If you are interested in making money on indices or some other popular financial assets, then this article “What should a beginner know about binary options” can help you decide what you should start with and what you need to make a decent profit.
Binary Options for Beginners
To make a profit on binary options, you need to pinpoint whether the price of an underlying asset will rise or fall during a certain period of time.
Actually, it’s not difficult to do. You just need to make a precise forecast. For instance, you choose Sony stock and expect the stock to rise next 30 minutes. To earn on your forecast, you have to browse a broker’s website, select Sony stock and invest in the CALL option for 30 minutes.
CALL means that you expect the price to rise.
If in 30 minutes, that is, by expiration of the option, the stock rises even by 0.001, you will make a 70% profit.
Binary options are really easy to trade even for beginners. There is nothing difficult about it. There are just two buttons, namely, CALL which means that you expect the price to rise, and PUT which means that you expect the price to fall.
How much it will rise or fall doesn’t matter, what matters is whether it actually moves up or down.
Binary Options for Beginners – How to Choose a Broker
The first thing you have to do is to choose a broker. In my opinion, an ideal binary option broker is AnyOption because of its popularity, efficiency, and performance. By the way, this binary option broker is ranked first in the world. Its website interface is nice, convenient and easy to understand.
To invest in binary options, you need to sign in and top up your account. This is really easy to do. You have to take the following 3 steps.
- Step 1 — fill in the form
- Step 2 — top up your account
- Step 3 — you can buy a binary option
Binary Options for Beginners — How to Choose an Underlying Asset
To buy a binary option, you have to choose an underlying asset. For instance, you can buy a binary option on stock, commodity, currency, or index. I advise you to choose an underlying asset not because it’s popular but because you like it or can understand how to deal with it or would like to understand it. For instance, you can choose stock or indices as an underlying asset of a binary option.
As for me, I generally deal with currencies and stock because there are many news releases and hence much information on these underlying assets.
For instance, a couple of days ago, I heard that Apple would present a new product in a week. Closer to this date, I will buy a binary option on Apple stock for two to three days because its price will rise at least a little, even just by 0.001, this is for sure.
Binary Options for Beginners — Analysis
Once you have chosen an underlying asset, you need to do analysis which means that you have to forecast its price.
The key instrument for me is fundamental analysis influencing prices. However, on the foreign exchange market, technical analysis is of greater importance, especially, for short-term trades.
To perform an accurate forecast, sometimes you just need to watch news, and sometimes you have to compare your and experts’ opinions and do technical analysis. On the website, you can find binary options forecasts prepared by the analytical company and various interactive tools of technical analysis. Also, you can use indicators and follow price movements on the live chart that you can found in the main menu of the website.
Binary Options for Beginners — Investment
Once you have made a decision what direction the price will take, that is, UPWARDS or DOWNWARDS, you select an underlying asset on the broker’s website and click on the CALL (upwards) or PUT (downwards) button, correspondently. Then, you choose time of expiration, the period during which your forecast will work out, and the investment amount.
Once you’ve entered the amount, you see how much you will make and lose.
Thus, you know from the very beginning how much you will return if your forecast works out, and how much you will lose if it’s wrong. And the last what you have to do is to click on the BUY button and wait until expiration.
Binary Options for Beginners — Profit
To analyze underlying assets of binary options is easy. This is why to make a profit trading binary options is also simple. I advise you not to chase multiple trades simultaneously. Make just one or two successful trades, but don’t buy, say, fifteen options because most likely you will lose a half of them.
Also, I advise you to read articles on this website where you can find a lot of useful information on analysis and strategies, tips etc. which can help you increase your yield from binary options trading.
Binary Options for Beginners — Guide
Just look at the chart of Apple stock, and you will see a steady rise. Tim Cook said in one of his latest interviews that Apple is so rich and diversified that they can afford investments in large projects. Although they will produce a return in forty years or later, Apple can afford it.
An important factor of successful investments is a reliable broker because this is the broker who pays out you a profit. Among a number of brokers, I opt to deal with AnyOption. This is a time-tested broker, one of the originators of binary options that reduces your risks and offers a wide choice of underlying assets.
1. Choose an underlying asset from the list:
2. Chose time of expiration (in this case we invest just for 18 minutes):
3. Enter the investment amount and click the CALL (UP) button as we expect the price to rise:
4. After 18 minutes, our binary option expires, and we make a 80% profit:
Apple stock went up in line with my forecast. Although the price increased just a little, my investment has returned a 80% yield!
As I have said, binary options are really easy to trade even for beginners.
The article explains just the basics of binary options trading. To understand these basics better, you have to try real trading, the best tutor.
May good luck always accompany you in trading!