Trading binary options is viewed by many traders as an easy and efficient way to make money fast. However, experienced traders will immediately tell you that although this option seems easy, it can be just as easy to lose it by making the wrong decisions. But what exactly are these binary options, how can you make money with them, what are the option types available? To find out the answers to these questions, keep on reading this article.
Binary Options Explained
A binary option is a financial instrument that is simple and fast and which allows investors and traders to speculate and make guesses on whether an asset’s price will increase or decrease in the future. You can speculate on the price of stocks, cryptocurrencies, the exchange rate for two currency pairs, or even the price of precious metals like gold.
The time frame of this action can last as little as 60 seconds, allowing traders to make multiple trades per day from across the global market. This type of trading is also known as the “all or nothing” trade as it allows you to know exactly how much money you can win or lose before making the trade.
If you stay informed about the global trades, the quarterly reviews, the news announcements, and so on, you can make accurate predictions as to how the price will change, turning the trade into a profit. A correct prediction can bring you a gain of 70% to 95% of the trade you have placed and by doing this you can manage risks in trading and minimize them.
Binary Option Types
Before contacting your new binary options brokers and starting trading, you should consider the most common option types available:
- High/Low or Up/Down. This type refers to whether the price will be higher or lower than the current one when the expiration time comes. This is the easiest type available and the one that can most likely guarantee that your financial stability will not be hindered.
- Range/Boundary or In or Out. This is the second type where you have to determine whether the price will end up outside or within the boundaries mentioned.
- Other types available are the touch/no-touch one where the trader must predict if the price will touch the set level or not or the ladder one, or not.
Trading Guide
To trade binary options, you must choose a broker. After that, you must select an asset or the market you wish to trade. The next step is to select the expiry time. This point determines the success or the failure of the trade.
The time allowed can vary from anywhere from 30 seconds to a minute, to a full day, and even to a full year. Then you can move on and select the size of your trade. Continue by clicking on the following buttons: call/put or buy/sell. Finally, you can then check and confirm your trade.
Binary Options Trading at Home for YOU!
In conclusion, even though binary options might seem like an easy way to make some money fast, you have to make sure to take into consideration all the factors that can make your trade a winning one such as types, brokers, assets, expiry times, regulations, and strategies.
