Binary Options Day Trading - How to Start Day Trading Binary Options in South Africa

Day trading binary options

June 29, 2021

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Day trading binary options 

What are binary options

A binary option is a transaction in the financial market in which the player makes a prediction and bets money on it. If the prediction is correct - the player makes 65-97 percent profit, if not - he loses all his money.

What is Day Trading?

Day trading or zero-day trading is a strategy, which implies entering and exiting positions within one day. A player opens and closes positions within one day. Carrying over to the next day is excluded. 

Binary options on the IQ option trading platform
Binary options on the IQ option trading platform

Types of binary options:

       Up/Down (High/Low) 

       In call/put binary options the trader will guess if the price of the underlying asset at the time of the contract is above or below the strike price (that is the value of the asset at the time of the contract) and this is the easiest type of binary options to use. It is used by all traders, including beginners. Up/Down binary options can earn up to 90 per cent (everything will depend on the broker and market conditions).

      In/Out (Range or Boundary) 

       Another really popular kind of option. Almost every broker offers it. Many traders of binary options with pleasure earn on "the Border". "Range" works very simply. In this mode, the broker offers the trader a choice - whether the price of the asset will be in the given range at the moment of completion of the trade or will be beyond the range. The trader makes a prediction and, depending on the result, either makes a profit or loses his investment. 

     One Touch 

       This kind of option implies that the broker will determine a rate and the investor will see if the rate is touched or not. 

     No Touch 

       While in One Touch trading, the trader needs the security price to touch a certain level, No Touch involves the opposite. The only way to profit is if the price at any time prior to the Expiration Time does not reach the level shown on the chart. The profit depends on the distance of the target price. The further away it is, the lower the payout percentage. 

 Ladder 

       Binary options ladders are the most insidious kind and present the possibility for the trader not only to predict the direction of the asset price movement, but also try to predict how far the quotes have moved during the expiration period. For this purpose several price levels are set on the trading platform. As each level is passed, your profit on a trade will increase.

              Such binary option has several features:

  1.      It allows the trader not to lose money in case of an unexpected trend reversal, provided that the quotes have managed to break through at least one set price level;
  2.      Gives the trader the opportunity to earn extra income if the price of the asset passes several levels;
  3.      Gives the highest profit and in some cases it can exceed 700% of the initial bet.

The tricky thing about trading binary options "stairs" is knowing how to stay calm and calculate coolly. This is especially true for beginning traders, who are quick to lose their heads when they see returns of 600%.

Expiry Times 

It's very simple - this is the contract expiry time, (the time when the bet is valid). At the end of this time the outcome of the prediction is checked and the outcome of the operation is determined: in profit or in loss. 

Types of options by expiry time:

The BO market distinguishes between different categories of expiry times. Accordingly, options are divided into the following types:

  1. Short term (turbo) - from 30 seconds to 5 minutes. Traders who participate in the short-term options and make the maximum number of deals during the trading session are called scalpers and the trading operation is called scalping.

The advantage of such options is unlimited number of deals during the session, as well as higher profit percentage assigned by the broker. However, this type of operation is the most risky, as market noises can occur in the price movements, preventing the identification of short-term trends.

The best of course is scalping with martingale method, then you can receive really super profits, but you need a big deposit.

  1.  Intraday trading. The contract execution time is 5 to 30 minutes. The advantage and difference from the previous type of options is that in this case you can use not only charts with strategies, but also observe the dynamics in a wider range of changes.

The stability of the operations is related to the possibility to anticipate the situation more accurately, because you have more time to analyze the market situation and to see the signal of your strategy more accurately.

The number of trades during a trading session is also not limited, and the percentage set by the broker is rather high. Market "noise", which influences the decision, is still present.

  1. Normal. With such expiry time the trader gets help from the platform tools: indicators, charts, analysis strategies.

The number of deals during the trading session is limited. This strategy is suitable for situations where it is necessary to reduce the risk of losing. At the hand of the participant of the option there is a news flow, working with which you can understand the mood of the market.

The following tools can be used:

- fundamental analysis,

- technical analysis.

Forecast by taking into account all data is the most accurate, which allows you to maximize profits.

  1.  Long-term options last from one day to one year. Engaging in these types of transactions requires experience and detailed knowledge of market analysis methodology.

