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Welcome to the largest expert guide to binary options and binary trading online.

BinaryOptions.net has been educating traders globally since 2011 and all our articles are written by professionals making a living in the financial industry. We have almost a thousand articles and reviews to guide you to become a more profitable trader in 2020 regardless of your current experience level. If you want to discuss trading or brokerage with other traders, we also have the largest forum in the world with over 20 000 members and lots of daily activity. Read on to start trading today!

 

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What are binary options and how do you make money?

Binary Options is a fast and extremely simple financial instrument that allows investors to speculate on whether the price of an asset will increase or decrease in the future, e.g. Google’s stock price, Bitcoin’s price , the USD/GBP rate, or the price of gold. The time period can be as little as 60 seconds, making it possible to trade hundreds of times per day on any global market.

Before you make a trade, you will know exactly how much you will earn if your prediction is correct, usually 70-95% – if you invest $100 you will get a credit from 170 – 195 dollars for successful trade. This makes risk management and trading decisions much simpler. The result is always Yes or No – you either win it all or you lose it all – so this is a binary option . The known risk and reward and this structured reward is one of the attractions.

Exchange-traded binaries are also available, meaning traders do not trade with a broker.

To start trading, you first need a regulated (or licensed) brokerage account. Choose one from the recommended brokers list , where only brokers that have been shown to be trustworthy are included. Top brokers have been chosen as the best choice for most traders.

If you are completely new to binary options, you can open a demo account with most brokers, to try out their platforms and see the trades before you deposit real money.

Intro Video – How to Trade Binary Options

These videoswill introduce you to the concept of binary options and how trading works. If you want more details, please read this entire page and follow the links to all the more in-depth articles. Binary trading doesn’t have to be complicated, but with any subject, you can educate yourself to become an expert and perfect your skills.

Types of options

The most common type of binary option is the online up/down simple trade. However, there are different types of options. A common factor is that the outcome will be the binary of the group (Yes or No). Here are some of the types available:

• Up/Down or High/Low – The most basic and popular binary option. The price will end up higher or lower than the current price at expiration.
• In/Out, Range or Boundary – This option sets a YouTube high figure and a human low figure. Traders predict whether price will end up inside or outside of these levels (or ‘boundaries’).
• Touch/No Touch – These levels have set levels, either higher or lower than the current price. The trader must predict whether the actual price will ‘touch’ those levels at any point during the trade expiry.
• Note with touch options, trades can close before the expiration time – if the price is touched before the option expires, the “Touch” option will pay out immediately, regardless of the price move from the subsequent induction level or not.
• Ladder – These options work like a regular Up/Down trade, but instead of using the current strike price, the ladder will have preset prices (‘ladder’ that goes up or down). This can often be some way from the current strike price. As these options often need a significant price move, the payouts will often exceed 100% – but both sides of the trade may not available.

How to trade – Step by step guide

Here is a step-by-step guide to placing binary trades:

1. Choose a broker – Use our brokercomparison and review tools to find the best binary trading site  for you.
2. Choose an asset or market to trade – The asset list is huge and includes Commodities, Stocks, Cryptocurrencies, Forex or Indices. The price of oil, or the price of Apple stock, for example.
3. Choose an expiration time – Options can expire anywhere between 30 seconds and a year.
4. Set the size of the trade – Remember that 100% of the investment is risky so consider the trade amount carefully.
5. Click Call/Put or Buy/Sell  – Will the asset value increase or decrease? Several different broker label buttons.
6. Transaction verification and confirmation  – Many brokers offer traders an opportunity to make sure the details are correct before confirming a trade.

Choose a broker

Cheat options have been a significant problem in the past. Fraudulent and unlicensed operators mine binary options as a new exotic derivative. These firms are slowly disappearing as regulators finally start to act, but traders still need to seek out regulated brokers.

