I'am here to share some tips in placing Binary Options trades in the market that i gained from last two and half year experience. You will end up this article with a good understanding of how to enter Binary Options trades in your trading platform.
How to make a Profitable Binary Options trade
Making a traditional binary option trade involves taking a series of steps as follows: Choose from among the available underlying assets, such as currency pairs, stocks, indices, and commodities.
Select an expiry time frame for the binary.
Pick a Call binary if you think the market will rise by expiration or a Put if you think the market will fall.
Enter your desired premium investment amount that represents your risk on the binary option purchase
It is important to note that you can compute the binary option’s potential payout after entering your selection for each step.
The first component of a binary option trading decision involves selecting the underlying asset. Some binary option trades prefer to specialize in one asset or market, while others take positions in a variety of markets simultaneously.
It is of essence to note that you should identify the underlying asset that best suits your trading style and trader requirements. The choice you make is the key to your trades making pro ts or losses.
Some of the types of underlying assets include:
Company stocks
Stocks represent an ownership interest in a company. They are sometimes also referred to as shares or equities. Thousands of stocks are traded daily in the various stock exchange markets worldwide. Stock markets are reviewed daily in the main news media.
Currencies
Examples of currencies include EUR/USD, USD/JPY and GBP/USD. They often fluctuate based on the state of the economies of their countries. Traders usually earn profits from correctly predicting their rising and falling.
Decision based on the market
No two markets are similar, and that applies to the various Binary Options markets available. Some markets prove to be more dynamic, liquid, and volatile than others. For instance, indices typically are less volatile compared to currency markets. Markets such as indices have less signi cant price actions on normal trade periods and only show huge changes when there is a large market disturbance.
Novice traders would work best with the more stable markets, which are easier to read and learn about. However, more adventurers or experienced traders prefer the more dynamic markets, which o er higher pro tability, bigger challenges, and more excitement.
Decision based on the market
No two markets are similar, and that applies to the various Binary Options markets available. Some markets prove to be more dynamic, liquid, and volatile than others. For instance, indices typically are less volatile compared to currency markets. Markets such as indices have less signi cant price actions on normal trade periods and only show huge changes when there is a large market disturbance.
Novice traders would work best with the more stable markets, which are easier to read and learn about. However, more adventurers or experienced traders prefer the more dynamic markets, which o er higher pro tability, bigger challenges, and more excitement.
Future contracts
Futures trading involve speculating on whether the price of an underlying asset will go up or down in the future. All futures contracts are standardized to cover a particular amount of the underlying asset, as well as the quality and delivery location for commodities. Futures also typically trade for quarterly standardized delivery dates, such as March, June, September and December. The most popular futures contracts are based on financial instruments, such as interest rates, currency exchange rates, and stock market indexes like the S&P 500 or the Russell 2000.
The next binary trading decision involves choosing an expiration time after which the option will expire. Binary option brokers typically o er contracts that expire after a set of a number of months, weeks, days or hours.
It is essential that you choose an appropriate expiration time to take advantage of your market view. The selected time frame should make the binary option pro table at or before its expiration if your directional prediction turns out to be accurate.
However, at times you will find that you have made the correct prediction on the direction of price movement but have made the wrong calculation on the turning of this price movement.
The next binary trading decision involves picking either a put or a call option. A binary option trader’s job involves forecasting the direction an asset’s price will move before or by the time of expiration.
Traders who believe the underlying asset’s price will rise could pick a Call or Above binary option. On the other hand, traders who predict the underlying asset’s price will fall could purchase a Put or Below binary option.
An accurate forecast of the asset price’s direction can yield a high return of between 75 to 81%. This almost doubles the initial premium invested in the binary option.
The last step in trading Binary Options involves entering your desired premium investment amounts that represents your risk on the binary option purchase.
Binary option trading o ers an interesting way to earn quick returns. Plenty of advantages exist to trade nancial markets using Binary Options. A major advantage of buying Binary Options is that the risk involved in known at the outset.
Therefore, learning how to trade Binary Options properly helps you maximize the income from your investment.
