How to make money with BINARY OPTIONS Trading

Binary options provide very high returns for the investor. You will know t yout the return is before making the investment. You can get returns for your investment as high as 91% or above, with the lowest being 65%. This provides a good opportunity to get high returns in as short a space of time as 60 seconds.

When trading, you do not own the assets. Instead, you simply predict the direction in which the asset will move in the market for a particular duration of time. The value of the asset may rise or fall and your returns will depend on the prediction you made.

The amount by which the asset’s value changes is not important since the returns are not affected by the size of the change in value. You can trade at any time; there are no extra charges or commissions.

What exactly are binary options? This is a question that has been lingering in the minds of many beginners in the binary options market. Well, this is a form of investment in the financial market, whereby the trader places a trade (a contract) that has a fixed reward as well as a fixed risk.

These trades are referred to as binary options because they involve either one or the other choice. Similarly, these trades entail getting one or the other payout option, once the contract has expired. Some of the trading options in this industry include the up or down options and the touch or no/touch options. In computer language, the term binary refers to either 1 or 0.

The working of binary options is pretty simple; what you need to do as a trader is indicating whether a certain asset, which includes commodities, stocks and currency pairs, will appreciate or deprecate in value within a certain period, which is the expiry period for your contract.

In actual sense of the trade, you are actually betting on whether the price of the chosen asset will go up or down within a certain period. While opening a position (contract) on your preferred binary options trading platform, you will be shown the expected payout on the position you would like to open beforehand.

This is a percentage of profit that you can make if your prediction is right at the expiry of the contract. For most binary options brokers, the payout amount ranges between 70 and 85 percent of the invested money in the position. Similarly, if your prediction on the open position is wrong at the time of contract expiry, you will have lost the bet and consequentially the money you staked on the trade.

An Example:

Suppose you would like to stake $100 on an asset whose current price is “$1612.75 and the expected payout is indicated as 80 percent. You need to stake the $100 on this position and set your preferred expiry period, to say one hour. If at the end of the one hour (the expiry period for your contract) the price of the asset goes up and you had predicted that it would go up, you will have won the position. In this case, you will get the amount you staked on the position, $100, and an additional 80 percent of the staked amount.

In total, you will get $180 from this trade. However, traders need to note that the magnitude by which the price of the commodity move will not determine the payout amount. If you had predicted that the price of the asset will go up and drops instead of going up, by the time the contract expires, you will have lost the trade and consequentially the money you staked on the position.

The Main Components of This Trade

All the contracts/trades that you will be placing in the binary options market will always have three key components, namely:

• The strike price
• The expiry time
• The Payout percentage

The strike price in this case is the price of the commodity you have chosen to trade in at the time you open the trade. In the above mentioned example, the strike price of the trade is $1612.75. This is the price of the asset you are trading in at the time you open the trade. It is the price value that will determine whether you have won or lost the position.

The expiry time is the period that your placed contract is expected to expire. It is the period between the time you place the trade and the time it expire. For most brokers in the industry, the trader is allowed to choose his or her preferred expiry period while opening a trade. The expiry period could be as short as 60 seconds or as long as days or even months.

The payout percentage is the predetermined amount that the broker is offering to pay, if you win the trade. In the above mentioned example, the payout amount was 80 percent. In this case, you will get 80 percent of the staked amount, in addition to the staked amount, if you win the trade. However, you will lose the staked amount if you lose the position in this example.

There are brokers in the industry that return a certain percentage of the staked money, if the trader loses the trade. This amount could be as much as 10 percent of the invested money, but is dependent on the trade and the binary options trading platform that you are using.

Some of the Things That You Need To Bear in Mind While Trading

If you have been reading this page, you must have learned the basics of trading binary options. Before venturing into binary options trading, there are various things that you have to bear in mind, some of which include:

• There brokers with a minimum investment amount of as low as $10
• Trader’s risk is limited to the amount he or she has staked in a trade
• You only lose the amount you had staked in a position, if you lose
• You do not own the asset you have used to open a trade; instead you simply bet on the price movements of the price.
• Trading binary options is comparatively risky. Therefore, invest what you can afford to lose.
• There are numerous trading options in the industry, the commonest and easiest of them being the Up / Down trading option.
• To continually make money while trading in binary options, you need to win most of the traders you place in the market.
• Basically, trading in binary options is designed to be easy to carry out, even for the beginners in the market.

In all cases, the payout you will get after winning a certain trade is stated beforehand. Since the risk you incur while trading binary options is limited to the amount of money you put at stake, you should only risk what you can afford to lose in any position.

The Up/Down Trading Option

The Up/Down is among the easiest trading options in the binary options industry. Just like the name suggests, this options entails clicking on either the UP (call) or the Down (put) button, in accordance with the direction that you believe the price will take. Let us look at an example where Gold is the asset you would like to open a trade on.

Most binary options brokers will feature a graph on each asset listed on their platform. In the case of Gold, the graph provided will have a line to indicate the movement of gold prices over time. From the provided graph, you can see how the price of Gold has been changing over time. As such, you can decide on the probable direction that the price will move in the near future. It is on this basis that you make your prediction on whether the price of Gold will rise or fall in the near future.

If you believe that Gold will appreciate in value in the near future, you should click on the ‘Call’ button to open a trade. You should then indicate the amount you would like to stake in the trade and your preferred expiry period from the dropdown menu provided by the broker and then place the trade. If you believe that the price will drop in the near future, you should click on the ‘Put’ and indicate the amount you would like to stake as well as your preferred expiry period before placing the trade.

This is known as binary options simply because the possible results are only two, the UP and the Down options. If you had made the right prediction, you will win the trade after the position has expired. However, if your prediction is wrong, you will end up losing the trade.

Since the choices are only two, there are only to results, you either win or lose the trade. This type of binary options trading options is very easy for the beginners in this market to implement.

As such, it is one of the easiest trading options that new traders should consider trying out. Since the payout on any position is indicated on the platform, even before the trade has opened a position, it should be very easy for beginners in the industry to invest in the financial markets using this trading option.

Here are a couple of things that beginners need to know about the binary options trading industry:

1. As opposed to Forex trading, traders in binary options are not restricted by leveraging
2. The profit or lose you will make from any trade is known before hand and you cannot lose more than what you have invested in a trade.
3. The magnitude by which the price has moved will not affect the much profit or loss you make while trading binary options.
4. The amount of payout on any trade is clearly indicated
5. Trading binary options is comparatively easy, regardless of your experience in the industry of the broker you are using.
6. Trading binary options is not associated with any hidden costs and fees
7. With this form of trade, you need not to be an expert to make a profit
8. The trade entails ‘one or the other’ option, hence is referred to as binary
9. Opening a trade on an asset does not mean that you buy it; you are just betting on the price movements of the said asset.

Binary Options Trading for Beginners

Basically, you do not have to be an expert in trading binary options for you to profit from the trade and make money. In this regard, it is possible for the professional traders, as well as the beginners in the industry to profit from the trade. However, it is essential that traders in this industry come up with a winning strategy in order to continually profit from trading binary options.

To achieve this, you may need to study the various tips and methodologies offered by the experts in the industry. Additionally, you may also use the risk-free, demo accounts offered by some of the reputable and legitimate online brokers to fine tune your skills in trading binary options.

To succeed in making money by trading binary options, you will also need to master how to analyse the market and read graphs and charts offered by your broker. With these in mind, trading binary options should be easy enough for beginners to continually make a profit.

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