How To Start Binary Option Trading

Best Binary Options Brokers: 2020 Ranking
  • Binarium
    Binarium

    Best Choice! The leader in our ranking!
    Perfect for beginners!
    Free Demo Acc + Free Trading Education!

  • Binomo
    Binomo

    Good choice for experienced traders!

How to Start Investing in Binary Options

Damyan Diamandiev
Contributor, Benzinga

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If you’re looking for a simple way to trade and invest in financial assets, why not consider binary options? They’re easy to understand and preferred among newbies, so you’ve pretty much already got a head start in the right direction. Benzinga will help launch you the rest of the way.

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What is Binary Options Trading?

Binary traders profit from price fluctuation just like other traders, but binary options have a preliminary stated risk and profit potential. That’s why this type of contract is called a “binary” option. You get one of the two possible outcomes: suffer the risk or profit from the reward.

In binary trading, you bet if the price will be higher or lower after a certain time passes: the expiration. If you’re right, you win. If you’re wrong, you lose. When you lose, you lose the amount you’ve bet in the trade. When you win, you win around 80% of the amount you’ve bet (this depends on the broker as well).

Let’s say you believe the price of the EUR/USD will be higher in one minute and you bet $10. If you’re correct, you’ll profit around $8, depending on the broker. If you’re wrong, you lose your $10.

There’s some specific terminology wrapped with binary options. Can you sell an option? No, but you can buy a “put” option.

This is how it works:

Call Option

You buy a call option when you expect the price to increase. This means you enter a deal where you bet that the market will increase in price.

Put Option

You buy a put option when you expect the price to drop. This means you enter a deal where you bet that the price will go down.

Calls and Puts

It’s easy to understand the difference between “buy” and “sell,” and which corresponds to bullish and bearish markets. However, it might be tricky to remember the difference between calls and puts. Here’s an easy way to remember:

Imagine a phone is on a table. When you want to “call” you need to lift the phone “up,” an increase. When you want to “put” it down, it needs to go downward, or “drop.”

Best Binary Options Brokers: 2020 Ranking
  • Binarium
    Binarium

    Best Choice! The leader in our ranking!
    Perfect for beginners!
    Free Demo Acc + Free Trading Education!

  • Binomo
    Binomo

    Good choice for experienced traders!

How To Start Trading Binary Options

Step 1: Build your strategy

Test different approaches and check which one is profitable for you. You can also combine different indicators to build your strategy. Some indicators could be:

  • Price levels
  • Trend
  • Candle patterns
  • Chart patterns
  • Moving average indicators
  • Fibonacci levels
  • On-chart indicators
  • Area indicators

These are not the only indicators available; there are many more and each of them works in a different way. Match signals from different indicators to reduce the chance of getting a bad signal and incline the scales in your favor.

Step 2: Calculate the returns

Say that your broker will give you 80% return if you guess the right price direction. You risk 100% of the invested amount, a return of 8:10. How successful should your strategy be and where is your break-even point?

Say that you do 100 trades by investing $10 in each. This means that you’ve invested a total amount of $1,000. Your strategy has a 55% success rate, meaning that you will get an approximation of 55 successful trades out of 100.

If you guess correctly, you’ll win $8. If you guess incorrectly, you’ll lose $10. Since you’ll get around 55 winners, this means you will make 55 x $8 = $440. Since you’ll get around 45 losers, then you will lose 45 x $10 = $450.

A profit of $440 – $450 (loss) = -$10 per 100 trades with this strategy, which isn’t ideal.

Here’s another test with the same brokerage conditions: 80% return on a successful guess. Let’s say our strategy has a proven record of 70% success rate. This means we’ll have 70 winners and 30 losers after 100 trades:

70 x $8 = $560 (profit)

30 x $10 = $300 (loss)

Net profit = $260

Step 3: Money management strategy

Don’t forget to factor in luck. If you deposit $100 in your account and you invest $20 in each trade, you’ll likely fail. The reason for this is that you will be able to handle only five losing trades in a row, which is very likely to happen.

It’s safe to have money for at least 100 trades. What is the chance to get 100 losing trades in a row? It’s just like flipping a coin and getting 100 heads in a row: pretty unlikely.