Longer expiry times are usually best chosen when you have a large deposit, because you have to wait a long time for the forecast results.

The downside of this type of operation is that not all brokers support long term trading on their platforms.

Technical analysis for binary options day trading

Technical analysis is multifaceted, it includes charts, models, combinations of a wide variety of techniques and methods. It may seem to newbies that it is not systematized and the financial sector is in chaos. However, in fact, this is far from being true; everything is governed by 3 key postulates you should be aware of. They are as follows:

  1.     all factors which influence the price of an asset are embedded in the chart;
  2.      price always moves in trends;
  3.      prices follow certain patterns which are constantly repeating.
Technical analysis on the IQ option trading platform
Technical analysis on the IQ option trading platform

Charts 

At the heart of all technical analysis is a chart. It represents the movement of price in a certain direction. A chart may be:

  1.      upward;
  2.      descending;
  3.     sideways;
  4.      wavy.

Varieties

To date, stock trading has come up with many ways to display graphical information about the dynamics of quotations of investment assets. However, there are only three main types of charts:

  1.     candlestick chart;
  2.      bar;
  3.      line chart.

The indicator

The indicator only shows the past

And it's right there in the name. This is what newbies and often experienced traders don't understand about indicators. They forget how any indicator works. And that is:

A mathematical operation on past data.

Do you understand? An indicator cannot "predict" the future. It is based on a very simple formula.  But what does it show? Past price data. You will save a lot of time, if you immediately realize the simplest trader's truth:

The indicator does not predict the future. It only shows the past.

The indicator structures the past data, but is not able to look into the future, not even 1 point. 

ADX Indicator for Binary Options

 The Average Directional Index is another great find for speculators as it is one of the trend-following indicators. And so traders who use this tool in their technical analysis can easily identify

the current trend in the market.  The indicator is based on two indicators:

  1.     Positive instrument +DI
  2.      Negative instrument -DI

These two tools have their own peculiarities, for instance, the first one is applicable for determining the current strength of an uptrend and the second tool, on the contrary, shows you the current strength of a downtrend.

Stochastic Oscillator

The Stochastic Oscillator is one of the best-known and most informative technical analysis tools. Its effectiveness is due to its high sensitivity to changes in the financial market mood, so unlike many lagging indicators, the Stochastic Oscillator generates relevant trading signals. Thus, strategies built on the basis of Stochastic allow binary options traders to enter deals at the most profitable levels and complete a high percentage of trading contracts with profits. Today we will reveal the secret of this technical indicator and determine the most effective format of its application. 

RSI 

RSI indicator - in other words, the relative strength index, which shows the strength of the current market movement in binary options. This algorithm is included in the basic MT4 package and like any of the oscillators works within a sideways market movement.

RSI indicator, is a popular and simple algorithm used for binary options by most traders during technical analysis. The work of the indicator is based on the principle of maximum and minimum of the traded instrument over the previous time interval.

How to start day trading binary options in South Africa 

  1.  Register for trading

Sign in on the IQ option trading platform

Registration form in the IQ option trading platform
Registration form in the IQ option trading platform

In order to trade in South Africa, one needs to create an account on the broker's website. After that, the trader gets access to the trading platform, analytics, economic calendar and other services available on the company's website.

One cannot do without filling in the form, as the goal of speculators is to make a profit. The broker has no right to receive money and transfer profit to an anonymous user. The company may be suspected of money laundering, which is punishable by law. After spending 2-3 minutes to create an account, a user opens up great prospects.

Features of opening an account

Newcomers often wonder how to sign up for a binary options account. The process is straightforward, you need to click on the "Register" or "Create account" button on the broker's website. A form will then open in which you need to fill in the following details:

  1.      Your first and last name;
  2.     Your email address;
  3.     Your country of residence;
  4.     Your mobile phone number;
  5.     Your password;
  6.      Account currency.

Subsequently, you will be required to complete an extended form with additional information. After that access to the test terminal, services which will help in forecasting of quotations, training materials is opened. A number of brokers will not allow a trader to access these options, unless they make a minimum deposit.

Ways to try options with a demo account without registration:

  1.  1. Register with one of the brokers with a demo account. All you have to do is fill in your name and e-mail. You do not have to enter your phone number, so managers will not bother you with phone calls. List of brokers of binary options with a demo account:
  1. 2. Open a demo account.

