BINARY OPTIONS – Read This Before You Start

Have you ever thought about trading Binary Options? Are you eager to trade options but are scared of losing your capital? Are you new to this market and want to master trading skills and fundamental analyses? Are you looking for a trusted broker? CloseOption has good news! This article is for you to accelerate your learning curve.

Binary Options trading has long been known to be a lucrative business which provides excitement and money-making opportunities at the same time. However, like many other businesses, Binary Options trading has its ups and downs. Through the first years of journey, traders with insufficient market knowledge and experience are susceptible to make mistakes that expose them to the risk of loss. Therefore, they may experience turbulent times. Thus, a smart trader should take the essential points into their account before and while trading. In this article, we will outline several key things that you should know about Binary Options trading.

What Are Binary Options?

Binary Options are cash-settled options ordered in a fixed-expiration deadline where you receive either a payout or nothing. Simply put, traders should predict the outcome of a binary direction within a determined time frame. If you guess the correct binary situation (yes/no) or direction, your trade will end up in profit. Otherwise, you will lose the bet. Therefore, every option can be considered as a yes or no bet.

Let’s continue with defining some basic terms and features that you will need to know well.

Expiration date (expiry date): the time that your trade ends.

Underlying asset (currency pairs, gold, stocks, etc.): the asset whose real-time price is calculated

Settlement value (bet amount, trade size, etc.): the amount you choose on an expiration.

Strike price (line): the current price of an asset

Ask: the price at which a potential seller is willing to sell.

Bid: the price at which a potential buyer is willing to buy from you.

Buy: betting the expiration price of a binary option will be greater than the strike price.

Sell: betting the expiration price of a binary option will be less than the strike price.

Spread: the difference between the bid and ask

The Nature and Mechanism of Binary Options Trading

Binary Options are financial instruments that have the characteristic of a straight profit and loss line. Since Binary Options trading deals with historical movements of the price of some underlying assets, its nature requires a speculator to check and observe the direction of an instrument (Futures, currencies, stocks, commodities, and bonds) continually. Indeed, Binary Options trading is based on the choice of the strike price level, and if a trader believes that the price of a share will go higher, they can buy the option, and if the price closes at a lower price level, they can sell the option.

Therefore, Binary Options trading has is a linear Profit and Loss profile. If the price strike level which a trader choose closes in cash, the trader will make a profit. However, if the price level closes out of the money, the trader will lose the invested amount. For instance, a Binary Options trader should answer the question: '’ will the amount of a share be above the strike price or below it at the expiry time of 2:15 p.m.?" If the answer is yes and the trader's speculation is correct, the trade will be closed in money, and they will make profits. By the same token, if the trader's appraisal of the price is not correct, the trade will be closed out of the money, and the trader will lose the invested amount.

Binary Options Brokers

Before entering the Binary Options trading world, the first step is choosing an appropriate broker. In a general sense, a broker could be a company or a person that effectively connects buyers and sellers of various underlying assets to trade with one another. During this process, a broker acts somewhat like a middleman or an agent. Similarly, Binary Options brokers sell contracts at a fixed price, and if you win an order, they will give you a fixed percentage return.

How To Find The Right BINARY OPTIONS BROKER

As was mentioned above, first and foremost, one necessary step that should be taken before starting Binary Options trading is finding a trusted Binary Options broker. Nowadays, trading has become more comfortable, and many brokers offer web-based platforms. It means that you can trade electronically. When you place your orders through the broker's trading platform, it allows for several services such as tracking price changes in a variety of underlying assets or checking your available balance to choose the desired amount of the Binary Option you prefer to buy or sell, and many other functions. Besides, some brokers provide their full-featured trading app that enables you to trade wherever and whenever on your smartphone. Some additional features can help you choose the right broker, which as follows:

  • * Satisfactory user interface
  • * Country restriction Check
  • * Demo trading availability
  • * Underlying assets, trading types (specifications fit to your strategies) and payouts
  • * Commitment to withdrawals
  • * Customer service performance
  • * Offers and promotions

Binary Options Traders

If you want to start trading in the Binary Options market, you should be able to answer the following questions correctly. Questions like: Who is a Binary Options Trader? How do they earn money? And what are the essential requirements to become a professional Binary Options Trader?

Let's find the proper answer to these questions together.

A Binary Options Trader, generally, is a trader who has chosen the Binary Options market to make a trade rather than the Forex market or other asset exchanges. Option traders make money from predictions; because in a core level, Binary Options trading is an investment based on the anticipation of price. In Binary Options trading, a prediction could be either right or wrong, but nowhere in between (all or nothing). It means that when traders place an order, there is no way to close it manually, but they should wait for the trade expiration. Indeed, Binary Options traders participate in an analytical game where they attempt to recognize the patterns, to decide on a direction, based on the Binary Options market movement and behavior.

There are some factors that can help traders to be right on direction. In addition to the analytical abilities such as technical or fundamental analyses, Binary Options traders should learn risk management skills to control their stress and weaken the role of emotions in making decisions. Additionally, they should acquire all the trading information essential for winning (e.g., risks, strategies, fees, etc.). All in all, this market could be attractive to those who are looking for excitement!

Beginner’s Guide to Start Trading Binary Options

Most of the time, starting is hard and even scary. However, you can follow some simple but useful instructions to swallow this hardness! and make money by making profitable trades and making use of various promotions available for you. The tips are as follows:

  • * Understand the trade type you are interested in placing and know all the Binary Options trades types that your broker offer. This will help you in choosing the right broker.
  • * Find economic calenders and seek information about financial dates and news stories.
  • * Choose brokers that offer a free and unlimited Binary Options demo account.
  • * Start demo trading, and as you become more experienced, try different indicators and charts to build your trading strategy.
  • * Manage your money and start with small-size trades like $1 trades.
  • * make use of Binary Options bonuses and promotions and try your broker’s withdrawal system (also ease of withdrawals).
  • * Participate in Binary Options Contests.
  • * Start real trading with small deposit amounts.
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