Step 4: Choose your binary options trading broker

Pay attention to some important rules when you choose a broker. There are scam brokers who will not let you withdraw your money, so research in advance. Good brokers:

  • Are regulated and conform to the laws of a country.
  • Have existed for a while. Scam brokers get caught and typically close after a year or two.
  • Have good reviews online. What are people saying about the broker? Can you withdraw your winnings?
  • Offer a variety of trading assets. You don’t want to have only five currency pairs available for trading.
  • Have a friendly interface.
  • Include a rich set of trading indicators. These indicators will assist in your analysis and help you build a successful strategy.

Step 5: Create and fund your trading account

This is the easiest step as long as you have the money! Follow your broker rules for creating an account. You’ll need to identify yourself and to confirm your account, then deposit the amount you are willing to start with.

Make sure you conform to the money management rules we already discussed. If you’re willing to invest $10 in a single trade, this means you’ll need to deposit at least $1,000. This way, you’ll have enough money to conduct 100 trades and you’ll be able to handle an eventual downswing.

Step 6: Execute your first trade

Now you’re ready to go! If you’ve deposited $1,000 in your account, then it is safer to invest only 1% per trade, or $10.

  • Change the investment per trade to $10.
  • Choose the expiration time of the binary option.
  • Do your analysis and apply your strategy.
  • Click “call” if your analysis shows that the price will go up or “put” if you believe that the price will go down.
  • Wait until the binary option expires.
  • Track results.
  • Repeat.

Final Thoughts

Binary options are an innovative and easy way to invest in the financial markets. Rules are simple (that’s why many traders prefer this type of trading) and there is a limited risk per trade, based on the amount you invest.

You’ll still need to conform to the well-known trading rules if you want to be successful. Build a strong strategy, calculate the amounts, manage your bank well and be smart, and you’ll increase your chances of success. A demo account is always a helpful test before jumping in with real money.

How to Start Trading Binary Options

Here is an easy guide to getting started with Binary Options for those of you who are brand new. This will get you set up and put you on the path to trading successfully. For those of you unfamiliar with Binary options, we recommend you read our overview of what they are and how they are traded.

To start trading, follow these steps.

1. Sign up for a Binary Options account with a reputable broker. If you are from the US/Canada or Australia then start trading binary options here.

Rank Broker Min. Deposit Max Returns Features Review
$50 200% + $50 CASHBACK TRADE NOWREAD REVIEW
$100 85% + CYSEC REGULATED TRADE NOWREAD REVIEW

2.Deposit your funds so you are ready to take advantage of opportunities when they arise, but do not begin trading live yet. We recommend starting with a small deposit, not more than between $200-$500 is needed but this is up to you.

3.Set up a demo account, this should be extremely easy with the broker to trade in a sandbox mode.

4.Read our binary option trading tips. This guide is a basic overview of strategy for new traders.

5.Place at least 20 trades in demo mode before making one live trade. At this stage your focus is on getting a feel for the trading platform and entering trades correctly, as well as beginning to develop your read on how the market moves and factors that influence movement.

6.Begin placing live trades, not more than $5-$10 dollars per trade. Remember the goal is not to make a million dollars with one trade, it is to systematically make money over time. You need to start small in order to trade with a clear head, and to work on your strategy without taking a huge risk at this point.

7.Contact us if you would like help with your trading or developing your strategy from this point, remember we are here for a resource to help you learn and grow as a trader. Things to keep in mind: what time of the day are you trading? What are you using to indicate a trade setup? Did you write your rules down and are you following them every time? Are you using larger size when you have more conviction on a trade? Let us know what you are doing and we will help.

This is a guide to getting started. For more advanced strategy read our posts and strategy guides, and feel free to contact us. The more you learn the higher the probability of you making a lot of money, so we recommend it.

Daniel Major

B.S. Degree in Economics and Finance. Professional day trader. Live and work in Manhattan, NY, NY.

