There are thousands of different options where people can invest today – stocks, bonds, real estate, business, art etc. Even education is something that people consider as a long term investment. All of these investments have different levels of risk and usually people choose the one that suit their requirements and lifestyle. Some of them might take a lot of time to manage, some are completely passive but with less income. Relatively recently the market has introduced another investment option called binary options or binary trading.
Binary trading explained
Binary trading is usually considered as a short term trading method. There are only two possible outcomes – yes or no, profit or loss, asset or nothing at all etc. In short, binary trading is prediction of a chosen asset price movement in a predetermined period of time. The return is usually known in the beginning so there are no surprises when a deal ends. Traders know what to expect.
As it can be seen in the picture above, trader needs to select only few options to open a trade:
- Asset – decide which asset to trade
- Expiry – set a time when you think a price is going to be higher (call) or lower (put)
- Amount – choose an amount for a particular trade
- Direction – choose a price direction
- Confirm – confirm a trade and wait till the end (Expiry time)
Standard high/low binary trading usually provide traders with approximately 62-85% profit if predictions have been successful. In a way, it’s a very simple type of trading and it takes only few trades to understand how it works but it doesn’t mean that it’s also easy to get profit. Below is a quick video on how trading process looks in real life.
Binary option trading video example
On average, a trader has to be correct in more than 55% of trades to get profit from trading binary options. This type of trading is suitable to people who have a very busy schedule as well as to those who have enough time to follow the market situation on daily basis. The only difference is that those who are very busy might not make as many trades per day as traders who can use half of their day to analyse and go through many different assets. I. e. If you’ve already decided what to buy, an actual trade can be done in less than a minute. It takes only 5 simple steps to make a trade:
- Log into your broker account (See more under: top binary options brokers)
- Find an asset that you’re want to trade.
- Place a bid.
- Enter an amount.
- Confirm your trade.
Due to its simplicity and high return rates, binary options are favoured by many people all over the world.