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What is binary options trading?
Binary options as such - aka all-or-nothing options - appeared in 2008. At that time, when the global financial crisis was raging, new financial instruments began to appear, expanding the possibilities of stock speculators. While the standard - called "vanilla" - options are quite complicated in their structure, the binary options are their extremely simplified version. So here we go.
Don't be confused by the name "option" which smells a mile of stock exchange and all that financial stuff. In wikipedia you can read about options, say: "It is a contract between the buyer of an underlying asset and its seller to buy or sell it at a pre-agreed price in the future. That's all great - but only for stock binary options. And guess what? It's not relevant to you. Because the binary options presented on the Internet have nothing to do with exchanges.
Both de jure and de facto, it's just a financial bet. You decide that in 15 minutes the dollar to euro exchange rate will be higher or lower than it is now. Or that Google stock will fall. If you're right - get 80% of your return in a short period of time, say 15 minutes. Compare that to betting on the outcome of the match or on the horse that comes in first. It's worth remembering how much banks pay per year on a deposit to figure out why the binary options scheme has become so popular.
Binary options are tied to a wide variety of prices, aka assets. These include currency pairs in Forex, stocks in stock exchanges, a variety of stock indices, and more. All a binary option does is allow you to make money from price predictions on these assets.
Now we can move on to the practical part. This is very important because not everyone knows how to trade binary options correctly. That is why many people lose money and then write that binary options are a scam, when in fact they just misjudged the market.
The most important thing at the first stage is to forget about divorce, to forget about the failures of other investors, to put aside fear. Fear is the first thing that prevents you from making money at the moment. Think about successful traders and investors, they were always confident in themselves and never gave up on their goals, they did not look at others and were not guided by other traders. Everyone has his own way.
When choosing a broker, don't just look at the reviews, because many people are not predisposed to stock trading, and when they fail, they blame it on the broker, the market and everyone else.
The second rule: the broker must work not less than 3 years. This is also the characteristic indicator of the stable broker, because the majority of brokers which are in the black list have no regulator and work less than one or two years.
The third rule: you have to like the broker. You will be psychologically comfortable trading binary options if you not only trust the broker, but also enjoy working with him.
Binary options are a logical development of the types of transactions described above. They are more formalized and less related to a specific change in the value of the relevant assets. There is no change in ownership of real assets in operations with binary options, these are purely speculative transactions. A binary option promises a known amount of reward in advance upon the occurrence of certain conditions.
Based on these conditions, call options and put options are distinguished:
increase/decrease in the price of an asset - the winner is the one who correctly guesses the direction of price change;
achievement/non-achievement of the price of the stipulated level;
finding the price in a certain range or going out of its limits.
The simplicity of such trades with binary options attracts inexperienced traders, but allows them to conduct many such operations simultaneously and clearly calculate the amount (but not the probability) of possible profits and losses.
The rules for binary options trading on different trading floors can be noticeably different. At the moment there are European, American and Asian variants (styles) of option, which differ in terms of expiry dates and the way the price of the asset is determined.
Since binary options can also be called digital options, as operations on them are made by means of computer systems via the Internet, the option (style) does not depend on the location of participants.
What is binary options trading platform?
Binary options are spreads more and more among people and getting more and more turnover. The platform is the technical side of the broker, that is, the "place" where traders directly open bets (attention, the platform is not the broker).
Most often brokers rent platforms from IT companies. That's why you can find the same platform at absolutely different brokers (from scammers to "white" brokers of binary options).
In other words, the platform is just a technical component of trading. All the platforms are similar in general, so the trading binary options online takes place just by means of "two buttons". All other gadgets are essentially unnecessary for the trader.
TechFinancials is probably the best trading platform for binary options online. It is really very, very convenient. In fact, its developer is the company TechFinancials, which also owns Optionfair broker.
SpotOption is definitely the most popular binary options trading platform. Almost half of the currently active brokers work on it. The list of options brokers, working on this platform is very long (Utrader, AllDayOption, OptionRally, Verum Option, TorOption, Banc de Binary, Binex). Moreover, the brokers in this list are completely different.
TradeSmarter is a relatively young, but very promising platform of binary options broker. Initially, the platform "became famous" because it was rented by the fraudsters Daily Trades, but now the platform also successfully operates the broker FinMax, which for a very short time managed to get on top of all the ratings of binary options.
Tradologic is a very mediocre binary options trading platform. It is not to say that it was something particularly bad, but it has almost no advantages. In fact, among the brokers working on this platform, there is not a single decent one.
