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Most Frequently Asked Binary Options Questions
If you have come across our website as you have an interest in Binary Options but do not fully understand how these financial instruments work and operate, then this section of our website will soon enable you to get an understanding of how they work and operate.
Below are the most commonly asked questions surrounding placing Binary Options trades online and once you have read them please do spend some time looking over any of our other Binary Options guides and articles as we have several of them available throughout our website which will help get you off to hopefully a flying start when you decide the time is right to start trading online!
What are Binary Options?
Binary Options are a simple way for anyone to start making profits from stocks and shares without you having to actually purchase stocks and shares in any publically traded company. You will be given two options in regards to trading Binary Options and that will be to try and correctly predict whether the value of any company will increase in value or decrease in value over a given time period. Make the correct decision and you will make a profit however make an incorrect prediction and you will lose your investment. There are many benefits of investing in binary options online.
What Companies Can I Place Binary Options On?
You are able to place Binary Options on any publically traded company anywhere in the world, and as such you can choose from banking institutions, retailers and even place trades on whether the value of commodities or precious metals such as gold and silver will increase in value or decrease in value over any given time period.
Why Do Binary Options Brokers offer Bonuses?
One thing you are going to notice when you visit the website of any Binary Options Broker listed on this website is that each of them offer new traders a range of bonuses. These are given away as an incentive for you to sign up and to start to trade at those sites. The value of the bonus cash you can claim will vary from site to site and will also vary depending how much you deposit into your newly opened trading account, but there are some very generous ones of offer that are certainly worth checking out.
Do I need Specialist Knowledge of Share Trading?
The one main attraction of placing Binary Options online is that you will not need a great understanding of how stocks and shares operate nor will you have to be a technical wizard to be able to place your trades online. For when you sign up at any of our featured Binary Options Brokers you will find a very easy to use trading platform and you simply need to look up the company you are interested in placing a trade on and then choose whether you think the share price will increase of decrease over any given time period. You then place your trade at a value you can afford and when the time period has expired any profits are added to your account instantly.
Do All Binary Options Brokers Accept Nigeria Based Traders?
When you start to browse the internet looking or Binary Options Brokers you will find many of them will accept Nigeria based clients and some won’t. To make your life easier all of the sites listed on this site do indeed accept and welcome Nigeria based customers and as such you will have no problems what so every signing up to their sites, making a deposit, placing your trades and finally getting paid put any profits made in a very timely fashion.
Do I Have to Place Real Money Trades?
Each of our approved and fully licensed and regulated Binary Options Broking site knows that many of their clients will be new to the world of Binary Options trading and this is why they all make available to their newly registered clients a demo mode version of their trading platform. This demo trading platform will allow you to place demo trades on real time and current trading opportunities but do so in a no risk format. This is a great way to truly master placing the quite numerous different types of Binary Options that are available online at any time of the day or night, and it is an option we would advise all new traders make full use off.
What is a Trading Manager?
You will often find that when you sign up to some Binary Options Brokers you will be designated your own personal Trading Manager, this is simply a member of the Broking site staff who is always on hand to help and advise you if you have any questions what so ever. This Manager is also the person to chat to if you are looking or any additional perks of using one site over another as they can often offer you completely risk free trades and additional promotions offers.
Are Trading Profits Paid Tax Free?
You will not be charged any taxes or fees when you have placed winning trades at any of our featured Binary Options sites and as such when you make a withdrawal of any gains make they will be sent to you free of tax. Be aware though there may occasional be some fees charged depending on just which withdrawal options you choose to get paid by, so always try and select on to use that has no fees attached to it!
Are Binary Options Sites Licensed and Regulated?
We have chosen to list only the Binary Options Brokers we know currently hold a full and valid trading license for that way we can be assured of each site we promote to our website visitors will offer you the very highest levels of service, and being regulated they do of course adhere to a very robust code of conduct and ethics. Please be aware not all Binary Options Broking sites you may stumble across online are licensed or regulated and you must always avoid trading any such a site!
How to Succeed with Binary Options Trading 2020
Welcome to the largest expert guide to binary options and binary trading online. BinaryOptions.net has educated traders globally since 2020 and all our articles are written by professionals who make a living in the finance industry and online trading. We have close to a thousand articles and reviews to guide you to be a more profitable trader in 2020 no matter what your current experience level is. If you wish to discuss trading or brokers with other traders, we also have the world’s largest forum with over 20 000 members and lots of daily activity. Read on to get started trading today!
What is a Binary Option and How Do You Make Money?
A binary option is a fast and extremely simple financial instrument which allows investors to speculate on whether the price of an asset will go up or down in the future, for example the stock price of Google, the price of Bitcoin, the USD/GBP exchange rate, or the price of gold. The time span can be as little as 60 seconds, making it possible to trade hundreds of times per day across any global market.
Before you place a trade you know exactly how much you stand to gain if your prediction is correct, usually 70-95% – if you invest $100 you will receive a credit of $170 – $195 on a successful trade. This makes risk management and trading decisions much more simple. The outcome is always a Yes or No answer – you either win it all or you lose it all – hence it being a “binary” option. The risk and reward is known in advance and this structured payoff is one of the attractions.
