What are Binary Options? Strategies for Earning on Digital Options
When you decide to take part in trading on a stock exchange, you are essentially buying securities, something that has tangible collateral. These are documents that are valuable because they give you the right to own something and receive income: investments in money, property, shares in a company. It can be stocks, government bonds, corporate bonds, index fund shares. But binary optionTechnically, it is a contract, with the possible prediction of changes in the price of the selected lot over a certain period of time. For example: if the stock rose in price, those who played for a rise in price make a profit and vice versa. It may seem simple. But, as with anything, there are pitfalls.
When trading in digital assets, property, shares or liabilities are not bought, there are no securities and no depositary. To understand the difference even in the mechanism of operation of the platforms, you can still register. To register a client at the exchange, the broker will definitely ask for a passport or ID card, you will have to sign an agreement with the brokerage company and open a depository to keep the securities. Even if a good broker that you have chosen goes bankrupt, the depository will partially protect your investments and the remaining funds can be transferred to another broker and receive profit from them (Binary options trading training).
Top 5 best binary options brokers: test their terminals
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When registering to trade binary options at the initial stage, no documents are needed: an email or phone number is enough for the initial account confirmation. But to withdraw large sums, the company will request documents confirming your identity. Each platform has its own limitations on the amount of withdrawal, as well as the verification system. Further, in order to deposit your account (personal account), you do not need to sign an agreement with a broker or a depository, most often it is enough the contract of offer (user agreement), which you accept at registration. There is also a danger. After depositing all funds go to the account of the online broker, in case of its bankruptcy they will not go to another broker, they will disappear. When you transfer money into digital assets, the only company you invest in is the one you choose Binary Options Broker.
Let's start our journey into the past in the middle of the twentieth century. In 1973, the Chamber of Commerce in Chicago opened one of the first options exchanges, having developed trading rules specifically for the new type of transactions, then this direction had no regulators and belonged to the OTC market. Still today this exchange is considered the first one in introduction of technological innovations, innovative financial products and electronic trading. The Chicago Board Options Exchange offers traders the opportunity to trade on global indices and profit from investing in long-term assets.
Binary options or fixed-value assets became more popular with the development of digital technology and electronic trading platforms. It is often the case that they are the right place to start when there are not yet enough assets to make other investments. Now traders can control risks and use already known profitable strategies, gathering maximum information with the help of modern tools. According to statistics, the number of people profiting from binary options trading is increasing every year. New forecasting tools are appearing and technical means for tracking changes in the behavior of assets are developing.
Is it realistic to make money on binary options?
Work at the exchange is as follows: traders make bets on changes in the price of selected assets over a certain period of time. If the forecast comes true, then the profit is fixed, if not, then the trader loses the investment. What makes this type of trading popular is that in case of right forecast you can get multiple profits, and in case of loss you will know the amount of your loss in advance. Beginner traders need to keep up with new strategies and indicators for binary options. Other advantages:
- 24-hour access to the exchange's online platform;
- trade from anywhere in the world;
- no additional fees;
- You can use trading robots when trading;
- the ability to control losses in case of a loss;
- the size of the payment, the possible risks are known before the contract is concluded;
- short-term trading offers the opportunity to make a quick profit.
Options trading mechanism
Most often, for the speed of calculations, it is assumed that the option that is exercised has a price of 100 units, if not - 0. If the initial bid is 10, then when the contract is executed (the price of the underlying asset was above the agreed level at the specified time) the price is assumed to be 100, and that is the amount the trader receives. If the contract is not executed, the price is zero and the trader receives nothing. There are trading platforms, where in case of non-fulfillment it is possible to return up to 15% of the funds spent on its purchase.
Regulation and control
The development of options trading led to the need to strengthen control over the operation of exchanges. A commission was created to regulate the performance of both buyers and sellers. The function of overall control of the binary options market is performed by CySEC (see brokers with this regulator) - Cyprus Securities and Exchange Commission. In Russia the activity of brokers is controlled by the Financial Markets Regulatory Center (.).
How to choose a broker?
So, you're in the game. Look for a trading platform to register, start trading and earn income. But how not to make a mistake and choose your online broker? There are quite a few digital trading platforms open on the Internet. When choosing a good broker, you need to pay attention to a number of things:
- license and official documents, user agreement;
- reviews, reputation;
- duration of operation;
- technical capabilities;
- trading conditions;
- online support (bots, help center, live communication with a consultant);
- minimum and maximum withdrawal amounts, trading limits.
Usually, platforms that plan to continue to work value their reputation and to trade must obtain a license. Another indicator of reliability: the number of traders registered on the portal. A proven broker has regular participants and the number of new ones is growing. The trading process also has its own indicators: the number of base bets and contracts, the size of the minimum investment for a contract, tools for analysis. Check the forum and statistics to track how often there are technical failures in the portal, how quickly the support works.
Types of options
Contract trading also comes in many forms.