10 thoughts on “ How to Start Trading Binary Options ”

There are two ways of learning in Life: learning by doing or learning from others. Learning by doing is certainly possible, but you will spend more money. Why? Because you have to “finance” your losses. You will have – no doubt – a string of losses, until you master the art of trading with Binary Options. Many Beginners take this route. It seems so easy.
Just open an account, fund it and start hitting the buttons. The awakening comes once the account is empty! In order to avoid this and make the journey more pleasant and easy you can use several tools and support systems: Binary Options Managed Accounts, Binary Options Trading Signals and/or a good Binary Options Education.Binary options trading is very easy means getting money online and get rich in no time it all depends on an investment,With a good strategy, a regulated broker that won’t rip and strategy,research and some knowledge on price action, support and resistance you can make very good profits it will bring hug return of profit from this you can be financial free and you wont care about your bills any more with a minimum investment of $300 you will be able to get not less than $4200 or even more if you start with a minimum investment of $500 you will be able to get not less than $7500 if you start with a minimum investment of $1000 you will be able to get not less/Than $18,000 weekly or even more if the market is very profitable. Before getting into binary options you need to have a good amount of knowledge and regulated broker feel free to contact for assistance if you want to start trading binary or info on strategy,softwares, trading or how to trade profitably via email

I’m from Nigeria and I want to start trading binary . How do I get a broker

How to Start Binary Option Trading?

In order to get the highest welcome bonuses from the most reliable binary option brokers online, please open an account by using our links in detailed binary option broker reviews.

You can realize how easy to start binary option trading in a short time such as in 5 minutes and achieve high profits. Additionally you do not need to know the regulations between the brokers and be an stock market specialist!

You can enter the world of binary option trading either by opening a trial or creating a real account. Here you can reach the basic steps of getting strated with the binary option trading.

Specify the Expiration of the Binary Option Asset

After you have chosen your asset, you need to specify the expiration of the asset. In binary option trading the minimum expiration is 5 minutes and the maximum is one month.
In general, binary option contracts do not last less than one hour, but traders are allowed to purchase options up to 5 minutes before the time of expiration.

Direction of the Binary Option Asset

The basic principle in binary option trading is that you make a prediction about which direction the binary option asset will move by the time of expiration. Generally binary option traders conduct technical and fundamental analyses of the assets they have chosen. If you want to learn how to conduct fundamental analyses before your first trade with binary option you can make use of the detailed information on binary option trading in the “binary option strategies” section on our web site.

Choosing the Binary Option Type for the Asset

The next step in the binary option trading is to choose the option to trade your assets. There are three different option types in binary option trading. These are above / below option, range option and touch options. After a successful binary option trading, you can profit up to 75% and 85% depending on which binary option broker you have choosen for trading.
To give some more detailed information on types of options;

Above/ Below option means that you predict if the price of your asset will either increase or decrease by the time of expiration. If you think that the price will increase you need to buy a call option, or you think the price will decrease then you need to buy a put option.

• When it comes to touch option, we see that there are two types of this, called as “double touch” and “no touch

• By the range option you need to decide wheter your asset will stay in or go out of the predetermined range by the time of expiration.

You can find out more detailed information about binary option types on “Types of Binary Option Trading” page.

Binary Option Investment

After defining the general features of your trade with binary option your next step should be the decision on the amount that you need to invest.
With a minimum investment of 10$ or a maximum of 5000$ you can trade binary option.

According to the results of general statistics, most successful binary option traders are those who purchase multiple options which they can trade simultaneously. After opening an account over a binary option broker which you chose on our web site, you can deposit funds into your secure account by using one of practical payment methods, and for the first account opening you can make use of the special bonus opportunities which you can obtain only over our web site.

Waiting for Binary Option Contract to Expire

After this stage, all you need to do is to wait for the expirations of the options for your assets and to collect your gains. Within this period you can follow up the performance of the options through online accounts under the “My Trades” tab. If your binary option expire “in the money” you can obtain an additional return between 75% – 85% on your initial investment.

How To Start With Binary Options? Step-By-Step Guide

All who want to start their journey with Binary Options always search for ” How to Start with Binary Options?” and your question is totally right and you should have complete knowledge about the thing where you are investing your money. Today in this article we will learn about some question which everyone faces when they start their journey with Binary Options Trading.

Topics Covered in this Article?

Here are some of the questions covered which you will face if you start your journey in Binary Options.

  • What is Binary Options?
  • How to read Binary Options graph?
  • How to put a trade?

If you know all this then you are ready to begin your journey with Binary Options. It is very simple to learn you can find learning tutorials at IQ Options website just Sign Up and you can find all basic tutorials about Binary Options. Also, IQ Options is one of the best Binary Options Broker in the current market you can it’s detail review here.

What is Binary Options Trading?