Exchange traded binaries are also now available, meaning traders are not trading against the broker.
To get started trading you first need a regulated broker account (or licensed). Pick one from the recommended brokers list, where only brokers that have shown themselves to be trustworthy are included. The top broker has been selected as the best choice for most traders.
If you are completely new to binary options you can open a demo account with most brokers, to try out their platform and see what it’s like to trade before you deposit real money.
Introduction Video – How to Trade Binary Options
These videos will introduce you to the concept of binary options and how trading works. If you want to know even more details, please read this whole page and follow the links to all the more in-depth articles. Binary trading does not have to be complicated, but as with any topic you can educate yourself to be an expert and perfect your skills.
The most common type of binary option is the simple “Up/Down” trade. There are however, different types of option. The one common factor, is that the outcome will have a “binary” result (Yes or No). Here are some of the types available:
- Up/Down or High/Low – The basic and most common binary option. Will a price finish higher or lower than the current price a the time of expiry.
- In/Out, Range or Boundary – This option sets a “high” figure and “low” figure. Traders predict whether the price will finish within, or outside, of these levels (or ‘boundaries’).
- Touch/No Touch – These have set levels, higher or lower than the current price. The trader has to predict whether the actual price will ‘touch’ those levels at any point between the time of the trade an expiry.
Note with a touch option, that the trade can close before the expiry time – if the price level is touched before the option expires, then the “Touch” option will payout immediately, regardless of whether the price moves away from the touch level afterwards.
- Ladder – These options behave like a normal Up/Down trade, but rather than using the current strike price, the ladder will have preset price levels (‘laddered’ progressively up or down).These can often be some way from the current strike price.As these options generally need a significant price move, payouts will often go beyond 100% – but both sides of the trade may not be available.
How to Trade – Step by Step Guide
Below is a step by step guide to placing a binary trade:
- Choose a broker – Use our broker reviews and comparison tools to find the best binary trading site for you.
- Select the asset or market to trade – Assets lists are huge, and cover Commodities, Stocks, Cryptocurrency, Forex or Indices. The price of oil, or the Apple stock price, for example.
- Select the expiry time – Options can expire anywhere between 30 seconds up to a year.
- Set the size of the trade – Remember 100% of the investment is at risk so consider the trade amount carefully.
- Click Call / Put or Buy / Sell – Will the asset value rise or fall? Some broker label buttons differently.
- Check and confirm the trade – Many brokers give traders a chance to ensure the details are correct before confirming the trade.
Choose a Broker
Options fraud has been a significant problem in the past. Fraudulent and unlicensed operators exploited binary options as a new exotic derivative. These firms are thankfully disappearing as regulators have finally begun to act, but traders still need to look for regulated brokers.
Note! Don’t EVER trade with a broker or use a service that’s on our blacklist and scams page, stick with the ones we recommend here on the site. Here are some shortcuts to pages that can help you determine which broker is right for you:
- Compare all brokers – if you want to compare the features and offers of all recommended brokers.
- Bonuses and Offers – if you want to make sure you get extra money to trade with, or other promotions and offers.
- Low minimum deposit brokers – if you want to trade for real without having to deposit large sums of money.
- Demo Accounts – if you want to try a trading platform “for real” without depositing money at all.
- Halal Brokers – if you are one of the growing number of Muslim traders.
The number and diversity of assets you can trade varies from broker to broker. Most brokers provide options on popular assets such as major forex pairs including the EUR/USD, USD/JPY and GBP/USD, as well as major stock indices such as the FTSE, S&P 500 or Dow Jones Industrial. Commodities including gold, silver, oil are also generally offered.
Individual stocks and equities are also tradable through many binary brokers. Not every stock will be available though, but generally you can choose from about 25 to 100 popular stocks, such as Google and Apple. These lists are growing all the time as demand dictates.
The asset lists are always listed clearly on every trading platform, and most brokers make their full asset lists available on their website. This information is also available within our reviews, including currency pairs.
The expiry time is the point at which a trade is closed and settled. The only exception is where a ‘Touch’ option has hit a preset level prior to expiry. The expiry for any given trade can range from 30 seconds, up to a year. While binaries initially started with very short expiries, demand has ensured there is now a broad range of expiry times available. Some brokers even give traders the flexibility to set their own specific expiry time.
Expiries are generally grouped into three categories:
- Short Term / Turbo – These are normally classed as any expiry under 5 minutes
- Normal – These would range from 5 minutes, up to ‘end of day’ expiries which expire when the local market for that asset closes.
- Long term – Any expiry beyond the end of the day would be considered long term. The longest expiry might be 12 months.
While slow to react to binary options initially, regulators around the world are now starting to regulate the industry and make their presence felt. The major regulators currently include:
- Financial Conduct Authority (FCA) – UK regulator
- Cyprus Securities and Exchange Commission (CySec) – Cyprus Regulator, often ‘passported’ throughout the EU, under MiFID
- Commodity Futures Trading Commission (CFTC) – US regulator
- Australian Securities and Investments Commission (ASIC)
There are also regulators operating in Malta and the Isle of Man. Many other authorities are now taking a keen a interest in binaries specifically, notably in Europe where domestic regulators are keen to bolster the CySec regulation.