Almost all brokers allow you to make transactions only through the browser. In some cases it is possible to trade binary options online through Meta Trader. And only IQ Option allows you to install on your computer its own platform for binary options, reviews of which, by the way, also positive.
12 technical indicators with detailed settings
4 types of charts (zone, line, bars, candlesticks)
Timeframe from 5 seconds to a month
Ability to display several charts at once
4 tools for graphical analysis, including Fibonacci lines
Opening of transactions with a minimum delay
Mobile trading takes place using apps on cell phones, making it more convenient to participate in trading even when you're not at your desk.
See a list of the best binary options apps for mobile trading:
IQ Option - Best trading app overall
Pocket Option - Free bonus available
Expert Option - Best for short term trading
Olymp Trade - The Best Broker
RaceOption - Average platform
What is binary options simulator?
A binary options simulator is more commonly referred to as a demo account, which is absolutely identical in its capabilities to a real deposit. Here you can also choose all available assets (stocks, currencies and so on), observe the price chart in real time and make transactions.
There is no need to be afraid of making mistakes or taking losses, as analyzing your failures you can improve your trading skills. On the other hand, haphazard trading is not suitable for development, so it is better to start trading with good strategies.
The benefits of the simulator are not insignificant:
testing of trading strategies
learning all the subtleties of the terminal
getting to know the indicators, practicing your own tricks of the trade
If you start trading binary options on a real deposit right away, there is a high probability of losing your first accounts. Still, as long as a person learns how to make transactions on the binary market, his chances of earning are quite small. The first steps on any financial market are better to make without any investments. The amount which can be obtained as a result of trading is not limited by any restrictions and can be both large and not so large.
IQ options - a trading platform allows you to get acquainted with all the nuances of binary options trading simulator without investing money by using a demo account. This platform has all the necessary trading software. The minimum deposit on the platform is $ 10. And also on the platform is always real market data, allowing you to accurately monitor the trades. It also shows asset quotes at a given moment of time.
Also on this site, you can try to trade different assets.
It is a good idea to start trading with a demo account to protect yourself from unexpected expenses due to ignorance of all the necessary nuances.
How to use a binary options trading simulator?
The first thing to try is to switch assets, see what the indicators give us, try to follow the behavior of the market price. Then, when the terminal is clear, we can move on to serious trading strategies to increase our chances of success.
To use the binary options simulator, you should register. Think up and enter your login and password.
There are different strategies in terms of complexity, but that's what the simulator is designed to practice for beginners. To begin with, I recommend trying out binary options trading on the news. This is the simplest of the effective systems, which has proven to be excellent.
You don't have to be afraid of mistakes or losses when trading with a demo account, because by analyzing your failures you can improve your own trading skills. At the same time, haphazard trading is not conducive to development, so it is better to start trading right away and test trading strategies.
The practice of money management skills on the deposit allows traders to minimize risks when implementing trading strategy. And only practice helps to gain professionalism. However, starting to trade without necessary experience in the majority of cases will lead to financial losses. To avoid such an outcome, it's better to try yourself in virtual trading.
A demo account for beginners is a training tool. Using this option familiarizes the user with the functionality of the trading platform, the available set of instruments, and ways to open trades with a set expiration date.
How the demo account works. A beginner trader learns to use expert advisors' tips, analyze technical indicators, determine the amounts of bets and select attractive assets, evaluating market dynamics and considering the mood of the leading players and all without risking
Demo accounts are willingly used by professionals as well. The value of trading with virtual capital for an experienced trader is to safely try out new strategies, study market reaction to some schemes, which will later be applied to real trading in case of success.
Profitable strategies for binary options are divided into the following categories:
Strategies based on the way the market is analyzed:
strategies that use technical analysis
Binary options strategies by complexity.
There are 2 types of strategies - simple and complex.
Strategies for binaryoptions by duration:
long term (transactions last one day or more)
short term (binary options strategies for 60 seconds, 5 or 15 minutes, an hour
Binary options strategies with an accuracy of 90%.
If you are still undecided about what is right for you, it is best to familiarize yourself with examples of the best binary options strategies for beginners and not only, which have proved themselves in the market for a long time. By getting to know them better, you will understand how binary options trading works and develop your own algorithm.
Investment strategies is a set of measures to develop, select and implement the most appropriate, cost-effective and efficient ways to.
The purpose of the investment strategies is to develop a plan of action, due to which the investment activity will be optimized as much as possible.