How to Trade on Binary Options – Share our Secrets - How to Trade on Binary Options — Share our Secrets

Binary options allow you to make up to 90% of your investment in one minute. Most beginners lose because of them. On the other hand, many Forex traders make hundreds and thousands of dollars from them. Let’s find out what digital options are and how to master binary trading.

How to trade on binary options with Profitcoin?

Binary options are short-term digital contracts with a fixed premium and loss. They are remunerated after the main condition of the contract is met. Usually it is a correct forecast of the price movement of the underlying asset.

Essentially, binary options are a betting transaction. For example, a trader bets $100 on EUR, the rate of the underlying asset, for 5 minutes. The premium for a correct forecast is 50%. The trader presses the “Call” button. If the EUR exchange rate rises by at least 1 minimum point within 5 minutes, the trader will earn $50. If the forecast is wrong, he will lose the whole bet – $100. And you can start trading binary options on the website

Deals with digital options seem simple at first sight, but to work with them you need to understand their peculiarities.

Underlying assets for binary options are currency pairs, indices, commodities and stocks.

In binary options the direction of the price movement of the asset (rise or fall), rather than the difference in the rate change, is predicted.

The call-option is bought at the forecast on rise of the price, put – on fall.

Expiration – the term of binary contracts varies from 30 seconds to 1 year.

The buyer of an option can choose the type of contract, the type of underlying asset, the amount of bet, the expiration date. Such conditions allow finding out the profitability and assessing the risks in advance.

How do I start trading with binary options?

Trading starts with the creation and depositing of the broker account. Before that, a beginner can master the theory of binary options trading. For example, by attending courses, reading books by famous traders, working on a demo account, etc. In a simplified form, the beginning of trading implies such steps as:

  • choosing a brokerage company;
  • registration, deposit and verification (is required for the withdrawal of earnings);
  • selection of an underlying asset, analysis of charts, identification of factors affecting the value of assets;
  • choosing the type of options, the amount and the expiration;
  • forecasting price movements on charts by means of technical, graphic analysis;
  • making a trade, profit or loss.

And one of the best ways to get started with binary options is to register on the website

Most binary options brokers allow customers to trade after making a minimum deposit of about $100-300. Such amounts are usually set by the financial regulators of brokerage organizations. Companies without licenses allow clients with $5-10 deposits to trade.

It is very important to choose the licensed brokers. For example, in Europe, broker companies are licensed by CySEC, MiFID, FCA and other organizations. The license proves that there will be no problems with the safety of the deposit and the withdrawal of funds. Mandatory procedure before the withdrawal of money is verification – sending a scan of the passport, other documents etc. 

How to Learn to Trade in Binary Options with Profitcoin?

Binary options trading, as well as classical trading, is based on stock analysis. Analytical methods allow forecasting the price on a certain asset. Profitability of each deal depends on exactness of forecasts. Without the analysis binary options trading reminds gambling or guessing.

There are three basic methods for predicting prices:

  1. Fundamental analysis is based upon studying the effect of economic events and news on asset values.
  2. Graphical analysis is forecasting based on price chart patterns, such as reversal figures and candlestick patterns.
  3. Technical analysis – making predictions with the help of technical indicators. For example, moving averages, stochastics, Bollinger Bands, etc. Indicators are placed on a chart and indicate the direction of price movement.

Binary options trading is largely based upon technical and chart analysis. Live charts are the main analysis tool, transmitting the quotes in real time. To be successful in trading, a beginner must learn to understand candlestick, line and bar charts.

Experienced traders develop their own strategies – unique techniques for obtaining signals to open trades. Finding a successful strategy is the main task of beginners in the first months. It is important to remember that there is no method that brings profit 100% of the time. It is better to have several strategies for working with trends, sideways and reversals.

How to trade binary options correctly? Our simple trading strategy

Successful binary options traders use risk management and money management. These are sets of rules that allow reducing risks, preserving and increasing capital. Newbies very often violate these rules, so they lose their deposits. To minimize trading risks you can use the following scheme in binary options:

  • determine the optimal amount of the contract;
  • calculate the allowable amount of losses per trade, but usually in binary it is known;
  • analyze the ratio of profitability to risk;
  • decide how to limit the risks.

To make calculations, a trading yield calculator is used, which greatly simplifies the process. It is important to understand that high income is always associated with increased risks. That’s why it’s better for beginners to choose deals with low or average profitability. The sum of one transaction should not exceed 5% of the deposit. Losses shall not exceed the set limits.

For diversification of risks traders distribute investments on several deposits at different brokers. Before each entry into the terminal they set a specific target. They also use at least 2-3 strategies for different markets. Experienced players never seek to win back, because they do not succumb to irrational emotions.