Unregulated brokers still operate, and while some are trustworthy, a lack of regulation is a clear warning sign for potential new customers.
Recently, ESMA (European Securities and Markets Authority) moved to ban the sale and marketing of binary options in the EU. The ban however, only applies to brokers regulated in the EU. This leaves traders two choices to keep trading: Firstly, they can trade with an unregulated firm – this is extremely high risk and not advisable. Some unregulated firms are responsible and honest, but many are not.
The second choice is to use a firm regulated by bodies outside of the EU. ASIC in Australia are a strong regulator – but they will not be implementing a ban. This means ASIC regulated firms can still accept EU traders. See our broker lists for regulated or trusted brokers in your region.
There is also a third option. Traders who register as ‘professional’ are exempt from the new ban. The ban is only designed to protect ‘retail’ investors. A professional trader can continue trading at EU regulated brokers such as IQ Option. To be classed as professional, an account holder must meet two of these three criteria:
- Open 10 or more trades per quarter, of €150 or more.
- Have assets of €500,000 or more
- Have worked for two years in a financial firm and have experience of financial products.
Is binary options trading legal in the USA?
Yes, trading binary options is legal in the US. The US binary options market is strictly regulated. These safeguards are in place to protect US residents, but trading is absolutely legal.
What is illegal, is for non-US based brokers (‘off shore’ brokers) to solicit US residents. It is this which has resulted in some binary options brokers receiving heavy fines, and the majority not accepting traders based in the USA. There are however, a number of options for US traders, where they can trade legally, at reputable brokers, fully regulated by the CFTC.
The US Binary options brokers list above, is tailored to display only brokers that accept US clients. Nadex and CBOE remain the only regulated exchanges however. The Nadex offering delivers binary options that mimic futures contracts more familiar to US pattern day traders.
Binary options trading in the USA
Most binary options brokers operate accounts in USD. This is seen as the ‘global currency’ within the binary options industry and therefore US clients are free to trade with funds in their local currency.
Binary options brokers will generally have their trading platform open when the market of the underlying asset is open. So if trading the NYSE, Nasdaq, DOW or S&P, the assets will be open to trade during the same hours as those markets are open. Any moves by the Federal reserve for example, will feed into binary markets immediately, just as you would expect.
Forex trading has no central market, and as such USD pairs can generally be traded around the clock for 5 days a week. Markets in Hong Kong, Europe and the US, mean that foreign currency can be traded 24 hours a day.
US Traders also have the option of using exchange traded binary options, or an over the counter (OTC) broker. So binary options trading in the US, generally delivers the same level of choice trading in Europe, but in a more closely regulated market.
Some of the links to third party websites included on our website are affiliate links. This means that we may receive commission or a fee if you click on a link that takes you through to a third party website or if you purchase a product from a third party website.
Strategies and Guides
We have a lot of detailed guides and strategy articles for both general education and specialized trading techniques. Below are a few to get you started if you want to learn the basic before you start trading. From Martingale to Rainbow, you can find plenty more on the strategy page.
Signals and Other Services
For further reading on signals and reviews of different services go to the signals page.
If you are totally new to the trading scene then watch this great video by Professor Shiller of Yale University who introduces the main ideas of options:
Education for beginners:
Types of Trades
How to Set Up a Trade
The ability to trade the different types of binary options can be achieved by understanding certain concepts such as strike price or price barrier, settlement, and expiration date. All trades have dates at which they expire.
When the trade expires, the behaviour of the price action according to the type selected will determine if it’s in profit (in the money) or in a loss position (out-of-the-money). In addition, the price targets are key levels that the trader sets as benchmarks to determine outcomes. We will see the application of price targets when we explain the different types.
There are three types of trades. Each of these has different variations. These are:
Let us take them one after the other.
Also called the Up/Down binary trade, the essence is to predict if the market price of the asset will end up higher or lower than the strike price (the selected target price) before the expiration. If the trader expects the price to go up (the “Up” or “High” trade), he purchases a call option. If he expects the price to head downwards (“Low” or “Down”), he purchases a put option. Expiry times can be as low as 5 minutes.
Please note: some brokers classify Up/Down as a different types, where a trader purchases a call option if he expects the price to rise beyond the current price, or purchases a put option if he expects the price to fall below current prices. You may see this as a Rise/Fall type on some trading platforms.
The In/Out type, also called the “tunnel trade” or the “boundary trade”, is used to trade price consolidations (“in”) and breakouts (“out”). How does it work? First, the trader sets two price targets to form a price range. He then purchases an option to predict if the price will stay within the price range/tunnel until expiration (In) or if the price will breakout of the price range in either direction (Out).
The best way to use the tunnel binaries is to use the pivot points of the asset. If you are familiar with pivot points in forex, then you should be able to trade this type.
This type is predicated on the price action touching a price barrier or not. A “Touch” option is a type where the trader purchases a contract that will deliver profit if the market price of the asset purchased touches the set target price at least once before expiry. If the price action does not touch the price target (the strike price) before expiry, the trade will end up as a loss.
