What are Binary Options?
Binary Options are an investment instrument that is in expansion. With Binary Options you do not invest in the purchase of actual assets such as the purchase of shares on the stock exchange. It consists of bets on the value that a particular asset may reach in set period of time, which can be short-term (60 seconds, 15 minutes, 1 hour, etc.) or long-term (1 day, 1 week, 1 month, etc.) You can bet on the value lowering (PUT) or on the value rising (CALL). If you are correct, you will be able to make an average profit of 70% to 85% on your contract.
Binary options are regulated since 2013; they only appeared in 2008. They are a very recent form of investment, although they already have many traders because of the potential gains and the ease of trading.
The entire process to start trading in Binary Options is extremely simple, which also explains the success that Binary Options have had.
This financial instrument is traded through Brokers who make online trading platforms available. In addition to trading manually, you can use a signal service or automatic trading systems called Robots.
If you want to trade independently and manually, you just have to learn to use one or more trading strategies. To learn the most comprehensive process you should have training. For this you can select the Binary Options Training developed especially for beginners. The best part is that this Training is free for those who choose a Broker that sponsors the class.
Main types of binary options:
Cash-or-nothing: It is the simplest and most used. It consists of betting on the rising or falling of the value of the asset. Here the final value (strike price) does not matter, it only matters if it is above or below the value at the time you place the trade (spot price). If you are correct, you will earn on average 70% to 85%. If you are wrong, you will lose 100% of that trade. If you can find a strategy to achieve more than 60% of correct trades, you will make a profit.
Asset-or-nothing: Unlike the previous option, the payout for this type is determined by the price of the asset itself. It is a good option but it involves having a greater knowledge of the financial markets, or at least being knowledgeable about the asset prices and the latest fluctuations.
One- touch: This option terminates when the asset reaches a certain value (strike price). One of the difficulties here is the price reaching the strike price within the time period until the termination of the contract.
No- touch: The intention here is the opposite of the aforementioned. The goal is to avoid reaching the strike price within the time period until the termination of the contract.
60 Seconds: Very fast trades. If there is a very definite trend on a price, this type allows you to quickly close the contract before there is a reversal in prices. It is also a very popular type of contract, especially among those who already have some experience.
As binary options have evolved, new formats or variations of existing formats have appeared. Each Broker tries to offer something different, so it is normal to find variations of these formats.
Watch the video below that explains what are Binary Options
Steps to begin trading in Binary Options:
1 – First steps and registering with a Broker
Start by reading the articles about the first steps in Binary Options. Then you should open an account with a Binary Options Broker. There are many, though not all have regulation, support in your native language, or reliable platforms. Ideally, choose a Broker that is regulated by a credible authority. See the List of those who are always in the first places of the international Rankings.
2 – Choose the trading strategy
Choose your strategy here. Remember that there is no foolproof strategy and that no one strategy is bad. There are days that certain strategies simply do not work. Others work better at certain times or periods of the day. Some work well with certain assets, and not so well with others. Ideally test more than one and try to specialize in the one that feels best to you. Especially since each person is different and may adapt better to a form of trade that is present in a particular strategy and not in another. On this site you will find a few different strategies. You can also choose to use a Binary Options Signal service provider, and leave it to the professionals to send you trading proposals. Currently, it is very popular because there are companies dedicated to sending the signals with very interesting results. Recently, the development and use of automated trading software for Binary Options, Robots, has grown greatly. In this Blog you will find the most well known. Read the article Robots for Binary Options.
3 – Recognize trends and use the resources
For those who want to use strategies based on technical indicators, it is important to recognize the trends. Recognizing a pattern in a chart is simple, but you have to pay attention to the type of chart that is being observed. On this Blog we have a Widget that lets you view a chart that will help you understand the trend. You can also use the chart by choosing the type of asset that you want to monitor, the time span you want to observe, as well as add indicators that are important to be able to use some strategies that work based technical indicators, such as those found in the same graph. It is also important to follow the economic news that cause changes in assets.
4 – Investing the right amount
It is important to know how to manage your funds. To learn the concepts, please read the article on Risk Management. It is essential to understand how much to invest. The understanding of this rule can save your account.
5 – Know when to stop
There are days that the market does not have a defined trend, so that assets are constantly up and down without taking a specific direction. If you have losses on 3 consecutive orders, stop trading. Come back the next day. Sometimes, in an attempt to recover losses we experience an emotional meltdown and enter a downward spiral of loss after loss and when we notice we have already lost 50% of our funds.
The rule to stop when we see that things are not going well is very important. Be aware of it and always respect it.
Lastly, be sure to visit the bonuses and promotions section. If you are just starting we have several promotions, some are exclusive to our Blog.
Carefully read the articles I write and follow the Binary Options Blog, because I’m constantly updating our information and writing new articles. If you have any questions do not hesitate to comment on articles or contact me through the contact page. If you enjoyed reading the blog, please share it. Thank you.
References and Articles on Binary Options
– Binary Options (Investopedia – Cory Mitchell, 2017)
– Binary Opitons (WIKIPEDIA, 2017)
– Binary Options Opinion– (Forbes, 2010, Opinion before Binary Option become regulated)
– Binary Options – ( Financial Times, 2011)
– Binary Options, how to invest ( Blasting News, 2017)
– Binary Options on Israel (Reuters, 2017)
– Online investors report losing (The Independent, 2017)
– Event-driven trade link between trading and clearing systems ( Baecker, J Buddendiek, K Carnahan 2008)
– Derivatives: principles and practice (RK Sundaram, SR Das 2011)
– Binary option pricing using fuzzy numbers (A Thavaneswaran, SS Appadoo, J Frank – Applied Mathematics Letters, 2013)
– Binary options: fixed odds financial bets (H Raw – 2011)
– Hedging by sequential regression: An introduction to the mathematics of option trading (H Föllmer, M Schweizer – Astin Bulletin, 1989)
– Rethinking risk management (RM Stulz – Journal of applied corporate finance, 1996)