How to Master Binary Options Trading
Mastering the binary options field is not hard at all; let’s start with an explanation about binary options. Binary options trading is a method of trading the financial markets. When you are trading in stocks, you simply buy a stock and expect it to rise, if the stock price went up by 10%, you can sell those stocks, which would give you a 10% profit. (Not including the costs associated with taking the position). They time it might take is unknown, and you can find yourself holding this position for more than you have expected to. So in order to create a 10% profit in stock trading, you simply have to buy and wait for the stock to rise by 10%.
Master Binary Options Trading
Any trader who wishes to master binary options should know that binary option is an option that allows a trader to speculate how an asset would perform during a certain time frame, if it would rise or fall in value. So if you think that the price of Oil is undervalued you can buy a call binary option on the Crude Oil and set the expiry date, to the time at which by then the price should correct higher. All that is required for this option to win is that the price of Crude Oil rises comparing to the entry price. The entry rate is the price at which the binary option was bought and the expiry rate is the price upon the expiry of the option.
So if you decide that the price of the Crude is undervalued and that it should correct itself during the following week, you simply buy a 1 week Call binary option on the Crude Oil. When entering the details for the position, you would notice that there is a payout rate and a refund rate showing. The payout rate is your expected profit in case the option expires “in the money” and it usually varies from 60% and can reach around 90% for the normal above below binary options. The payout for more complex binary options such as the touch binary options is usually higher since there is the need to be correct about both the direction and amplitude of the price shift. The refund rate is the amount you would be left with in case the option expires “out of the money”.
To master binary options one must understand how volatility and liquidity levels affect the prices at which various financial assets are traded. The volatility is simply a measure for variation of price of a financial instrument over time. If you are trading stocks than high volatility levels might frighten you but if you are trading in binary options, higher volatility levels means, prices for this asset shift quit rapidly and it might offer possibilities for good binary options trades. Liquidity levels shows how easy it is to sell a certain asset, the higher the liquidity the easier it is to sell that asset without having to reduce its price by much. The higher the liquidity levels for a certain asset, the less likely it is for its price to change drastically in the near future. Traders who master binary options trading would increase the validity of their binary option trades when liquidity levels rise.back to menu ↑
Practice Binary Options Trading
You should practice binary options trading before you start trading with the big dogs! Binary options trading are not just for the wise guys anymore, it is for people just like me and you, people who are ready to invest time and capital to improve their financial status!
Binary options trading are a great way to supplement your income and build a nest egg for your future! It is a predictive market, where your job sums up with estimating whether the price for a given underlying asset would end up above or below the current price level at a certain time in the future, this time frame can be as short as 60 second from the current moment or as long as the end of the hour (a round hour), the end of a trading day (also known as a trading session) the end of the trading week, trading month and so on up until the end of the year.
Have you ever heard the phrase, “practice makes perfect?” Well, that goes with everything that you do in life and it is also correct with binary options. If you are risking your money wouldn’t you rather know how binary options trading works and what each term means and what the binary options brokers do? That’s when you need to practice binary options trading.
Do you study for the big exam at school? This is pretty much the same thing. Practice binary options trading and you will open the door to many things that can help you earn more money for you and your family. It would also reduce the involved risks.
As with anything you do in life there are so many new things to learn about binary options. If you conduct a proper research you will find that many people (binary traders) both novice and seasoned investors, have gained many profits while using a binary options trading platform. This is why it is so important for you to practice binary options trading before you actually engage it.
The biggest advantage that binary options trading can offer is the simple fact that you can do everything online in real-time. You do not even have to leave the comfort of your own home. If you have to leave the house for work or run errands there are binary options mobile applications that will allow you to keep track of your trades via you iPhone and other compatible devices.
You will need to practice binary options trading because you will want to know how to pick and choose the information that is highly relevant to the asset which you are about to trade and what information you should neglect in order for you to have a better chance in making a profit. Be honest with yourself, do you actually know how to spot a good trade just by looking at it?
Once you become more confident because you did practice binary options trading and became pretty good at it; now is the perfect time to trade on your own and to test the waters. The practice trading with binary option would allow you to hit the trades with a vengeance armed with knowledge.
Practice binary options trading will help you to learn which brokers are safe and secure and are not scams that will just take your hard earned money. You will learn what amount of fees should be charged and should not be charged for your account. You will want a site that will allow you to see your daily activity without charging you tons of fees.
The experience from practicing with your options and what brokers to use will help you in the process of choosing your broker. You can begin this process by asking your intended broker some questions and seeing how fast they get back to you, this would reflect on their response time and whether they would be available for you in the future. The quality of their support is very important, when you are a trading the financial markets, you do not want to wait too long for help. Most brokers will contact you by phone, email, and sometimes by chat 24/7, look for a broker that responds to your call within the same business day.
With the practice under your belt you will be able to make an informed decision about the binary options broker you want to trade with as well as which are the assets that you would like to trade on. There are many brokers and various assets that you can choose from, with the main assets groups being commodities, currencies, stocks, and indices.
Remember, knowledge is power!