Classic Up/Down binary options
One of the most well-known types. Trading takes place on the forecast regarding the state of the lot value at the closing of the option, the deal is closed with the expiration of the contract. In case the price coincides with the forecast, the trader fixes profit, if not - loses the bet and receives no income. "Up" predicts that the price will go up and "Down" predicts that the price will be lower than at the moment of purchase. With correct forecasts such contracts can give 60-80% income from the possible bet.
Most often works for stocks and stock indices. Before the start of trading, a prediction is made for two bets relative to their price at the close of the contract. The main emphasis is on which asset price will show the greatest change and from that the income is counted.
In this option, a prediction is made as to whether or not the price will touch the value set during trading. The trader's profit is guaranteed even if the price of the asset even for a moment touches the set level. The profit can be up to 95% of the price of the bets made. Usually such trades are used in markets with low volatility.
An interesting contract, the advantage of which is the possibility of gaining more profit than in the case of a classic binary option. When choosing it, the trader must predict how the value of the asset will move (the number of pips) by the time the contract expires.
By the name it is clear that by entering into such a contract, the trader guesses whether the price will stay within the specified range. It is popular among beginning traders.
The levels that the price of the asset can touch are determined. One of the riskiest types of contracts, but can bring multiple returns.
Deciding to start earning on binary options does not necessarily require you to play guessing. To predict trading behavior and profit from changes, if you are serious about it, there are technical analysiswhich will help to understand the behavior of the market, choose an acceptable strategy and determine the time interval for betting.
Top bidding sites
What to choose forex (forex brokers rating) or binary options? Everyone decides for himself. The difference is that forex market participants earn on changes in exchange rates. During the trades, transactions are concluded with a forecast of the anticipated price level. But if this level is not reached, brokers still receive income (commission) from each transaction. Trading in the binary options markets works differently: the trader enters into a contract with a forecast of the lot (stock) price behavior, cryptocurrencies, stock indexes, etc.) for a given period of time. If the forecast comes true, the profit will be 70-90% of the contract value, otherwise, the trader loses his money. In this case, as we have already mentioned, there are sites where you can get back up to 15% from the value of the bet.
- Quotex (go online). Relatively new platform. Pros: instant execution, bonuses at registration, high yield on currency pairs, demo account can be opened without registration, intuitive interface of the control panel.
- Evotrade (go online). Russian platform. Received all necessary licenses, works on the author's platform. Pros: more than 70 assets for trading, starting bonuses at registration, service of copying of transactions, participants can take training.
- Pocket Option (go online). Demo account without registration, more than 100 assets for trade, bonuses at registration and replenishment, the convenient system of a conclusion of the income, licenses are received by CBFM. Minimum deposit - 3 thousand rubles. Steps in trading - from 60 rubles.
- Binarium (go online). One of the most popular platforms for trading options in the Russian segment of the Internet. No verification for Russian citizens when opening a personal account, minimum deposit from 600 rubles, high level of account security.
- Binary.com (go online). One of the oldest sites. The minimum deal size is 60 rubles. To start trading, you can make a deposit of 300 rubles. The bonus program for carrying out risk-free transactions is open.
Indicators for Binary Options
In the simplest terms: indicatorsThe indicators will not predict the future, they will not predict the exact profits. They will not predict the future, they will not predict the exact revenues, but they will give you the information about the past behavior of an asset: when the price was going up or down, when it was going up, the exact value of the lot, and other changes in the behavior.
Trades now offer a wide variety of indicators, such as Support and Resistance TLB OC, a program that charts the movement of asset support and resistance levels for binary options. Many traders believe that it is possible to trade and make a profit without indicators, making their own charts or trying to guess. In any case, it is up to everyone to use software to analyze the behavior of an asset or try their luck.
Newcomers often make mistakes, let's look at the most popular of them.
It is possible to make money on binary options by pressing a button and selecting a bet. But not much and probably once or twice. This is not a casino game and entering the market unprepared is undesirable, you can lose your deposit.
With a high deposit, it is not necessary that the profit will be high. Many markets offer a bet from 60 rubles, and with competent trading, relying on this bet, you can get a good income.
Binary options without strategy
Trading requires a strategy. And each trader has his own strategy. For successful trading, you need to be trained, gather information and then start working. If you're not sure of your strategy, choose a platform where the service is open demo accounts and try your hand at it without maximizing your profits.
With the right skill and ability, trading digital assets will become a source of permanent income if you remember that the market can behave unpredictably and hedge against it. Traders decide on the types of transactions, but there are platforms where a small percentage of the transaction is returned. Income depends on the ability to predict the behavior of the lot price at a certain interval of time, so before you start working, observe, collect information (statistics of the selected asset's behavior in the market).
As the rule "He who has the information rules the world" works everywhere, but one should not forget about luck or the ability to choose the assets that will bring income within the given strategy. It is possible to make money on trading digital contracts. Someone plays on luck, but it is better to be prepared by developing your own strategy for profit, or use those tools, which are already developed and well-proven on the market.