Regardless of whether you are experienced trading Binary Options or you are just starting off, the most important decision you’ll make is registering with a quality broker. It is imperative to use a professional trading platform, one that is not only easy to use for first time traders, yet advanced enough for professional day traders.
Trading platforms need to be designed with the trader’s experience in mind and built with simple navigation features. The speed of the server that your platform uses can have a major difference on your trading experience, as Binary Options are based on live financial markets.
DayTraderGuide.com has assembled a list of the industry’s Top Binary Option Brokers so that you may review all of the features they offer and provide. Feel free to register with a brokerage that best fits your trading needs.
1. How do trading Binary Options differ from other methods of trading?
As the name indicates, Binary Options are based on the results of a trade being binary; meaning they will end in either one of two possibilities, ‘In the Money’ or ‘Out of the Money.’ Whether your trade is a success or not depends on your ability to predict if an underlying asset will either rise or fall from the strike price that the option was purchased at.
When online trading, you are placing your investment on whether the price of the asset will either increase or decrease by the time the expiry of the option purchased ends. If your prediction is correct, you will be paid according to each trades’ pay-out percentage, otherwise your investment will be considered a loss. The pay-out ratio offered at the time of purchasing the option determines how much money or, ROI, you’ll receive on your investment.
2. How does an average trader view Binary Options?
From the point of view of an average trader, Binary Options are a transparent method of trading because the investor knows exactly what the pay-out will be, no matter if the prediction is accurate or not, which is an incredible risk management tool that is only provided by Binary Option brokerages.
In a Binary Option trade, an asset will never allow an investor to lose more money than what was initially invested in the option. With standard options an investor can get stuck and lose much more money than what was originally invested into the option.
3. What are the benefits for an investor to trade Binary Options?
Trading Binary Options has many benefits:
- Minimal investment needed to enter the market
- Hundreds of assets to trade
- Mobile App to trade on the go
- Trading Signals alert traders of movement in the markets
- Trading Robots for automated trading
- Easy to use Platforms
- High pay-out rates (comparison): Up to 93% for Call/Put and over 600% on One Touch Trades
- Weekend trading with One Touch Trading
Trading Binary Options provides investors with a way to enter the markets and trade minimal amounts on major stocks such as Apple Inc. or Google, as well as currency pairs and commodities including oil and gold.
Binary Options were designed for day trading, relying on short term trades to be made throughout the day as there are movements in the markets. Pay-outs (comparison) are very high when compared to other investing opportunities. The trading process is very basic; within a few demo trades you’ll have the entire thing figured out. Binary Options only allow traders to trade assets whose markets are open at the time, but there is a special feature called One Touch Trading which allows Binary Option Traders to set trades before the start of the next week.
4. How do I choose a reliable broker?
When you are choosing a broker to trade with, you have to look for reliability, trustworthiness and the quality of their customer service. There are several quality brokerages out there, some of which provide better customer service than others. Consider pay-out rates, because brokerage pay-out rates’ tend to differ, even when the asset and expiry time are identical. Here is a list of recommended Binary Option brokers as well as an article titled – Benefits of Having Multiple Accounts.
5. Is Binary Option trading difficult?
No, trading Binary Options is actually very simple. The trading process is extremely easy to use as the entire trading process revolves around a few basic decisions.
- Select the underlying asset
- Select the direction the underlying asset will move
- Select an expiry time for the option to close
- Select the amount you want to invest
Please view the 4 Main Trading Styles for Binary Options
Each Binary Option Broker has their own mobile app, which allows you to access your account and platform and make trades while on the go. Many companies have some form of a Signal Alert System which tells you when there are movements in the market. Also automated Trading Robots can make trades on your behalf, according to the parameters that you set.
Before you start trading Binary Options, I encourage you to familiarize yourself more with how Binary Options are traded by reading two articles that have previously been posted on DayTraderGuide.com – What are Binary Options and Introduction to Binary Options.