Note! Don’t trade with a broker or use services on our blacklist and scam site , stick with the ones we recommend here on the site. Here are some shortcuts to the pages that can help you determine which broker is right for you:

• Compare all brokers  – if you want to compare the features and offers of all recommended brokers.
• Bonuses and offers  – if you want to make sure you have extra money to trade, or other promotions and offers.
• Low minimum deposit brokers – if you want to trade for real without having to deposit large sums.
• Demo account – if you want to try a trading platform, really without deposit.
• Halal   broker- if you are one of the growing number of Muslim traders.

Property List

The number and variety of assets you can trade varies from broker to broker. Most brokers offer options on popular assets such as major forex pairs including EUR/USD, USD/JPY and GBP/USD, as well as major stock indices such as FTSE, S&P 500 or Dow Jones Industrial. Commodities including gold, silver and oil are also commonly supplied.

Stocks and individual stocks are also tradable through many binary brokers. Not every stock is available, but generally you can choose from about 25 to 100 popular stocks, such as Google and Apple. These lists are growing all the time as demand dictates.

Asset listings are always clearly listed on every trading platform, and most brokers provide their full asset listings on their websites. Full property listing information is also available in our reviews.

Expiry date

The expiry time is the time when the trade is closed and paid out. The only exception is when the ‘Touch’ option has reached the preset level before expiration. The expiry date for any given transaction can range from 30 seconds, up to a year. While binaries initially started out with very short expirations, demand has been assured, there are now plenty of expiry times available. Some brokers even offer traders the flexibility to set their own specific expiry times.

Expiry dates are generally grouped into three categories:

• Short Term / Turbo – They are generally classified as expiring less than 5 minutes
• Normal – These will range from 5 minutes, to an ‘out of date’ expiry which will expire when the local market for that asset closes.
• Long Term – Any term that expires will be considered long term. The longest shelf life can be 12 months.

Regulations

Although slow to react to binary options initially, regulators around the world are now starting to regulate the industry and make their presence felt. Current major regulatory bodies include:

• Financial Conduct Authority ( FCA ) – UK regulatory body
• Securities and Exchange Commission Republic Cyprus ( CySec ) – Cyprus Regulatory Authority, commonly ‘passported’ EU-wide, according to MiFID
• Commodity Futures Trading Commission ( CFTC ) – US regulatory body
• Australian Securities and Investment Commission ( ASIC )

There are also regulatory bodies operating in Malta and the Isle of Man. Many other authorities are now very interested in specific binaries, especially in Europe where domestic regulators are keen to strengthen CySec regulation.

Unregulated brokers still operate, and while some are trustworthy, the lack of regulation is a clear warning sign for potential new clients.

ESMA

Recently,  ESMA  (European Securities and Markets Authority) has moved to ban the sale and marketing of binary options in the EU. The ban however, only applies to brokers that are regulated in the EU. This leaves traders with two options to continue trading: First, they can trade with an unregulated company – this is extremely risky and not advisable. Some unregulated companies are responsible and honest, but many are not.

The second option is to use a company regulated by bodies outside the EU. ASIC in Australia is a strong regulator – but they won’t implement a ban. This means that ASIC regulated companies can still accept EU traders. See our broker list for regulated or trusted brokers in your area.

There is also a third option. Traders who register as ‘professionals’ are exempt from the new ban. The ban is only designed to protect ‘retail’ investors. A professional trader can continue to trade at EU regulated brokers such as IQ Option. To be classified as professional, the account holder must meet two of the following three criteria:

1. Open 10 or more deals per quarter, from €150 and up.
2. Have assets of €500,000 or more
3. Worked for two years in a financial company and experienced in financial products.

How to set up a trade

The ability to trade different types of binary options can be achieved by understanding certain concepts such as strike price or price barrier, settlement and expiration date. All trades have an expiration date.

When the trade expires, the behavior of the price action according to the chosen type determines whether it is profitable (in money) or in a losing position (out of money). Also, price targets are key levels that traders set as benchmarks to determine outcomes. We will see the application of price targets as we explain the different types.

There are three types of professions. Each of them has different variations. That is:

1. High and low
2. In/out
3. Touch / No Touch

Let us take them one by one.

