Don’t know about others, but when I was a new runner, asked different traders how to trade binary options without losing money. Even today, beginners, including our readers, frequently asked questions.
It’s scary and curious at the same time.
So, we aim to give you a proper solution through this article.
Binary options is widespread because of its simple trading nature. On the other hand, you will get a fixed return percentage.
It is surprising how people are willing to trade options day by day. However, profitability boils down due to a lack of trading knowledge or experience or choosing the wrong broker. But whatever the reason, you must have a clear plan before trading. As a result, you don’t face ill consequences in your trading.
Before enlightening you with the step-by-step guideline on how to trade binary options profitably, we will first explain what binary options are.
In this phase, we will illustrate the introductory words on binary options. If you would like to learn more about binary options trading, read our what is binary options trading article that explains everything in detail.
Binary Option is an investment type where you have two outcomes, all or nothing. Additionally, it has a fixed expiration date.
You have to accurately predict the outcome with an expiry time to make a profit. Either you will win a trade or lose all the money you have invested for a particular trade. Moreover, you can perform binary trade in two ways.
In manual trading, you do all the hard work and place the trades yourself using trading strategies. But in auto-trading, automated trading software does the trading for you, using a built-in trading strategy.
Which method you use for trading depends entirely on your preference. If you are a new trader, you might take help from a trading robot in exchange for a price. Or you can learn the basics of trading and do it yourself.
You already know through our citation that binary options give you a fixed payout and loss amount. To power up your trading journey, you must follow some rules.
Before jumping to those specific points, we will try to connect your existing knowledge with a small example.
James Chen from Investopedia explains binary options trade with the help of an example.
Assume stock XYZ is currently trading at $64.75. A binary option has a strike price of $65 and expires tomorrow at noon. The trader can buy the option for $40. If the price of XYZ finishes above $65, the option expires in the money and is worth $100. The trader makes $60 ($100 – $40).
If the option expires and the price of the stock is below $65, the trader loses the $40 they put into the option. The potential profit and loss, combined, always equals $100.
Trading doesn’t need any spell to remove the curse. It requires the best strategy based on the market.
Winning a trade won’t make your strategy stand out. Cause it’s possible to lose more than you expected the next day.
Losing trade is quite common. Don’t be disappointed. If you follow the below noteworthy steps, you could win every trade in binary options.
Here are the five significant steps:
As each step is mighty, o our recommendation is to read each step without skipping.
Choosing a broker without evaluating some factors can bring disaster. On the other hand, the retail investment market is large and have a lot of scopes. According to a report of SEC,
approximately 7,600 investment advisers registered with the SEC that serve retail investors, with over $12 trillion in retail client assets under management, and approximately 34 million clients.
Isn’t it crazy!
The actual craziest thing is that one has to choose one or more than one broker from thousands. Here, we will mention some factors that you should keep on mind before selecting any broker.
In addition to that, you refer to our list of binary options broker. It’s not necessary that you have to stick to one broker. No broker is perfect, and one broker may not suit all your needs. Don’t hesitate to trade with multiple brokers.
Taking all the above factors into consideration, we have prepared our list of recommended brokers that you can trade with.
These brokers meet all the requirements such as regulation, offering a demo account, huge asset index, high payouts, fast withdrawals, easy-to-use trading platform, and much more. Here is the list of brokers Binary.com, IQ Option, and BinaryCent that we think will offer you the best binary options trading experience.
The trading market is unpredictable and changes every sec. Three main types of analysis bring an optimal trading result.
Here, an economic calendar works as a ground from where traders use data to forecast the market movement. As there is “no” best method of analysis, so you have to pick the most viable option depending on time-frame and asset information.
Registering an account is free of charge with most brokers. All it takes is your vital information, such as an email address your first and last name. Once you have created an account, you need to practice trading through a demo account.
Train yourself with the help of a demo account until you create an unbeaten situation. Educate yourself on the basic concepts of binary trading. Understand what strike price, expiry time, call, put option, etc. Familiarize yourself with the different ways you can trade binary options.
Just because the funds and the outcome in demo accounts don’t hold any real meaning, it doesn’t mean you should trade recklessly.
Trade on the demo account exactly how you would live trade. This practice will develop your trading skills and build valuable experience.
There is no fixed duration on how long you have to practice on a demo account. Take as long as you need. Finally, you can step up to real trading when you feel confident enough.
The initial deposit amount varies from broker to broker. You need to deposit in the trading account to carry out live trading. On the other hand, there is a big difference between an investment and a deposit.
An investment is a price that you pay to get the future value. Meanwhile, the deposit is a certain amount of money that one needs to open an account.
It is wise to start with a small deposit of $10 to $20.