A “No Touch” is the exact opposite of the Touch. Here you are betting on the price action of the underlying asset not touching the strike price before the expiration.
There are variations of this type where we have the Double Touch and Double No Touch. Here the trader can set two price targets and purchase a contract that bets on the price touching both targets before expiration (Double Touch) or not touching both targets before expiration (Double No Touch). Normally you would only employ the Double Touch trade when there is intense market volatility and prices are expected to take out several price levels.
Some brokers offer all three types, while others offer two, and there are those that offer only one variety. In addition, some brokers also put restrictions on how expiration dates are set. In order to get the best of the different types, traders are advised to shop around for brokers who will give them maximum flexibility in terms of types and expiration times that can be set.
Trading via your mobile has been made very easy as all major brokers provide fully developed mobile trading apps. Most trading platforms have been designed with mobile device users in mind. So the mobile version will be very similar, if not the same, as the full web version on the traditional websites.
Brokers will cater for both iOS and Android devices, and produce versions for each. Downloads are quick, and traders can sign up via the mobile site as well. Our reviews contain more detail about each brokers mobile app, but most are fully aware that this is a growing area of trading. Traders want to react immediately to news events and market updates, so brokers provide the tools for clients to trade wherever they are.
What Does Binary Options Mean?
“Binary options” means, put very simply, a trade where the outcome is a ‘binary’ Yes/No answer. These options pay a fixed amount if they win (known as “in the money”), but the entire investment is lost, if the binary trade loses. So, in short, they are a form of fixed return financial options.
How Does a Stock Trade Work?
Steps to trade a stock via a binary option;
- Select the stock or equity.
- Identify the desired expiry time (The time the option will end).
- Enter the size of the trade or investment
- Decide if the value will rise or fall and place a put or call
The steps above will be the same at every single broker. More layers of complexity can be added, but when trading equities the simple Up/Down trade type remains the most popular.
Put and Call Options
Call and Put are simply the terms given to buying or selling an option. If a trader thinks the underlying price will go up in value, they can open a call. But where they expect the price to go down, they can place a put trade.
Different trading platforms label their trading buttons different, some even switch between Buy/Sell and Call/Put. Others drop the phrases put and call altogether. Almost every trading platform will make it absolutely clear which direction a trader is opening an option in.
Are Binary Options a Scam?
As a financial investment tool they in themselves not a scam, but there are brokers, trading robots and signal providers that are untrustworthy and dishonest.
The point is not to write off the concept of binary options, based solely on a handful of dishonest brokers. The image of these financial instruments has suffered as a result of these operators, but regulators are slowly starting to prosecute and fine the offenders and the industry is being cleaned up. Our forum is a great place to raise awareness of any wrongdoing.
These simple checks can help anyone avoid the scams:
- Marketing promising huge returns. This is clear warning sign. Binaries are a high risk / high reward tool – they are not a “make money online” scheme and should not be sold as such. Operators making such claims are very likely to be untrustworthy.
- Know the broker. Some operators will ‘funnel’ new customer to a broker they partner with, so the person has no idea who their account is with. A trader should know the broker they are going to trade with! These funnels often fall into the “get rich quick” marketing discussed earlier.
- Cold Calls. Professional brokers will not make cold calls – they do not market themselves in that way. Cold calls will often be from unregulated brokers interested only in getting an initial deposit. Proceed extremely carefully if joining a company that got in contact this way. This would include email contact as well – any form of contact out of the blue.
- Terms and Conditions. When taking a bonus or offer, read the full terms and conditions. Some will include locking in an initial deposit (in addition to the bonus funds) until a high volume of trades have been made. The first deposit is the trader’s cash – legitimate brokers would not claim it as theirs before any trading. Some brokers also offer the option of cancelling a bonus if it does not fit the needs of the trader.
- Do not let anyone trade for you. Avoid allowing any “account manager” to trade for you. There is a clear conflict of interest, but these employees of the broker will encourage traders to make large deposits, and take greater risks . Traders should not let anyone trade on their behalf.
Which Are The Best Trading Strategies?
Binary trading strategies are unique to each trade. We have a strategy section, and there are ideas that traders can experiment with. Technical analysis is of use to some traders, combined with charts, indicators and price action research. Money management is essential to ensure risk management is applied to all trading. Different styles will suit different traders and strategies will also evolve and change.
There is no single “best” strategy. Traders need to ask questions of their investing aims and risk appetite and then learn what works for them.
Are Binary Options Gambling?
This will depend entirely on the habits of the trader. With no strategy or research, then any short term investment is going to win or lose based only on luck. Conversely, a trader making a well researched trade will ensure they have done all they can to avoid relying on good fortune.
Binary options can be used to gamble, but they can also be used to make trades based on value and expected profits. So the answer to the question will come down to the trader.
Advantages of Binary Trading
The main benefit of binaries is the clarity of risk and reward and the structure of the trade.
Minimal Financial Risk
If you have traded forex or its more volatile cousins, crude oil or spot metals such as gold or silver, you will have probably learnt one thing: these markets carry a lot of risk and it is very easy to be blown off the market. Things like leverage and margin, news events, slippages and price re-quotes, etc can all affect a trade negatively. The situation is different in binary options trading. There is no leverage to contend with, and phenomena such as slippage and price re-quotes have no effect on binary option trade outcomes. This reduces the risk in binary option trading to the barest minimum.