Binary Options Trading is a “Yes” or “No” trading in which you bet for a certain stock or currency pairs in which you decide that if price will go up after certain period of time then you “Buy” and if you think that it will go down after certain period of time then you put a “Call”. Let us take a live example so you will understand better:

  • Let us do Trade on EUR/USD currency in this example current price of a currency pair is $1.06361.
  • You can see there is two option either you have to choose EUR/USD price will go UP or will go DOWN. There is also purchase time shown before that you do the trade of any amount you wish to put either $100 or more.
  • Once you place the trade of $100 you will see remaining time “Purchase Time” and “Expected Profit” on the upper right corner.
  • Once the trade is close the result will be shown whether you have made a profit or not.

You can see that we have won $90 in just 1.5 minutes so it is easy to trade on IQ Options so go for it.

How to Start Trading Binary Options?

Trading binary options open up new opportunities and widen financial horizons. Anyone can trade binary options. Most of us are afraid of change but change and growth are the energy of life. Change is inevitable. We can accept it or we can resist it. Pocket Option embraces changes and helps our users to explore opportunities binary options trading. There are multiple types of binary options available to trade. The simplest and by far most common trade is the Up/Down trade. Do you want to become a trader? Are you trading and looking for a new platform? Join Pocket Option and become an experienced and successful trader!

Where to start if you are a beginner?

Start with a demo account from Pocket Option. At Pocket Option, we offer to our new traders a demo account where they can test their strategies. We also offer advice and recommendations from our well-known and popular brokers. We offer a generous list of indicators and oscillators so you can successfully increase profits and reduce your risk.

Despite the fact that the advertising given by brokerage companies assures you that you can get a stable profit from the very first days, nevertheless, it is not so simple here. Therefore, before starting to engage in trading, a beginner must undergo appropriate training. And for this, we need a system. Otherwise, you simply get confused in the amount of information that is now available on the network.

If you already know the basics, you still need to read about the indicators, oscillators and strategies. In this article, you will find a step-by-step guide that will help you start trading on binary options if you are a beginner.

How to Start Trading Binary Options?

So, you decided to start trading? Congratulations! We recommend you take the following steps:

  1. Get some basic training in trading. Learn more about:
    • Types of binary options;
    • Types of technical analysis and strategies;
    • Types of charts and indicators;
    • Trading terminal;
    • Risk management.
  2. Find a trading platform. There are so many platforms that offer a demo account and do not set high limits. Pocket Option is one of the most popular trading platforms.
    We also offer many educational materials so you can also make a sensible decision as a beginner and start trading now. With us, you can start here with just $ 10, and the minimum amount is $ 1.
  3. Develop your trading strategy. Trading is not gambling, so you need a trading strategy. Test it on your demo account. A strategy is considered working if the profit is 70%.
  4. Find your psychology. No strategy works without psychology if you want to become a successful player. Real trading is very different from the demo. Therefore, it is recommended for beginners to start trading on a minimum deposit.
  5. Find your trading system. A trading system is a set of rules that you make for yourself. It is the basis for your trading, money management and strategy.

What beginner traders should know?

Binary options are a simple option contract with a fixed risk and fixed reward. The options are called binary because there is a “one or the other choice.” The choice is up or down; touch and no/touch.

Some key things you should remember before you start trading binary options:

  • Your risk is limited to your trade amount.
  • If you make losing trades, you lose your trade amount.
  • There is some risk involved. Apply strategy to manage it.
  • You never own any assets. You only trade in the direction of price.
  • You have to win the majority of your trades to make money.
  • Up/Down is only 1 type of binary option, there are many others.
  • Trading binary options is designed to be easy and transparent.

A trader chooses an asset (a stock, commodity, currency) and trades if it is going to go up or down in a certain amount of time. You bet money on your prediction. You know how much money upfront you will earn if your prediction is correct. If your prediction is wrong, you lose your bet and the money risked. If you predict correctly you get your money risked back plus a return. The returns usually are 70-85%.

Join the Pocket Option family of traders, learn some basics and test your strategy with the demo account before you start trading real money. Good luck on your way to success and financial independence!

Best Binary Options Brokers: 2020 Ranking
  • Binarium
    Binarium

    Best Choice! The leader in our ranking!
    Perfect for beginners!
    Free Demo Acc + Free Trading Education!

  • Binomo
    Binomo

    Good choice for experienced traders!

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