What is a binary options demo account?

The main purpose of a demo account is to enable a user to get acquainted with the market and functions of a trading platform, to apply theoretical knowledge in practice without any risk for capital.

Trader works with a fictitious deposit, but under real conditions, i.e. demo account is a fully adequate emulator of binary options trading. Market conditions and quotations for digital contracts are fully identical with those of the trading platform.

In order to trade in South Africa, one needs to create an account on the broker's website. After that, the trader gets access to the trading platform, analytics, economic calendar and other services available on the company's website.

One cannot do without filling in the form, as the goal of speculators is to make a profit. The broker has no right to receive money and transfer profit to an anonymous user. The company may be suspected of money laundering, which is punishable by law. After spending 2-3 minutes to create an account, a user opens up great prospects.

Features of opening an account

Newcomers often wonder how to sign up for a binary options account. The process is straightforward, you need to click on the "Register" or "Create account" button on the broker's website. A form will then open in which you need to fill in the following details:

  1.      Your first and last name;
  2.     Your email address;
  3.     Your country of residence;
  4.     Your mobile phone number;
  5.     Your password;
  6.      Account currency.

Subsequently, you will be required to complete an extended form with additional information. After that access to the test terminal, services which will help in forecasting of quotations, training materials is opened. A number of brokers will not allow a trader to access these options, unless they make a minimum deposit.

Ways to try options with a demo account without registration:

  1.  1. Register with one of the brokers with a demo account. All you have to do is fill in your name and e-mail. You do not have to enter your phone number, so managers will not bother you with phone calls. List of brokers of binary options with a demo account:
  1. 2. Open a demo account.

What is a binary options demo account?

The main purpose of a demo account is to enable a user to get acquainted with the market and functions of a trading platform, to apply theoretical knowledge in practice without any risk for capital.

Trader works with a fictitious deposit, but under real conditions, i.e. demo account is a fully adequate emulator of binary options trading. Market conditions and quotations for digital contracts are fully identical with those of the trading platform.

A demo account for newbies is a training tool. Using this option familiarizes the user with the functionality of the trading platform, the available tools, and the ways to open trades with a set expiration date. 

Demo accounts are in most cases available without registration, but on some platforms you will need to verify your details and fill out a special form. It only takes a couple of minutes to open a demo account.

3. Open a real account.

Trading binary options on a real account does not differ from trading on a demo account (depends on the broker), except for psychological burden. 

Opening of the account, depending on the broker, occurs according to certain rules.

The classical scheme is the following:

  1.     Registration with filling of data.
  2.     Replenishment of the account.
  3.     Verification.

Important! While filling the data it is always necessary to fill it in accurately. The thing is that if someone tries to access your account, or in case of any problems with the system, the broker may ask you to confirm your identity. If the data is entered incorrectly, there is a possibility to lose the account and the money on the account.

4.    Replenish account

After your registration you can make a deposit at your broker. Please note, that when registering you will be asked to choose the currency, in which the trading account will be opened. Be sure to think through and calculate in which currency the account will be opened. After all, you will not be able to change it later. In order to change the currency you will have to re-register. So think about it right away.   Click the "Deposit" button, and the broker will offer you a choice of deposit methods. You can of course make a deposit with a VISA, Maestro, Mastercard or with e-money, the choice is quite big (WebMoney, Neteller, OKpay, Skrill). Please note, that if you choose for example USD as your account currency during registration, everything will be automatically converted to USD when you deposit in any other currency. The money on the balance is displayed almost instantly, in rare cases there may be a delay of up to 30 minutes. I recommend you deposit and withdraw the money with the currency you specified during registration. Thus you will not lose on conversions.   After making a deposit, you should immediately start the process of verification of your account. 

Verification is a must! It is not a whim of the broker, but a mandatory requirement of the regulator. At every licensed broker the verification procedure is obligatory. When the broker withdraws the earned money, he must be sure that it is yours and not that of a third party.

 So do not delay, pass the verification at once. And beware of brokers, where verification is not required. When depositing with a bank card be prepared for the broker to ask you for a photocopy of the card data. To confirm that the card is yours, take a picture of it on both sides. On the front side of the card close 4 digits and on the back side close your CVV code. You do not need to take a picture of your personal account when making a deposit with e-money.