The binary options market allows traders to trade financial instruments spread across the currency and commodity markets as well as indices and bonds. This flexibility is unparalleled, and gives traders with the knowledge of how to trade these markets, a one-stop shop to trade all these instruments.
A binary trade outcome is based on just one parameter: direction. The trader is essentially betting on whether a financial asset will end up in a particular direction. In addition, the trader is at liberty to determine when the trade ends, by setting an expiry date. This gives a trade that initially started badly the opportunity to end well. This is not the case with other markets. For example, control of losses can only be achieved using a stop loss. Otherwise, a trader has to endure a drawdown if a trade takes an adverse turn in order to give it room to turn profitable. The simple point being made here is that in binary options, the trader has less to worry about than if he were to trade other markets.
Greater Control of Trades
Traders have better control of trades in binaries. For example, if a trader wants to buy a contract, he knows in advance, what he stands to gain and what he will lose if the trade is out-of-the-money. This is not the case with other markets. For example, when a trader sets a pending order in the forex market to trade a high-impact news event, there is no assurance that his trade will be filled at the entry price or that a losing trade will be closed out at the exit stop loss.
The payouts per trade are usually higher in binaries than with other forms of trading. Some brokers offer payouts of up to 80% on a trade. This is achievable without jeopardising the account. In other markets, such payouts can only occur if a trader disregards all rules of money management and exposes a large amount of trading capital to the market, hoping for one big payout (which never occurs in most cases).
In order to trade the highly volatile forex or commodities markets, a trader has to have a reasonable amount of money as trading capital. For instance, trading gold, a commodity with an intra-day volatility of up to 10,000 pips in times of high volatility, requires trading capital in tens of thousands of dollars. However, binary options has much lower entry requirements, as some brokers allow people to start trading with as low as $10.
Disadvantages of Binary Trading
Reduced Trading Odds for Sure-Banker Trades
The payouts for binary options trades are drastically reduced when the odds for that trade succeeding are very high. While it is true that some trades offer as much as 85% payouts per trade, such high payouts are possible only when a trade is made with the expiry date set at some distance away from the date of the trade. Of course in such situations, the trades are more unpredictable.
Lack of Good Trading Tools
Some brokers do not offer truly helpful trading tools such as charts and features for technical analysis to their clients. Experienced traders can get around this by sourcing for these tools elsewhere; inexperienced traders who are new to the market are not as fortunate. This is changing for the better though, as operators mature and become aware of the need for these tools to attract traders.
Limitations on Risk Management
Unlike in forex where traders can get accounts that allow them to trade mini- and micro-lots on small account sizes, many binary option brokers set a trading floor; minimum amounts which a trader can trade in the market. This makes it easier to lose too much capital when trading binaries. As an illustration, a forex broker may allow you to open an account with $200 and trade micro-lots, which allows a trader to expose only acceptable amounts of his capital to the market. However, you will be hard put finding many binary brokers that will allow you to trade below $50, even with a $200 account. In this situation, four losing trades will blow the account.
Cost of Losing Trades
Unlike in other markets where the risk/reward ratio can be controlled and set to give an edge to winning trades, the odds of binary options tilt the risk-reward ratio in favour of losing trades.
When trading a market like the forex or commodities market, it is possible to close a trade with minimal losses and open another profitable one, if a repeat analysis of the trade reveals the first trade to have been a mistake. Where binaries are traded on an exchange, this is mitigated however.
Spot Forex vs Binary Trading
These are two different alternatives, traded with two different psychologies, but both can make sense as investment tools. One is more TIME centric and the other is more PRICE centric. They both work in time/price but the focus you will find from one to the other is an interesting split. Spot forex traders might overlook time as a factor in their trading which is a very very big mistake. The successful binary trader has a more balanced view of time/price, which simply makes him a more well rounded trader. Binaries by their nature force one to exit a position within a given time frame win or lose which instills a greater focus on discipline and risk management. In forex trading this lack of discipline is the #1 cause for failure to most traders as they will simply hold losing positions for longer periods of time and cut winning positions in shorter periods of time. In binary options that is not possible as time expires your trade ends win or lose. Below are some examples of how this works.
Above is a trade made on the EUR/USD buying in an under 10 minute window of price and time. As a binary trader this focus will naturally make you better than the below example, where a spot forex trader who focuses on price while ignoring the time element ends up in trouble. This psychology of being able to focus on limits and the dual axis will aid you in becoming a better trader overall.
The very advantage of spot trading is its very same failure – the expansion of profits exponentially from 1 point in price. This is to say that if you enter a position that you believe will increase in value and the price does not increase yet accelerates to the downside, the normal tendency for most spot traders is to wait it out or worse add to the losing positions as they figure it will come back. The acceleration in time to the opposite desired direction causes most spot traders to be trapped in unfavourable positions, all because they do not plan time into their reasoning, and this leads to a complete lack of trading discipline.
