. We are going to look at six common steps (assuming you already know what binary options are and how binary options brokers work). Let’s get to it right away.

6 Basic Steps to Successful Binary Trading

1. Choosing the Appropriate Broker

Why do you need a broker to trade binary options? You can only trade in binary options through a binary options broker since the capital threshold for the main market is very high. It is estimated that there are over 400 binary options brokers around the world currently. These brokers have different services and, therefore, the broker you choose plays a huge role in your success as a trader. Some of these brokers are actually scammers. Always go for a reputable, licensed and regulated broker. Your success as a trader depends a lot on the resources and features offered by your broker. Some brokers will offer educational materials and resources while others won’t. You need to get a reliable and trustworthy broker. Keep in mind that the brokers make a profit when you lose.

My Recommended Brokers

2. Start Small

Many people and the brokers themselves will tell you that starting with a demo account is the best way to get started. I beg to differ! However, Why? I mean you don’t have to stake your money with the demo account, so you get to learn slowly.

You see, most of these binary options broker accounts give you a virtual financial market on the demo account. They will not give you access to the real market because in the actual sense there no capital in your account. It’s more like learning to ride a bike by pedaling on a stationary bike. You could still start with a demo account if you are a complete novice, but don’t dwell on it a lot thinking you are learning a lot. It would be unfortunate for you to get involved in the real financial market thinking you know a lot only to end up losing a lot of money because you actually know nothing. My advice is to start with a real account, but start small. Start will small amounts.

3. Managing Risks

This is one of the most important, if not the most important, aspects of trading binary options. If you have no risk management skills, you might as well consider yourself to be gambling rather than trading. Risk management starts with the minimum deposit. Do not deposit money you don’t have. By that I mean;

  • Do not deposit money into a binary trading account when you have pending bills
  • Do not borrow money to trade binary
  • Do not deposit money that is not yours

You need to understand that you cannot solely depend on luck while trading binary. Traders who depend on luck do not last. Once you have your deposit on the trading platform, do not stake all you deposit at once. A general rule is not to use more than 10% of your deposit in a single trade. Chances are that you will lose a couple of times. Give yourself a chance to redeem yourself once you make a wrong prediction. Statistics show that a majority of the binary options traders join a platform, make the first deposit, fail to manage risks and loses all the deposit, then quits and never trades again. That brings me to the next step.

4. Keep the Emotions at Bay

People get carried away by emotions and take too many risks, or quit before they have really explored binary trading exhaustively. The same way you are advised to keep the emotions and attitude away from a workplace is the same way you keep them away from binary options trading because things are not always going to go your way. There are two emotions that are quite detrimental to your trading endeavors;

  • Fear- many people, will make people fail to make a lucrative trade because of fear. You counter fear by having a strategy and sticking to it. We are going to look at strategy next.
  • Greed – greed does to you the opposite of what fear does, but you still end up losing. Greed leads you to take too many risks. Again, it is tackled using strategy.

Keeps these two emotions, and generally all other emotions at bay while trading. Get a strategy and constantly focus on how to improve it. Once you have established a solid strategy, stick to it so long as its working.

5. Personal Discipline

If you do not have personal discipline, you might as well not think of getting involved in binary trading as well. Indiscipline and laziness will kill your dreams of successful binary options trading on arrival. You need to be able to handle high-pressure situations. They need to reason fast and reason logically. Also, learn to stay put even when things do not go your way. Things will fail to go your way a lot of times in your trading endeavors, especially when you are beginning. That’s why many people never make it out of the beginner phase.

6. You Never Know Enough

You can never know everything there is to know about binary trading. You will be shooting yourself in the foot the moment you start thinking you got the perfect strategy and you know it all. The learning never stops. Concentrate on constantly improving your strategy. That improvement will reflect on your winning strategy. Many binary options broker platforms require you to have over 60% winning rate to make a profit.

Strategy

The strategy is the magic word in any binary options trading space. Having a binary options trading strategy is your best bet if you wish to make anything trading in binary options. If you have no strategy for trading in binary options, you are basically gambling. Gambling with binary options has been proven not to be sustainable time and time again. Gambling with binary options is even worse than gambling on pure betting sites and casinos. At least you have the chance to win a jackpot and get life-changing money on the betting sited and casinos (they are rarely won though).

