Binary Options Trading for Dummies – The Complete Beginner; s Guide

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Binary Options Trading Guide.
Welcome To Our New Traders “Dummies Guide” On The Basics Of Binary Options Hi and welcome to the BinaryTrading.org’s New Binary Option Traders Guide. This page covers the basic but important facts about binary options you need to know before you begin trading. It is a good idea to bookmark this page as you will likely reference it in the future. Here is an outline of the things you will learn.
What is a Binary Option? Types of Binary Option Trades Available Basic Strategies Tools You May Want List of “Things To Know” Example Trades Getting Started.
What Are Binary Options Themselves.
Binary options are very simple option contract with a fixed risk and fixed reward . These options are called binary options because there is a “one or the other choice” and binary options login a one or the other payout after the option expires. One or the other choices include up or down, or touch and no/touch. In computer code binary means 1 or 0, or one or the other. [scg_html_rbox_marketsworld] The way a binary option works is from the traders perspective (yours) is that you choose whether or not a certain underlying asset (a stock, commodity, currency etc) is going to go up or down in a certain amount of time. You essentially bet money on this prediction. You are shown how much money up front 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. These returns usually are between 70-85%.
A brief example would be that you predict the price of gold to rise from it’s current price of “$1612.75” one hour from now. The winning trade offers a return of 80%. You place a $100 trade on this idea.
One hour from now the option contract expires (closes) and the contract is graded as a “win” or a “loss”, or “in the money” / “out of the money”. Gold goes up to $1613, you predicted correctly. You get your $100 back and a return of 80% – or $80 for a total of $180. Even though gold only went up a tiny amount, you still earn the 80% return. Magnitude of price movement is not a factor in the amount of your return.
Key Ingredients Of A Binary Option Trade All of the different binary option contracts have these three key ingredients that traders need to take note of. They are the expiry time, the strike price, and the payout offers.
Expiry Time Strike Price Payout Offer.
The expiry time is simply the length of time from the moment you ‘buy’ the option contract until it closes. This can be as fast as 60 seconds or as long as a month. The majority of traders are trading the short term binary options, anywhere from 60 seconds to 30 minutes.
The strike price is the price that you were able to enter the trade at and this is the price that determines whether or not your trade is a winner or a loser. In the brief example above, the strike price is $1612.75. This is the price that gold needed to close at above in order to win this trade.
The payout offer is the return that binary option broker is offering to you. In the gold trade example above, the payout offer was 80% for a win and 0% for a loss. Some trades do have a return percentage for losses, typically up to 10% although this is broker and trade dependent. The payout offer is known up front before risking any money.
Types Of Binary Options Available There are of binary options available to trade. The simplest and by far most common trade is the Up/Down trade. You can learn about the different types of binary options available to trade here.
Beginner Strategies We have compiled a list of basic binary option strategies that will help you get started making higher probability trades.
Tools You May Want To Use.
I am going to beef up this section as new tools arrive on the market to help you make your trades. For now you can review some of the binary trading signal services on this page.
Key Things To Know About Binary Trading.
So now you understand the basics of trading binary options. Some key things you should remember before you dive in are these:
Your risk is limited to your trade amount The minimum trade is as little as $10 You do pay for losing trades – you lose your trade amount (or the majority of it) There is plenty of risk involved. Never ever invest more with a broker than you can afford to lose. It’s risky! You never take any ownership of the underlying asset – you only “bet” on the direction of it’s price movement To make money over the long term you have to win the majority of your trades Up / Down are only 1 type of binary option, there are many different kinds of trades available to make with binaries Trading binary options is designed to be easy to do.
Your risk is limited to the amount you place on the trade. Your payoff is clearly stated befo