Binary Options have recently been popular with the rising cases of people who turned into millionaires with just speculating whether a currency pair will rise or fall for a particular period of time. The good thing with binary options is that anyone can trade it from anywhere in the world, at any time as long as you are of legal age. What is the real story? Read ahead where I will teach you how to properly trade binary options effectively to achieve consistent profits always.
What is Binary Options?
Binary options, sometimes referred to as options trading can be broken down into two. Binary means an action with two outcomes and options is a choice between those two outcomes.
Thus, binary options is a financial options contract that enables you to choose an asset like a currency pair, EURUSD, and predict whether it will be above (also call or buy) or below (also put or sell) the strike price at the moment a predefined time reaches.
If the prediction is correct and the direction goes as you predicted, it is referred to as in the money. If it goes in the opposite direction, it is referred to as out of the money.
Asset: This is an instrument that is traded in the financial markets. It could be a currency pair like EURUSD or GBPUSD.
It is true that you can trade binary options from anywhere in the world at any time but it does not mean you should do that. Additionally, people who became rich overnight took huge amounts of risk and the same way they made their money is the same way they might have lost all of it. Instead of turning you into a millionaire overnight, I will show you how to consistently profit. We are in this for the long term.
How does Binary Options Work?
Before we start, I would like to warn you of trading risks. With every great potential of making a lot of money comes with its risks. You should not invest in money you are not afraid to lose. With proper money management and risk reduction, you will profit in the long run. Most brokers offer a payout of 75–90%.
- You place a call option of $100 on EURUSD with the intention of the asset rising. Let’s say the profit percentage is 85%
- The option lands in the money. You get the profit percentage added to your current balance. $100 + $85 = +$185
- The option lands out of the money. You lose that current investment. -$100
Do not worry. I have linked the best broker with the lowest rates below and my ultimate trading strategy that I use to consistently make profits in binary options trading.
There are tons of brokers out there all with competitive deals but after thorough search, I recommend IQOption.
IQOption is a regulated online broker (CySec) located in Europe that deals with numerous categories of trading with 400+assets including forex, binary and digital options, commodities, indices and cryptocurrencies. They offer the most competitive rates in the market with profit percentages as high as 95%. They have both an online platform(web app that runs on Chrome, Mozilla, Opera and Safari)and a software that runs on Android, iOS and PC.
There is support for a lot of languages and their platform runs 24/7, includes OTC assets. Deposit and withdrawals are fast and responsive. It supports online wallets such as Skrill and Neteller, WebMoney as well as credit and debit cards.
You can also deposit as low as $10 and trade with as low as $1 and follow the tutorials on their platform.
What is the Difference Between Forex and Binary Options?
Forex is simply the foreign exchange markets. Unlike in binary options trading, traders speculate on both the direction of the asset and their profit percentage is dependent on how far the asset price moves.
In binary options, the traders just speculate on the direction of the asset and have a fixed price on winning and losing.
Which is Riskier Between Forex and Binary Options?
In my opinion and mathematically, forex trading is much more risky than binary options trading. This is because in forex one has to predict two factors: the direction and how much it will move towards it.
How To Consistently Profit in Binary Options
Can you really make money in binary options? The answer is yes! But it requires a lot of hard work and elimination of factors such as greed.
The Ultimate Trading Strategy:
Open a demo account with this broker. Test this strategy and once satisfied, switch the accounts and deposit an amount. Minimum is $10 but I recommend starting with $100 to notice the growth.
OPTIONAL: Learn more about technical analysis to understand what is going on.
- You need to first add some indicators that will aid you in spotting the signals. Go to the bottom left corner and press the Indicators button. **Take note of the colors and numbers** Add RSI Indicator, add Parabolic SAR 0.02 and 0.04 acceleration and MACD.
2. Set the candle time period to 15 secs.
3. Set the expiration time to 2 minutes.
4. When you see this signal, press HIGHER.
5. When you see this signal, press LOWER.
My top 5 rules to avoid losses:
- Start with a strategy in the demo account. Backtest it until you are satisfied it works. Start the strategy in the real account and stick to it. I would recommend to start with 1–5% of your balance and grow from there.
- Avoid greed and set realistic expectations. Although you can make a lot of money in a short period of time, you should treat this like a real investment with a realistic ROI. High risk and greed will only benefit you in the short term.
- Skim profits. Each time you get a streak of wins, you should withdraw the profits so that it does not blind you.
- Know when to let go. If by chance you start having bad luck with a lot of losses, you should know when to rest and come back after instead of blowing off your account.
- Be consistent. Consistency is key when trading. Don’t give up when you encounter a bad day. Instead, take a few hours off and come back when your mind is clear. Happy trading!
DISCLAIMER: Futures, stocks and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, stocks and options may fluctuate, and, as a result, clients may lose more than their original investment. All trading strategies are used at your own risk.