Binary Trading Explained
People are always seeking ways to improve their quality of life which, especially today, means generating more income. While opportunities to accomplish this are numerous, binary trading has become very popular lately. Plenty of interested and eager traders are looking to have binary trading explained in clear and simple terms which should serve as a straightforward introduction to this potentially lucrative way of supplementing their earnings.
This article aims to explain what is binary trading and how does it work. Additionally, we will also provide information on various binary brokers and auto trading solutions which provide a new aspect of binary options trading.
The Basics of Binary Trading Explained
Notwithstanding the fact that binary options trading existed before 2008, it was then that they became widely accessible to the public at large.
It soon became one of the most popular ways of asset trading. This is not particularly surprising as binary trading is a far simpler way of trading than traditional trading options.
The basic principle of binary trading rests on two options – the price of the underlying asset rising or falling. It is specifically because of this direct principle of trading why binary options became so vastly popular.
It does not require extensive previous knowledge nor does it demand a huge amount of investment capital. In fact, industry standard is minimum deposit of just $250. This presents an amazing opportunity for those who have little to no experience with financial investment and are afraid of acquiring losses.
Binary Trading Explained – How Does it Work?
Simplicity is one of the founding stones of binary options trading and one of the reasons explaining its immense popularity among traders which now number millions all over the world. What traders need to do is just decide whether the price of the selected asset is more likely to rise or fall.
Accordingly, the trader will select the Put (fall) or Call (rise) option. Then, it is necessary to invest the desired amount, select an expiry time and then wait for the final outcome. Depending on the selected expiry time, the traders can find out if they made a profit or not in as little as 60 seconds or, at the most, in 150 days.
Binary Trading Explained via Available Assets
All financial trading is based on available assets, and the same is true for binary options trading. A quick search on the Internet will tell potential traders that with most binary brokers there are four possible choices when it comes to underlying assets.
Popular Binary Trading Assets Demystified
Stocks are well-known and favoured assets when it comes to financial trading, especially among professional traders. While those who are just starting out in binary trading might be a bit vary of stocks, there is no reason to shy away from them. Because of their popularity, there are plenty of available information about stocks which are just a click away thanks to the Internet.
The list of the most popular stocks include Apple, Microsoft, Toyota, Facebook, Twitter and Google which makes it easy to acquire available info about the current circumstances on the market thus facilitating the final decision about the likely price direction.
Still the most popular of assets among binary options traders, currencies or currency pairs are usually selected by beginner traders.
They are perceived to be the simplest way to start binary trading, especially in terms of the so-called strong currency pairs like USD/EUR, GBP/USD, EUR/GBP.
Yet, there are not the only options available and, depending on the broker selected, Australian Dollar as well as Canadian can be traded while further options may include Japanese Yen, Russian Ruble, Chinese Yuan and many other.
This type of asset has been around since the dawn of human trading as it includes traditional goods such as oil, coffee, corn, sugar, silver, gold, gas… All these underlying assets are very dependable on the weather conditions and nature so that has to be taken into consideration if traders decide to trade binaries using this asset group.
A further aspect which must be accounted for is also the current political situation as well as demographics to further ensure better price prediction on the market. Luckily, plenty of information is readily available online and all traders who are seriously considering binary trading should invest some time and effort to acquire as much info as possible.
Indices are typically considered to be among the most stable of available assets as this group does not experience abrupt changes.
Among indices which attract the most interest from traders are Nasdaq, S&P 500, France 40, Dow Jones, FTSE 100, Hang Seng and many more, again, dependant on the selected binary options broker and the variety it offers.
Potential traders have bear in mind the fact that it could be a bit tricky to predict what is most likely to happen with this type of asset due to slow changes.
This can be more difficult for beginners who, perhaps, are not as familiar with the market and its changes.
Binary Brokers and Binary Trading Explained in Simple Terms
Another important aspect of binary trading is the selection of binary broker which will be used in the trading process.
In a way, this might be even crucial. Due to the popularity of binary options, traders seeking a binary options broker will be faced with a huge choice which can number up to 500 available brokers.
It can be a daunting task to select one, especially for those who have no previous experience. Yet, since our aim here is to offer binary trading explained in simple terms, we will provide several useful tips to make this procedure easier.
- Look for a broker with well-established reputation such as IQ Option, 24option or Plus Option
- Check if they are offering a demo account which is fantastic training ground for inexperienced traders
- Try to opt for a binary broker which provides a mobile trading app as that provides more flexibility – trade on the go
- Inspect the trading platform which should be simple, logical and easy to navigate
- Check the variety of assets they offer as well as expiry times and trade options
- Make sure you understand various trade options available which typically include – High/Low, Pairs, Range, Boundary, Long Term etc.
- Select a broker which provides educational materials as that is invaluable help for both experienced and inexperienced binary traders
- Check the security they provide on the trading platform, most brokers opt for SSL security common for financial dealings
- Make sure you inspect all the payment methods available as this is important for both making deposits and withdrawals
- Test the customer support a broker provides as this is the first line of defense and help if traders have issues during the trading process
Advantages of Auto Trading in Binary Options
There is another aspect of binary trading which will be discussed here and that is auto trading or the so-called binary robots.
Binary trading explained in terms of binary robots is something which, in recent years, generated even more interest than manual binary options trading. The advantages introduced to the process of binary trading via auto trading systems are very handy, especially for those who wish to further simplify the whole process.
Products like Option Robot, Simple Auto Trading or Fintech have been recognized on the market and are often used in automated trading. These systems are created using the latest technology and rely on complex, state-of-the-art algorithms which scan the market and, based on the information gathered, suggest the most likely price direction.
Trading binaries using binary robots shifts the workload from the trader to the system as traders simply need to select their preferences and let the trading system do the rest.
Binary trading can be a great way of supplementing the income, especially for those traders who are committed enough to invest some time into proper research. The information about this investment opportunity is abundant online and following the simple tips could make this profitable.
However, traders also have to be aware of the risks involved since all financial investment is exposed to it.
Yet, with time, effort and using remarkable tools available like demo accounts and educational materials which provide great info and handy tutorials, traders could generate healthy profit over time.