High and low

Also known as Up/Down binary trading, the essence is to predict whether the market price of the asset will end up higher or lower than the strike price (selected target price) before expiration. If the trader expects the price to rise (trade of “Up” or “High”), he will buy a call option. If he expects the price to drop ((Low Low or Down Down), he will buy a put option. Expiration time can be as low as 5 minutes.

 

Please note: some brokers classify Up/Down into different categories where a trader buys a call option if he predicts the price will rise above the current price or buys a put option if he We expect the price to fall below the current price. You may find this as a increase/decrease  on some trading platforms.

 

In/out

The entry/exit pattern, also known as tunnel trading, or border trading, is often used for price consolidation (temporary) and breakout (outward) trading. How it works? First, the trader sets two price targets to form a price range. He then buys an option to predict whether the price will stay within the price range/tunnel until expiration (Enter) or if the price will break the price range in either direction (Exit).

 

 

The best way to use tunneling binaries is to use asset pivots. If you are familiar with pivot points in forex, then you should be able to trade this type.

Touch / No Touch

This type is determined based on whether the price action touches the price barrier or not. A “Touch” option is a type where a trader buys a contract that will make a profit if the market price of the asset purchased touches the set target price at least once before expiration. If the price action does not touch the price target (strike price) before expiration, the trade will end up as a loss.

A game No Touch No is the complete opposite of Touch. Here you are betting on the price action of the underlying asset not to touch the strike price before expiration.

 

There are variations of this type where we have Double Touch and Double No Touch. Here, the trader can set two price targets and buy a contract that bets on the price hitting both targets before expiration (Double Touch) or not touching both targets before expiration (Double No. Touch). Normally, you would only use Double Touch trading when there is strong market volatility and the price is expected to come up with some price.

Some brokers offer all three, while others offer two, and there are those that offer only one. In addition, some brokers also place restrictions on how the expiration date is set. To get the best grades, traders should shop around for brokers who will give them maximum flexibility in terms of types and expiry times that can be set.

Mobile application

Your mobile trading has been made very easy as all major brokers offer fully developed mobile trading apps . Most trading platforms have been designed with mobile users in mind. So the mobile version will be very similar, if not the same as the full web version on traditional websites.

Brokers will cater to both iOS and Android devices and produce versions for each device. Downloads are quick and traders can also sign up through the mobile website. Our review contains more details about each broker mobile app, but most are fully aware that this is a growing area of trading. Traders want to react instantly to news events and market updates, so brokers provide tools for clients to trade wherever they are.

 

Q&A about transactions

What does binary option mean?

“Binary Options” means, very simply, a trade where the outcome is a ‘binary’ Yes/No answer. These options pay a fixed amount if they win (called money in amount), but the entire investment is lost, if the binary trade loses. So, in the short term, they are a form of fixed financing options.

How does a stock exchange work?

Steps to trade a stock through a binary option;

1. Choose stocks or equity.
2. Specify the desired expiration time (The time the option will end).
3. Enter the size of the trade or investment
4. Decide if the value will increase or decrease and place an order or call

The steps above will be the same for each broker. More layers of complexity can be added, but when it comes to balancing trades, the simple Up/Down trading type is still the most common.

Call and Call Options

Call and Put are simply terms given to buy or sell an option. If a trader thinks the underlying price will increase in value, they can open a call. But where they expect the price to fall, they can place a trade.

Different trading platforms label their trading buttons differently, some even switch between Buy/Sell and Call/Put. Others ditch the put and call phrases altogether. Almost every trading platform will make it completely clear in which direction a trader is opening an option.

Is Binary Options a Scam?

As a financial investment tool, they are not a scam in themselves, but there are unreliable and dishonest brokers, trading robots and signal providers.

The point is not to write down the binary options concept, based only on a handful of dishonest brokers. The image of these financial instruments has suffered due to these operators, but regulators are slowly starting to prosecute and fine the violators and the industry is being cleaned up. Our Forum is a great place to raise awareness of any wrongdoing.

