How to Make Money With Binary Options - 10 Step Guide
Binary option trading is more about the decision between ‘yes or no’.
The whole process is less complicated and is revolving around assets such as Forex, commodities, stocks and shares.
This type of trading does not require the possession of the asset to trade on it.
The value of the trade is derived from the underlying asset and thus there is no need for possession.
For example to place a trade on gold there is no need to purchase gold bullion.
All you need to do is just to take a decision whether the price of gold is expected to shoot up or go down within a certain period of time.
But before taking decision, first of all you need to know how to trade binary options successfully and it will help you to take the decision perfectly.
How To Make Money With Binary Options - 10 Steps You Should Follow
1. What type of trades should be executed:
The minute you make up your mind to start getting into trading choose the type of trade you are willing to get involved in.
By this it means decide the asset class – stocks, forex, commodities or so on.
The working on each of this is different and the market is also different.
For example, if you think the value of oil prices is going to crash soon, then your choice of asset should be commodities.
2. Choose a right trading broker:
Take some time to review the trading broker list and choose the top 5 that have good rating.
Once you have this filtered list go through the features, services and cost associated to each of these brokers to find out the one that finds your need and is economical and affordable.
This approach will help you take the decision of choosing a right and reliable broker for all your trading activities.
It is crucial that you check if the broker is licensed and regulated.
3. Choose right expiry time:
The term of binary options trades can be as less as 60 seconds to over a month.
It’s important to choose a right expiry time considering the extreme conditions of uncertainty.
The expiry period should be decided post considering the level of risk you are ready to take.
The financial market is very volatile and things can change upside down overnight.
Do thorough researches on your investment strategy and till when you are expecting to keep the option live!
4. Understand potential gains:
Just like how you will compare and by the product at best price while shopping, similar approach should be taken when you choose to invest in a trade.
Each broker is different and thus what they offer also differs.
Compare each broker to check what would be the potential gains and what you will be missing if you do not make the right choice.
This comparison will help you to understand the potential gains that are expected to get and from which broker.
5. Trending options:
Be a lookout for latest and most used information.
While most platforms are keen on offering latest updates or news, only some platforms will give the information of most popular and widely used set of information.
This information is crucial to understand the reason for any movement in the market.
Almost all trades are being booked under the interpretation of some information.
Getting a specific strategy of trading and sticking to the same through will not help you reach anywhere in your trading life.
6. Place trades instantly:
As you already know the market is very volatile and things will flip instantly.
If you decide to execute a trade, do it right away.
Make use of the mobile app offered by most of the binary options trading brokers to book your trades then and there.
Market will not have for anyone convenience.
The opportunity missed cannot be taken back.
If you are sure that the market will move to favor you, then there should be no reason why there is a need for delay in executing the deal.
7. Increase the trading budget:
As there is lot of competition among binary options brokers, unique and attractive features are offered to gain customers.
These benefits should be used to increase your trading budget.
For example, some binary options trading brokers offer Welcome sign up bonus to during registration as a promotional offer (Example: Binomo).
Or if you are introducing someone new to the platform, a certain percentage of their profit is shared with you for a set period of time.
These uniqueness should be made use to have a better trading budget.
8. Hedge your trades:
Do not try to make money by exposing your risk to the market movement.
Being greedy will not get you anywhere.
Thus hedge your trades through off-setting positions and nullify your risk in the trade.
Though the profits you make through this are very marginal, it will help you to play a safe game especially when market is very unstable.
9. Roll Forward features:
This option is offered by only few brokers and only when you have a live trade in the market.
The option is to help traders to extend the expiry time of an existing trade if they are expecting the market to move favorable to them by extending the trade’s expiration date.
This feature will help you to make money through binary options on an existing trade that is moving in your favor.
However, for this a thorough understanding of the financial market is very essential.
Some of the brokers who are offering this feature are:
10. Look for early exit option:
Getting into a trade with broker who offers this option is very good and beneficial.
Suppose you fear about some uncertain event in the market that can take a toss on your investment.
Early Exit option will give you a chance to get out of the risky transaction with some minimal charges.
This charge will be acceptable by the trader, if he thinks he will face loss on his investment from the uncertain event(s).
Some of the brokers who are offering this feature are:
Make use of all these tips and guidance to safe guard your investment and to make money with binary options which will increase your profit earning power!