You can start trading on a real account once you are familiar with the ins and out of binary trading. Select your preferred asset and choose your investment amount. Depending on your prediction, buy a call or put option.
Place your trade, and wait until your trade expires.
A binary option is a contract between two parties. And the outcome depends on your prediction. Either you will go for yes or no.
If your prediction is correct, you will get your invested amount with a pre-determined return. The return percentage depends on the broker. However, the ratio is approximately 70%-100%.
For dummies, it is wise to pick any comfortable assets. You will find hundreds, but focusing on one or two is a good option. Do not pull the gear too fast. Analyze and select a broker that fills your needs.
Remember,
– Trading is a riskier game
– Demo account is a savior
– Overtrading could suck your blood
– Start slow with a small amount
– Develop a strategy
– Maintain a solid trading journal
– Analyze the market
We already discussed a few steps above. Those steps are the principle that one trader should follow whether he is professional or not. After that, you need to turn your binary options trading into a successful profit machine.
Don’t miss out the chance by skipping points that we covered below.
Follow these tips to ensure you don’t lose money while trading binary options.
As you can trade with a large number of assets, choose those assets that you are most familiar with. Do not take unnecessary risks by investing in markets you cannot predict.
There are multiple trading classes. You can choose one or diversify based on your depth of trading knowledge.
Successful binary trading depends on how well you can predict the market. Follow the market news before executing trades.
Diversification of your portfolio is one way of reducing your overall trading risk.
But it doesn’t mean you should diversify to assets that may not be profitable to you.
You may have heard about the risk management where you have stuck on either the 1% or 2% rule. It is a general rule of thumb for traders.
90% of traders failed in trading because they lacked knowledge of money management. Investing a considerable amount of money will not help you to increase profits.
So, at first, start with a small amount like $10. After gaining valuable experience, you can start increasing your trade size. No matter how much you practice on a demo account, trading on a live account is a different scenario. As there is real emotion involved, which brings us to our next point.
Professional traders are not super-human. They also fight to control their trading emotions. Eventually, all traders must go through a cycle of market emotions.
Controlling emotions is not a skyrocket. However, you will find a difference in the gratitude of a winning trader and a losing trader. No wonder a low expectation level can save you from a massive failure.
Stop dreaming about getting rich quickly and follow the 7 secrets that will help you to improve your trading emotions or psychology.
It may seem like a matter of preference or a trivial issue, but even expiry time is a crucial factor in binary options trading.
For example, a trend was supposed to reverse within an hour. But if you placed a trade with 2-hours expiry, the trend would have reversed by then. And, you had lost the trade.
Whatever underlying asset you may trade, you need to be informed on the latest global events, and news associated with that asset. Many traders build strategy depending on the market news. So don’t skip on that, and act accordingly.
For example, if there is negative news regarding the gold and a price drop is imminent, log in to your binary options trading platform, and open a put position on gold.
Reacting appropriately to market news can bring in more trading success than you think.
Unless you are a pure gambler looking for absolute results, you should make use of hedging. Hedging is a money management strategy used to protect your profits. In this way, if you are wrong on your prediction, you lose money from your call option, but you regain that back from the put option.
Protecting your investment by buying a binary option contract opposite to your initial contract is hedging. Hedging may reduce your overall profit potential, but it also protects your capital.
If you quite confident about your prediction but still want to hedge, invest the lesser amount in the hedge position compared to your main position.
Trading education is one of the big factors that play a vital role in success. You need to constantly educate yourself with trading knowledge. Even though binary options look easy and simple, there is a lot that goes into constantly turning your trades into a profitable one.
Moreover, you are less likely to commit mistakes and perform better trading analysis when you are equipped with trading knowledge.
Expertise isn’t easy. They had many flaws. An expert trader took half their time to analyze the market and build a killer strategy to pull the highest from the trading market. There are no sticky rules.
If you want to ensure your trading success, you need to know your exact goal. You can check these 7 tricks that help you to find out how to trade binary options professionally.
The four strongest emotions in trading psychology are always at the core of successful trading.
In order to earn a consistent return on your investment, you must continue to trade for a more extended period. Take time and understand the market.
There is a difference between core forex trading and binary options trading on forex. However, options trading on forex is one of the simplest methods to make money. You just need to follow a few steps to close the position.
Let’s say you choose EUR/USD. In just 60 seconds, you predicted that the EUR price would rise against the most volatile asset, the USD. Set the trade amount to $100 and wait for the result.
If your prediction is accurate, you will get a fixed return on your investment with the investment amount. But if it turns out wrong, you will lose everything you invested.
You heard about cryptocurrency, right? One man, one brain, and a profitable coin.
Digital currency or crypto is a fascinating market in the trading world. There is no doubt that bitcoin is one of the most popular assets available to binary traders.
