Binary options trading are very famous among traders across the globe, but still people have the doubt whether one can really make money through binary options. If you learn the fundamentals of binary options thoroughly and keep trading with legitimate brokers, you can definitely make money through binary options. Binary options is a financial investment method in which the traders speculate on the future value of assets like Currency pairs, stocks or commodities and call/put based on their speculation. If they expect an asset value to increase, then they will choose a “call” option and if they believe asset value will decrease below strike price, they will choose a “put” option.
Binary options are also called “All or Nothing” option or Digital options since either the trader gets a payout if his prediction is correct or loses his initial investment if it’s wrong. In binary options, traders don’t buy any physical assets like traditional stock or commodities trading but only trade based on speculation of price fluctuations of the financial instruments. Binary options are not considered as long-term investment as each contract includes a fixed Expiry time. The important advantage of binary option is that it has minimal risk as the maximum loss for each trade is pre-determined. Also binary options require minimal investment when compared to stocks and forex trading. Traders make money based on the outcome of every contract and once trade expires, it is settled instantly.
In order to become successful traders in binary options, users have to analyze the market trends and find out the right time to enter/exit a trade position. You can definitely make money if you employ the right strategy and place the trade in right time. Binary options trading are very simple and even novice traders and make money through it without having expert knowledge on financial markets. You should understand how to predict the movement of various assets like Currency Pairs, Gold/Silver or other indices. The risks are less compared to stock and forex trading and at the same time you can reap higher profits.
If you really want to be successful with binary options you should carefully study the performance of any of the assets which you already have knowledge about like commodities (Gold/Silver) or Currency Value pairs etc. If you have good understanding of Gold price fluctuations, you can easily make money by speculating on anticipated performance of Gold. Also, you should trade with a trusted binary platform like 24option, anyoption or banc de binary mobile trading app which are the best platform for beginners.
In order to make money from binary options you should learn how to predict the future performance of various assets accurately. You should keep analyzing the market trends and read various charts. Hedging is not possible with binary options trading which is a drawback when compared to stock/forex currency trading which can give you continuous payoff and allows you hedge your trade positions. You should perform careful market analysis which can be either fundamental or technical analysis in order to come up with trading strategy. Some of the commonly used strategies by successful traders are:-
Trend Trading Strategy
It is good strategy for beginners, and usually trends last only for hours or minutes in binary options. You should carefully watch the market events such as quarterly earnings reports, monthly job figures reports new product launches etc. which will give a clear idea on whether certain asset price will increase or decrease. For instance, Gold/Silver rate increases or decreases based on global market events and by watching the news feeds carefully you can speculate the price trends and place your trades accordingly.
It can be used along with trend trading technique and it implies on the principle that whatever goes up should come down eventually. The market trends will reverse and even-out ultimately and by using this principle you should be able to speculate on future performance of assets.
There are also special tools available in market which can scan the charts on regular basis and come up with price trends. They can automatically execute trades based on the speculation of market trends. There are no hard and fast rules to become successful in binary options trading but only based on experience and knowledge, you can really make money. In order to become a successful trader, you should first make yourself well-educated on various terms and trading strategies.