Binary options are the form of internet trading where traders can gain a profit just by predicting the value of financial assets. There is no official platform to trade in binary options; however, many broker sites support this type of trading.
Significant elements about binary options
Trading with binary options is a straightforward process, and it can be started even if you are a novice. Let's discuss some points for trading binary options as a beginner.
Choose broker
As discussed earlier, there is no separate platform officially supported by binary options, sp you have options to choose a suitable broker as per your requirement. ExpertOptions, Pocket Options, IQ Options, Olymp Trade, and Quotex are some of the trustworthy and reliable brokers in the market.
Asset requirement
The number and the diversity of the asset vary from broker to broker. However, some common assets, Stocks, Forex, cryptocurrencies, indices, and commodities, are supported by the most brokers in the market. Also, it is significant to choose the right asset for binary options trading, so you should study assets and make decisions depending on their past records.
Expiry time
In binary options, expiry time plays a significant role. Any trader has to predict the value or the cost of the assets within this expiry time.
Mainly, the expiry time is grouped into three types!
Short term – In this category, expiry time can last from 30 sec to 5 min. It is also called turbo strategy.
Normal – The expiry time ranges from 5 minutes to a whole day. It is considered normal because the trader gets some time to predict the result, and most prefer the same.
Long term – Any asset's expiry time that lasts beyond the day to the year is known as the long-term expiry time.
Regulations
Regulators play an influential role for any brokers in the market. It acts as a sign of authority and trustworthiness for the broker. There are many regulators operating from different parts of the world, such as the FCA (UK regulator), CySec, CFTC (US regulator), ASIC (Australian Securities), and more. One point you should always consider is to check the regulator while deciding on a broker.
How to choose the broker for trading in binary options?
If you are a novice trader and just on the way to deciding on a broker for trading, the following points will surely help you.
- Make a list of all brokers and compare them with each other. Depending on a feature, services, regulator, and the trust of the other traders, you should shortlist a few.
- Check bonuses and rewards offered by the broker to get extra benefits.
- Check minimum deposit amount and withdrawal request process time.
- Open a demo amount, spend some time on those shortlisted brokers, and decide based on your experience, requirement, and budget.
Steps to trade binary options
Sign up
We have already discussed the steps to choosing the broker. Now you have to sign up for the trader account and verify yourself with valid documents.
Open demo account
After the login process, you can go for a demo account if you don't have enough idea about the broker platform, services, and features. The demo account also offers virtual money to experience live trading.
Deposit amount
Every broker has a different minimum deposit amount. Make sure you are depositing up to 4% of your balance. It will help you endure losses, if any.
Select the assets and set the expiry time
Brokers support tons of assets, and you can choose any one of them. Also, set the expiry time to get enough time to predict the result.
Take the call/put action
It is the last step in binary options trading. Before time expires, you have to predict the result and close the trade with call/put action.
- Call – When the prices are expected to rise, a trader can take call action.
- Put –If the predicted result is to fall in the asset's value, a trader ends the trade with put action.
Are binary options legit?
Yes! Binary Options are absolutely worth it, and anyone with little experience, consistency, and smart decisions can make a profit. However, just like other financial trading platforms, binary options also possess financial risk. Also, make sure you are investing that you can afford to lose.
Bottom line
A binary option is undoubtedly a good choice for trading. However, if you want to go a long way, you should learn from scratch and execute what you have learned. We hope this article will benefit you if you are a novice.
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