Guest Article by Peter Traychev of ActionBinary
You are interested in binary options trading, but you don’t know where to start? Here is a short guide on the basics of binary options.
1. Choose a broker.
There are many brokers offering binary options. Before you pick a broker, research what binary option types it offers, its terms and conditions, and if the broker offers any bonuses. Also check out what platform that the broker offers, if it’s easy to use and if you feel comfortable with it. When you choose your preferred broker, open an account with it and deposit funds. Generally, most brokers require only a small deposit for you to begin trading.
2. Practice makes perfect.
Many binary options brokers feature educational materials on their websites which include video trainings, free ebooks and even live support. Also some brokers provide free demo accounts, which allow you to trade with virtual money. This way you can learn how to trade, without actually risking any real funds.
3. Pick an asset.
After you deposit money into your account, it’s time to decide which asset you want to trade. You can choose from a wide variety of assets such as: commodities, stocks, currency pairs and indices. Check out the broker’s website for a full list of the assets it offers.
4. Choose how much you want to invest.
The next step is to determine how much you want to invest when trading binary options. Each broker has its own requirements for the minimum or maximum trade size you are allowed. Generally, a trade size can be between $ 1 and $ 3000.
5. Predict your asset’s price movement.
Now comes the most interesting part in binary options trading – will your asset’s price increase or decrease? At this point, you have to decide in what direction the price will go at the time of expiry. You can use a technical analysis or system to help you make your prediction.
6. Choose your expiry.
Each time you place a new trade you have to select when you want the option to expire. Depending on the broker, you can pick an expiry time which can be: 60 seconds, one hour, day, week or month from now. At the time of expiry your option will close automatically, and there are two possible outcomes, your trade is either a winning or losing one.
7. Make high earnings.
If your trade is a winning one, you can get a return as high as 60-80 % of your initial investment. On the other hand, if your trade is a losing one you will lose a large part or all of your investment. There are binary options brokers that offer ‘loss back’, for example 10%, of your initial investment if your trade is a losing one.