These simple checks can help anyone avoid scams:

• Marketing promises huge profits. This is a clear warning sign. The binaries are a high risk/high reward instrument – they are not an online money making scheme and should not be sold as such. Operators making such claims are most likely to be unreliable.
• Know the broker . Some operators will ‘funnel’ new customers to a broker they partner with, so the person has no idea who their account is. A trader should know the broker they will be dealing with! These funnels often fall on the get-rich-quick marketing people discussed earlier.
• Cold call . Professional brokers don’t make cold calls – they don’t market themselves that way. Cold calls will usually be from unregulated brokers who are only interested in getting the initial deposit. Proceed with extreme care if joining a related company in this way. This will include email contact – any form of communication other than the blue one.
• Terms and condition . When accepting bonuses or offers, read the full terms and conditions. Some will include the lock in an initial deposit (in addition to the bonus funds) until a high trading volume has been made. The first deposit is the trader’s cash – legit brokers won’t claim it as their own money before trading. Some brokers also offer the option to cancel the bonus if it does not suit the needs of the trader.
• Don’t let anyone trade for you . Avoid allowing any other account manager to transact with you. There is an obvious conflict of interest, but the staff of this broker will encourage traders to make large deposits, and take on greater risks. Traders should not let anyone trade on their behalf.

Which are the best trading strategies?

Binary trading strategies are unique to each trade. We have a strategy  section, and there are ideas that traders can experiment with. Technical analysis is used by some traders, in combination with   charts , indicators and price action research. Money management is essential to ensure risk management is applied to all transactions. Different styles will suit different traders and strategies will evolve and change as well.

There is no single best strategy Traders need to question their investment goals and risk appetite and then find out what works for them.

Are Binary Options Gambling?

This will depend entirely on the habits of the trader. Without strategy or research, any short-term investment will win or lose solely on luck. Conversely, a trader making a well-researched trade will ensure they have done all they can to avoid depending on luck.

Binary options can be used for gambling, but they can also be used to make trades based on value and expected profits. So the answer to the question will come to the trader.

Advantages of binary trading

The main benefit of binary is the clarity of risk and reward and the structure of the trade.

Minimum financial risk

If you’ve traded forex or its more volatile cousin, crude oil, or spot metals like gold or silver, you’ve probably learned one thing: these markets are fraught with risk and very vulnerable. blown out of the market. Things like leverage and profit, news events, slippage and requotes, etc. can all negatively affect a trade. The situation is different in binary options trading. There is no leverage to argue with, and phenomena such as slippage and requotes do not affect binary options trading results. This reduces the risk in binary options trading to a minimum.

Flexible

The binary options market allows traders to trade financial instruments spanning the currency and commodity markets as well as indices and bonds. This flexibility is unmatched, and provides traders with the knowledge of how to trade these markets, a one-stop shop to trade all of these instruments.

Simplicity

A binary trading outcome is based on only one parameter: direction. Traders are essentially betting on whether a financial asset will end up in a particular direction. In addition, the trader has the freedom to determine when the trade ends, by setting an expiration date. This gives a trade that initially started badly the chance to end well. This is not the case with other markets. For example, loss control can only be achieved using stop loss. On the other hand, a trader must endure a drawdown if a trade takes an unfavorable turn to give it a chance to be profitable. The simple point to be made here is that in binary options the trader has less to worry about than if he were to trade other markets.

Better transaction control

Traders have better control over trades in binary. For example, if a trader wants to buy a contract, he knows in advance what he will gain and what he will lose if the trade runs out of money. This is not the case with other markets. For example, when a trader places a pending order in the forex market to trade a high impact news event, there is no guarantee that his trade will be filled at the entry price. or the losing trade will be closed at the stop loss exit.

Higher payout

The payouts per trade are usually higher in binary compared to other forms of trading. Some brokers offer payouts of up to 80% on a single trade. This can be achieved without jeopardizing the account. In other markets, such payouts are only possible if a trader ignores all the rules of money management and exposes a large amount of trading capital to the market, hoping for a large sum of money. large payouts (never happens in most cases).