Binary options traders can trade bitcoins in two ways:
That means you can trade binary options in Bitcoin.
Experienced crypto traders can make money with bitcoin binary options. However, you might have difficulty making money without an effective trading strategy.
Bitcoin binary options trading method is similar to regular options trading. You need to predict the price correctly to get the predetermined payout with the initial investment. One wrong move could drain your money.
So,
Now you can at least hope for winning trades.
Binary options bless you with multiple advantages. You can trade your favourite trading instruments without owning the underlying asset. And it is one of the tremendous benefits of options trading.
Having solid stock market knowledge will definitely be beneficial to you. Though the trading form is simple and elegant, having a clear understanding will boost your earnings.
Let’s learn how to trade binary options on the stock indices market:
– Know the market trends. It is necessary because a correct market trend will help you to create an accurate trading strategy
– Pick the underlying asset you want to trade. Remember, the list will show you the payout percentage in advance
– Select the strike price
– Select the expiration time
– Place your trade
– Wait for the expiration period and get the result
Gold binary options are a type of option where the payoff is either a fixed amount of gold or nothing at all.
It’s a volatile commodity, so its price can fluctuate a lot. Understanding the risks involved in gold binary options is also important. This means that there’s a chance you could lose money if you don’t know what you’re doing.
There are two main types of options when it comes to trading gold. They are called call options and put options. Generally speaking, call options to give you the right to buy an asset at a specific price. In contrast, put options give you the right to sell an asset at a particular price.
Accordingly, if you believe gold will rise in value in the future, you will purchase a call option; if you believe it will fall in value in the future, you will buy a put option.
When trading gold binary options, it is essential to comprehensively understand gold prices and how they are affected by various factors. Like
– Economic factors such as inflation, interest rates, and geopolitical events
– Technical analysis
– Chart patterns and trends can be used to identify potential opportunities.
60-second binary options is a strategy that is widely popular among traders. It is the shortest trading period, but it is the most profitable. However, it is also a high-risk form of trading. So, traders need to take extra precautions.
Sadly, there is no “best way” to trade this form. If you want to succeed in this incredibly challenging format, you will need a solid strategy, steely nerves, and a healthy appetite for taking risks.
Additionally, we have explained using simple terms what 60-second binary options trading is. Also, the article will help you to clarify your mess on
Apart from these, it would help if you were more patient in handling your trading emotions.
Traders rely heavily on economic calendars as one of their most powerful tools. With the help of an economic calendar, traders can figure out past market history, including upcoming events and news.
For those who are trend traders, it is just working as oxygen. The economic calendar includes,
– Time of news release
– Upcoming events
– Fundamental indicators
However, this type of trading strategy is usually suitable for mid and long-term binary options traders. Beginners can also trade, but with care.
If you want to know how to trade binary options using the economic calendar, here are the steps:
– Select an asset
– Check the economic calendar
– Check if there is any upcoming news available or not
– Click the links to read a summary of the news
– Plan the strategy and execute it accordingly
Meta Trader 5, or MT5, is a third-party trading platform. It is the most comprehensive global trading tool with an extensive platform with thousands of trading indicators and tools.
Here’s how to trade binary options using this MT5 platform.
To know more about this platform, read this MetaTrader 5 Tutorial article. The article will give you an ultimate guideline for using this platform.
You can either manually trade binary options or can use binary options software, which will do the trading for you.
When you trade manually, you choose the asset, the expiry time, and most importantly, the decision to call or put. Everything depends on you alone. Moreover, you have to set a strategy using indicators and trend lines to decide.
In the case of automated binary options trading, a binary robot does all the work for you. It is a programmed software that makes decisions based on specific algorithms.
On the other hand, most binary options robots allow you to customize settings such as investment per trade, risk level, indicators, and choice of assets.
However, if you want to altogether leave your fate at the hands of the trading robot, you may do so. Or you can put manual effort also by building strategy.
We would recommend a mix of both auto and manual trading for the best results. We have compiled and reviewed the best binary option trading robots for you.
Moreover, the following trading robots, BinBot Pro, Binary.com Auto trading Bot, and DBot, are our recommended trading bots to give you the highest profit percentage.
Binary options have earned a bad press due to the actions of many scam brokers. However, there is no doubt about the legitimacy of binary options. It is a proven method of trading that brings profits in a short period.
It takes a lot of factors to be successful at binary trading. The purpose of this article was to educate new traders, on how they can maximize their profits in binary options trading.
To succeed in binary options trading, you need to learn how to trade binary options. There is no alternative or shortcut. Put time and effort in educating, and then practice what you have learned.
This post was last modified on July 7, 2023 6:53 pm