Strategies are based on the financial market behavior. To have a strategy, you need to have some analytical skills or employ a third party that can help you with the analysis. You as the trader relies on statistical and analytical data to analyze the financial market. This approach is usually a bit difficult for beginners to understand, and most of them end up quitting. The strategies developed through the analyses are the most reliable though. There are a lot of resources developed to help you understand the analysis process and the charts. There are no best days to trade binary options. Most of the trading platform run for 24/7.

Below are three of the most common approaches to coming up with a trading strategy.

1. Overall Performance Analysis Strategy

The asset you may choose to trade with is attached to a certain company. The operation of that company is going to have an effect on your trades with the selected asset. Therefore, you would want to concern yourself with the performance and attributes of the company. You need information such as; how the balance sheet of the company looks, cash flow status, income statements and more before you purchase an option.

Also, concern yourself with technical aspects such as employee and partners satisfaction. Generally, this strategy is based on observing the company of the asset you be trading with and the whole industry at large. They will help you make judgments about how their stocks are going to perform.

2. Technical Analysis Strategy

This is a popular and less complex strategy. It is employed by many successful binary options traders. This strategy involves studying and analyzing the past performance of a certain asset and using the findings to predict the future. Analyzing the past gives you a picture of the behavior of an asset in certain conditions. The findings will give you a certain level of certainty of what is going to happen if you anticipate the asset is going to experience similar conditions ahead.

Time is also a crucial factor in binary options trading. For instance, the best time of day to trade 60 second binary options, is during the day when there is a lot happening that effects the trend of the financial markets. During the day is the best time to trade binary options currencies. The is no best time frame to trade binary options though. It depends on how well analyze the previous trends at any given time.

This strategy does not concern itself with the intrinsic value of the asset. As a trader, you do not have to go through the financial statements of a company. There are trading tools used for the technical analysis such as moving average and Bollinger bands and many others. It is one of the strategies to trade binary options.

3. Basic Options Strategy

This is yet another popular strategy that every serious binary options trader should consider. It is fairly easy to understand. The strategy is based on risk minimizing the risks as much as possible. The strategy protects the trader from incurring complete losses, in case they make wrong predictions. Once you pick an underlying asset or currency pair; let’s say the GBP/USD if you notice the market is moving in a good direction you will place a call option, but you also place a put option on the other end on the same asset. The GBP/USD is the best currency to trade binary options.

This is how it works;

Say the currency options GBP/USD is currently at 1:4000 and you are anticipating that it is going to go up so put place a call option of $100 that expires in 10 minutes. You are offered a payout of 80% if you get it and a 10% cash back if you miss it. After the first five minutes, the pair is at 1:4015 which is okay but not convincing. Therefore, you put a put option of the same amount with an expiry of 5 minutes. The payout and cashback percentages remain similar.

So, what are the possible outcomes after the last 5 minutes?

Outcome One

You call option wins and the put option losses, or vice versa. You will have a total payout of $190. That is; the 80% profit from the win, and the 10% cashback loss on the other end. You end up losing $10 since you had staked $200.

Outcome two

You could win on both the call and the put options and get $360. Two wins of $180 each. It is nearly impossible to lose on both ends due to the dynamics of the market. Losing on both ends is only considered hypothetically.

In the scenario depicted above you the amount of loss risked if far less than the possible total possible win. It means if you were to put up three consecutive such trade pairs, then lose two and win one, you would still end up with a profit.

There are many more strategies that are employed. Successful traders use these combine the basic strategies to come up with their best strategy to trade binary options. You trade when you feel you have a leverage in knowing what will happen next to the asset you are trading with. There is no best time to trade binary options. Having a strategy is the way to go if you hope to make anything in binary options trading. It is the safest way to trade binary options.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    1st Place! Best Binary Broker 2020!
    Best Choice for Beginners — Free Education + Free Demo Acc!
    Sign-up and Get Big Bonus:

  • Binomo
    Binomo

    2nd place! Good choice!

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Broker Min Deposit ($) Min Stake ($) Max Payout (%)
IQ Option 10 1 95 1st Choice
ExpertOption 50 1 95 2nd Choice
Olymp Trade 10 1 92 3rd Choice