Accessibility

To trade the highly volatile forex or commodity markets, a trader must have a fair amount of trading capital. For example, trading gold, a commodity with daily volatility of up to 10,000 pips in times of high volatility, requires trading capital in the tens of thousands of dollars. However, binary options have much lower entry requirements, as some brokers allow people to start trading as low as $10.

Disadvantages of Binary Trading

Reduce transaction rate for sure banking transaction

The payouts for binary options trading drop dramatically when the odds for that successful trade are very high. While it is true that some deals offer up to 85% of payouts per transaction, such high payouts can only be made when a transaction is made with a set expiry date. far from the transaction date. Of course in such situations, transactions are more unpredictable.

Lack of good trading tools

Some brokers do not provide really useful trading tools such as charts and features for technical analysis to their clients. Experienced traders can get around this by sourcing these tools elsewhere; Inexperienced traders, newcomers to the market are not so lucky. This is changing for the better though, as operators mature and become aware of the need for these tools to attract traders.

Limitations on risk management

Unlike in forex, where traders can get accounts that allow them to trade micro and mini lots with small account sizes, many binary options brokers set up exchanges; the minimum amount that a trader can trade in the market. This makes it easy to lose too much capital when trading binary. As an illustration, a forex broker may allow you to open an account with $200 and trade micro lots, allowing a trader to expose only his or her acceptable capital to the market. school. However, you will be hard pressed to find many binary brokers that allow you to trade under $50, even with a $200 account. In this situation, four losing trades will blow the account.

Transaction loss costs

Unlike in other markets where the risk/reward ratio can be controlled and set to give an advantage on winning trades, binary options’ odds of risk reward in favor of losing trades.

Commercial repair

When trading a market such as forex or commodities, it is possible to close the trade with minimal loss and open another profitable one, if the repeat analysis of the trade shows that the first trade was a mistake. Where binaries are traded on an exchange, this is mitigated however.

Trading Forex trading and binary trading

These are two different alternatives, traded with two different sentiments, but both can make sense as investment instruments. One is more TIME centers and the other is more PRICE centers. Both work in time/price but the focus you’ll find from one to the other is an interesting divide. Spot forex traders can ignore time as a factor in their trading which is a huge mistake. The successful binary trader has a more balanced view of time/price which simply makes him a more well-rounded trader. Binarys by their nature force one to exit a position within a certain timeframe win or lose, which creates a greater focus on discipline and risk management. In forex trading, this lack of discipline is the #1 cause of failure for most traders as they simply hold losing positions for longer periods of time and cut down their winning positions. wins in less time. In binary options it is not possible to time out your trade ends up winning or losing. Here are some examples of how this works.

 

 

The above is a trade made when buying EUR/USD in a price and time window of less than 10 minutes. As a binary trader, this focus will naturally get you better than the example below where a spot forex trader focuses on price while ignoring the closing time factor. end up in trouble. The mentality of being able to focus on limits and double pivots will make you a better trader in general.

 

 

The advantage of spot trading is that failure is very similar – exponential expansion of profits from 1 point in price. This means that if you enter a position that you believe will increase in value and the price has not yet increased rapidly, the normal tendency for most spot traders is to wait or worse, add entering losing positions when they figure it will come back Acceleration in the opposite direction of desire leaves most traders stuck in unfavorable positions, all because they don’t plan time for his reasoning and this leads to a complete lack of trading discipline.

 

 

The nature of binary options forces one to have a more complete mindset about trading both Y = Price Range and X = Time Range when limits are in place. They will simply make you an overall better trader in the first place. On the contrary, in essence, they require a greater win rate as each bet means a   70-90%   increase compared to a   100% loss . So your win rate needs to average 54%-58% to break even. This imbalance makes many traders pass or retaliate trades, which is just as bad as holding/adding to losing positions as a spot forex trader. To trade successfully, you need to practice money management and control your emotions.

In summary, as a trader, binaries can provide a better platform to learn to trade. The simple reason is that focusing on TIME/PRICE combined is like finding both ways when crossing the street. The average forex trader only looks at the price, which means he only looks in one direction before crossing the line. Learning how to trade takes both time and price helps to consider turning one into a total trader.