The nature of binary options force one to have a more complete mindset of trading off both Y = Price Range and X = Time Range as limits are applied. They will simply make you a better overall trader from the start. Conversely on the flip side, they by their nature require a greater win rate as each bet means a 70-90% gain vs a 100% loss. So your win rate needs to be on average 54%-58% to break even. This imbalance causes many traders to overtrade or revenge trade which is just as bad as holding/adding to losing positions as a spot forex trader. To successfully trade you need to practice money management and emotional control.
In conclusion, when starting out as a trader, binaries might offer a better foundation to learn trading. The simple reasoning is that the focus on TIME/PRICE combined is like looking both ways when crossing the street. The average spot forex trader only looks at price, which means he is only looking in one direction before crossing the street. Learning to trade taking both time and price into consideration should aid in making one a much overall trader.
Frequently Asked Questions (FAQ)
Below you can find important facts about Binary Options Demo.com, the service that we provide, and a list of frequently asked questions and answers.
Important Update September 2020 –
From the end of September 2020 we will no longer provide a trading platform. If you are looking for a binary options demo account alternative please visit the following sites :
For USA traders only
For NON USA and Non EUROPEAN traders
Binary Options are currently not allowed in EUROPE. We do have a special casino offer whilst we are waiting for regulations to change
20 Free Spins and Up to $500 Welcome Bonus at Party Casino
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If the charts in our trading room do not load for you then please take the following steps.
1. Contact us to find out if we are experiencing technical difficulties. We are on facebook/twitter where we post platform information as well.
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Are you a Binary Options Broker?
No we are not a binary options broker and our website does not offer any form of real money trading. We are also not part of any broker operation or owned by any binary options broker.
If you are looking for the best binary options brokers we suggest visiting our binary options brokers page.
Is trading on your platform exactly the same as trading at a binary options broker?
How many different assets can I trade on your demo platform?
What happens when I run out of demo money? Can I get more?
If you would like more demo money you can recharge your balance once every 24 hours if your balance is less then $1000. This feature can be found under “Add Demo Money” in the drop down menu under your username.
What does a Free Membership include?
A free membership to binaryoptionsdemo.com lets you trade for as long as you would like on our trading platform. This is perfect for those of you that are looking to practice binary options trading, try out strategies or simply to find out if binary options trading is right for you.
All binary options demo accounts are credited with $1000 in demo money and this amount can be replenished once every 24 hours.
From the moment that you signup you will be automatically entered into any binary options competition that we hold meaning that you are eligible to win some great prizes.
As a free member you can also follow up to three other traders. Whilst you will receive a notification when someone that you follow places a trade, you will need access to TradeConnect in order to be able to view the full trade details.
Update May 22nd 2020 – A free membership now gives you full access to all our features, we no longer offer premium memberships of any kind.
Can I copy other Traders?
If you have access to our TradeConnect feature it is possible to copy other traders. You can choose to copy trades on our platform or you can connect your binaryoptionsdemo.com account to your broker account at one of the brokers that we are integrated with.
Please visit the My Brokers page to connect your accounts. Once your accounts are connected you can use the TradeConnect Copy feature to copy trades directly to your broker account.
What exactly is TradeConnect?
TradeConnect is our unqiue platform feature (access required a premium membership) which allows you to follow our traders and view their trades in real time.
TradeConnect is a great way to learn from the more experienced traders on our platform and you can also use this information to profit by copying trades yourself either manually or with one click at one of our integrated brokers.
It is also possible to copy a trade using your demo account, you can do this by clicking on the copy link that appears in the box for every trade made by someone you follow.
What are the benefits of Premium Membership?
Update May 22nd 2020 – A free membership now gives you full access to all our features, we no longer offer premium memberships of any kind.
By purchasing a premium membership you can follow up to 50 traders with TradeConnect. You will also be able to copy trades made by those that you follow to our trading platform or directly to integrated brokers
To access the copy feature simply connect your binaryoptionsdemo.com account to your account at one of our integrated brokers via the My Brokers page.
Additionally you will be able to have 10 active trades instead of the usual 5, plus your trading limit will be raised from $1000 to $2500.
The fact that you are a premium member will also be reflected in your personal avatar.
How do I become a premium member?
What trading platform do you use?
So just to be be clear, there is no charge for trading as long as I want on your platform?
Where can I view a history of all my trades?
How does your Top Traders feature work?
Our Top Traders feature works exactly as the name implies. All trades on our system are registered and our system automatically keeps track of how much profit each trader has made during a specific period of time as well as a range of other variables.
Top Traders are displayed on the homepage of our website as well as on our Top Traders page. by clicking on any of our traders you can view their profile and see how the traders have performed in more detail.
Using our premium TradeConnect feature you are also able to follow our top traders (or any trader on our platform) and view what trades they make in real-time.
Why is there a difference between your rates and my brokers/platform/mt4/TOS?
There are a number of reasons why the rates for our assets may differ from those of another broker, trading platform, mt4 or TOS.
Please note that we update our real-time rate for visual purposes once per second, ie charts and rate are updated once a second. Trades are executed and close based on faster updates.
