Binary options have become a dominant trading tool for beginners in recent years. This has become more so with the multiplication of trading platforms available. This type of investment offers traders with high returns and minimum risk. To gain the most returns you will have to learn the way of the market. The following is useful for new traders that want to become successful at trading binary options:
Start Small: A useful bit of advice for new traders is to invest in small trades at the beginning of your trading journey. This is compounded with learning the primary terms of binary options trading; therefore you will be able to become an expert after only a few months of trading this unique product.
Markets: Following the markets and trading binary options at the same time is a strategy that many people use. An addition to this is to trade with demo accounts simultaneously. This would allow you to practice trading while making real money in a live account.
Expiry Time: The expiry time factor means you are in control of which expiry time you choose. Binary Options beginners should take a look in trading in the short or medium term, as they have less experience than advanced traders. This factor goes hand in hand with the amount of potential return you may receive when your option expires.
A smart way to be a success in the short term is to pick the right trading platform from the beginning. Traders should choose the best features that suit their trading style. These may include support quality, percent return and platform security. So if you are a beginner, make sure to evaluate these factors.
Know the meaning of a binary option. A binary option is based on a “yes” or “no” proposition to whether an underlying asset will be above a certain price at a specified time. If you answer yes and are correct at the time of expiry, you win and are “in the money.” If you answer no and lose, you lose the money you invested. You’re “out the money.”
However, unlike other options, you can only make or lose up to $100 per options contract. An underlying asset in binary options trading can be a specific company’s stock; a commodity like gold; a stock index like the S&P 500 Index; Bitcoin; a Forex pairing, which is the value of one foreign currency against another; or a news event, such as whether the Federal Reserve will increase or decrease rates. “In the money” and “out the money” simply refer to whether you answered the proposition a) correctly and are “in the money” or b) incorrectly and are “out the money.” The expiry date is the time or date at which the binary option expires, and the price is examined to see if it increased or decreased. It can be anywhere from five minutes to over a month after you placed the trade.