Unlike equities and indices, Forex rates can differ depending on which exchange the data is being derived from. Which may also make a difference in your currency strength indicator. Also, different data providers use different exchanges. For our Forex data we use xignite.com. These differences should however not have any effect on trading outcomes as our shortest binary option is of 30-second duration. Commodity prices can also vary slightly depending on the source of the data that is being used.
Binary Options Brokers
It is important to be aware that binary options brokers often display the rates that they are willing to sell you the binary option at. In a lot of cases this is not the real time market rate but a rate that the broker has set.
Graphs at binary options brokers may also not reflect the real time market rates but the adjusted rates. Some brokers may inform you of this only in the fineprint.
And even though a broker might say that they are using rates from Reuters, this may mean that they only use Reuters for the expiry rate whilst using adjusted rates for everything else..
Finally there may also be a delay built into the pricing and execution of trades at various binary options brokers. This is something some brokers will do in order to make it more difficult for traders to win as after all they lose money when you win and vice versa.
In the case of the TOS platform please note that we like binary options brokers use BID/ASK for our Forex rates. If you are using TOS please set graphs to BID/ASK and not MARK.
TOS also uses the data from their own exchange so you see the Forex rate from their dealing desk.
Our Binary Options Competitions & Achievements
One of the factors that makes our platform and website so unique, is the fact that we offer binary options competitions whose results are updated in real-time. We have also created various achievements that you can attain as a trader.
Achievements that you do attain are added automatically to your public profile. Our system also allocates a number of stars to your chosen avatar based on how many achievements you have gained. You can share your profile and achievements easily using the share feature and let your friends know how well you are doing.
You will receive an instant notification whenever you have managed to attain a new achievement.
Our Top Traders page gives you real-time insights into the best traders on our platform at any point in time. There are top traders rankings for various different parameters including in the money percentage, profit made and number of followers attained.
We hold regular binary options contests whereby we define a parameter and a timeframe (for example highest winning streak in a calendar month) and allocate prizes for the top traders at the end of the defined period.
For details of actual contests please visit our Contests page.
How many people can I follow?
If you are a free member you can follow three other traders and be notified when they place a trade.By purchasing a premium membership you can follow up to 25 traders.
Using TradeConnect you will be able to view all details of their trades in real time.
Will you be adding more Assets in future?
Do you provide a newsletter ?
I want to reactivate my account
How does Binaryoptionsdemo.com make money?
By not being a binary options broker (or being connected or part of one) we have managed to avoid any conflict of interests. We do not make money when you lose (or win) unlike a binary options broker.
Of course we do need to make money in order to keep our trading platform free and this is where our sponsors come in. They are the ones that make it possible for us to offer a free binary options trading platform.
Binary vs Crypto – The Pros And Cons
Binary options and cryptocurrencies are popular choices when it comes to financial trading, both offering their unique features which hold different attractions to traders. While binary options are the more established of the two, it is fair to say that cryptocurrency trading has grown in popularity over more recent years.
It is important to recognise that when you trade in either, you are not owning the underlying asset but just trading on its price. This form of trading means that you never actually own the stock, you predict whether it will go up or down or reach a certain amount in a given time. Each come with their own set of benefits and of course, their pitfalls.
To ascertain the pros and cons of both of these trading methods and which suits you the best, we have put together this guide so that you can make an informed decision as to which suits you better and what you should be considering when choosing between binary options and crypto.
In this guide, you will learn:
Any costs involved in each trading type Key differences and what will suit you The pros of cons of binary vs crypto trades
Take your next step:
Trading Payouts And Losses
When considering whether to trade binary options or crypto, it is essential to understand the trade payouts and losses you can encounter. Which is going to make you the most money and with one which will you have the most success? While a good winning streak of short term options can produce good profits, a swing in an ever-fluctuating world of crypto can be even more profitable.
The opposite can be said of either though if the prices go against your trading. With binary options, you can expect anywhere between 60% and 90% returns depending on the broker that you choose. Then there are small transaction fees to consider. Any commission owed will be taken before you are paid out. With crypto, the payouts aren’t entirely as predictable and can vary depending on some factors.
You should have respect for the volatility of the markets as when they fluctuate they can do so dramatically in a short space of time. It is also crucial to weigh up how much your transaction fees will affect your profits and your losses.
Buying crypto can prove quite expensive especially given that bitcoin reached $20,000 for one coin at its peak.
The Costs of Each Method
With cryptocurrency, you are speculating on the cost of the asset without actually owning it. Buying crypto can prove quite expensive especially given that bitcoin reached $20,000 for one coin at its peak, but trading in it is far less costly. There are however many fees to consider. To begin with, converting money into a Coinbase account carries a cost.
You can expect to pay $35 just as a transaction fee for entering the exchange. When you weigh up the cost of entry and exit, that’s a cost of $70. A $100 trade, therefore, is going to cost you a lot. The same value in options doesn’t carry the same level of fees. Binary options are subject to far lower transaction fees.
If you choose a broker that offers trading in your base currency, then this is a fee you can avoid. With Crypto the spreads can mount up, and the more popular digital currencies can be costly to trade in. On a positive though, the only thing that affects the price is supply and demand. As a decentralised currency, no government or authority has control, and it is purely a global asset.
Which Trading Type Suits You
Binary options could be viewed as more popular than crypto because it is undoubtedly more established. Perhaps it is easier to understand and with more knowledge and experience available out there to help you learn how to improve your trading. Cryptocurrencies are more of an unknown quantity given that they are a relatively new concept. Variety with binary options may be considered to make it more appealing.
With assets like commodities, stocks, indices and currency pairs, you can trade on lots of different assets and build up quite a healthy portfolio. In addition to the variety of assets, there are also some diverse trade types – high/low, touch/no touch, ladder options, pairs and more. With short expiry times, you can make lots of trades in a short space of time.
With crypto, while there are a few different digital assets, it isn’t quite as varied as binary. Trading depends on the sort of experience you are after. If you like the variety, then you may prefer binary; however, some people prefer the volatility of crypto and the fact that the fluctuating intraday prices can produce some healthy profits.
It’s also not subject to the same influences as binary options – there are no external factors to consider, the currency is decentralised, and you aren’t at the mercy of governments and authorities.
The Final Pros And Cons
Cryptocurrency is available globally and is a decentralised currency meaning that it has one value everywhere. There are no currency conversions or the like to be concerned about, and its traded around the clock. While this can be a good thing, the downside of this is that you can’t be active while asleep and may miss out on some great opportunities.
With binary options, at least you know when you can trade. The crypto market is very volatile and subject to fluctuating rates which can swing quite a lot in a day. Higher predictability gives the savvy trader plenty of opportunities to make a large profit or equally to lose a lot. Not all brokers will offer every type of asset in either binary or crypto. In fact, with some, you will have a much greater choice than with others.
Many brokers that offer binary, CFDs, Forex and crypto trading may provide more of one type than the other depending on when they established and what they prefer. Some will dabble in crypto and specialise in binary options.
Robert has consulted for our website for five years and is a well-established member of the team. While he is passionate about the site, most of Robert’s time is focused on his current position as CEO of a professional coaching company.
Binary options trading – Frequently Asked Questions
This page offers you answers to the most frequently asked questions on binary options that I receive every day in my mailbox. I hope you’ll find everything you need and everything that interests you.
I am new to trading and would like to start. Can you give me some advice?
My best advice is: Always be learning something new. Be it more trading patterns, watching videos of successful traders, going to trading workshops. This webpage may serve as your inspiration or source of learning materials. Alse I recommend to have a look at the tips for beginners.
I don’t want to invest just yet, but I would like to try binary options. Can I open a free demo account?
Sure, it is also highly recommended! You should never trade with real money, unless your trading pattern was proven in test conditions at a demo mode. This can be accomplished on our demo account which is available for free and does not require registration. Just open this page and start trading!
Also, a complete list with brokers who offer a demo account is available here: Binary options brokers with demo.
What is MetaTrader and why do you keep talking about it?
Metatrader 4 is a program that shows us nice graphs of price movement in stocks, commodities and currency pairs. This program shows very clear and customizable charts (much better than what the brokers show) and that’s the reason why you’ll be able to recognize and estimate the further development of the prices. More on this program in our MetaTrader 4 Show. In general, it’ll make you a better trader and that’s why I keep talking about it.
Where does the money that traders earn come from?
It’s simple: From the people that don’t make it.
A little bit more complicated: Let’s say that a broker has 100 traders. 50 of them will choose the exact same option CALL and 50 choose PUT. Everyone invests $10. Broker then has $1000 all together from his 100 traders. Only 50 will be successful, so then the broker has to give 50*$10* profit (for example 80%) = $900, but they are still left with another $100.
Can I start with binary options even though I don’t know much about stock market or Forex?
Sure, you can, but you’ll need a bit of a practice and study. You can start by reading our tips for beginners and I also suggest reading some ebooks that can be found on our website, including our own articles.
What is the best “binary option strategy”?
If you are looking for a trading pattern, that will guarantee you great results, then you are wrong. There is no super indicator thanks to which we’d be able to win all of the trades (that would be awesome though
It is important to learn to analyse the chart and our Technical analysis show can help you with that and always, even though you are sure that your strategy is the best, use your head.
What is the minimum amount of money I can to invest?
Minimum deposit with the broker IQ Option is $10, but the amounts differ within different brokers. Minimal amount to trade is then $1.
So, if you’d like to try binary options trading, you could try our binary options demo completely free of charge. All you need to do is follow the steps on your screen.
I’d like to trade binary options. Do I have to be 18 years old?
Yes, if you want to trade binary options you have to be 18 years old. Without confirming your age (ID, for example) you won’t be able to withdraw any of your earnings. If you’re not old enough but are still keen to trade binary options, you have to trade on somebody else’s account.
How much can I earn with binary options?
I get asked this question quite a lot, but unfortunately there is no answer to that. How much will you earn trading binary options? That depends completely on you. The amount of your earnings depend on how much time have you spent and how much you understood the particular binary options.
What’s the maximum I can earn?
I really don’t know the exact amount and it’s not given anywhere. Let’s say, you’d be getting lucky and earning around $6000 a month, that would be a bit suspicious. It’s a lot of money and brokers wouldn’t possibly like that – as I’ve told you above. It’s all just speculation, but it could make sense.
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