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Binary options are among the favorite tools of stock traders. The basic principle of binary options is to predict whether the price of a chosen trading pair will rise or fall.
Assets can be currency pairs (for example, EUR/USD), commodities (gold, crude oil, etc.), indices or stocks. If a forecast If the investor turns out to be correct, he makes a profit, otherwise the investor suffers losses.
In this article, we will not describe in detail what it is and how to work on binary options by trading different currency pairs.
Main operating principle
As you probably already know, binary options work on the principle that if you correctly assess the direction of change in the price of a currency, gold, silver or stocks, you will make money. The price may rise or fall.
To correctly assess the direction of price change, traders use various strategies. This article will discuss tips, techniques, and recommendations that will help you successfully trade binary options.
For analysis, the MT4 program is suitable or here this online chart.
Learning how to trade binary options and making some profit from it is actually quite simple. However, not everyone can make money through binary options, someone may not be successful or not have the proper experience.
Some people still think that just pressing "CALL" or "PUT" is enough to earn money.
But this is a bad idea, and if you trade this way, you will be in the red in the long run. To do this, we have prepared for you some tips and tricks that will help you trade successfully and stay in the black.
Some people look for gambling entertainment in binary options like playing roulette, when after a certain number of bets you can earn or lose a lot. However, for good traders, this is a stable source of profit.
Binary options trading is a long term endeavor. Short-term success or failure means nothing. People who are really interested in trading learn strategies and tips that really help to make money.
Money Management Oversight
A responsible trader should use only a small percentage of his total capital, and this is not about a separate deposit, but about your total cash accumulation.
The optimal investment for a particular trade should be no more than 4% from your current trading account. This reduces the risk that you will lose a significant portion of your capital after an unsuccessful series of trades.
In practice, this means that if you are trading $10 worth of binary options, which is often the smallest possible amount to trade, your deposit must be at least $250.
Not all brokers have a minimum trade of $10, you can also trade with a minimum of $50, so you can choose a broker with a minimum trade that suits your experience and ability.
You need to know when to trade
At the opening or closing of the exchange, absolutely unpredictable price changes can occur. Therefore, you need to know when the stock market opens, when it closes, and when it does not work. We recommend that you study the details of the nuances of opening and closing the stock market.
Know how to wait for the right deals
It's not always worth making deals. It is better to close one trade on a signal you trust than to trade more just because you have transferred money to the broker's account.
How to determine when the price will rise and when it will fall?
To correctly determine whether the price of currencies, stocks or commodities will increase or decrease, are used various strategies. Each binary options strategy has its own advantages and disadvantages, but there is no single strategy that will always work.
It is important that the strategy is profitable in the long run, as binary options trading is about long-term profit, not a one-time loss or one-time gain.
Basically speaking, we have three main types of binary options trading strategies:
- You can follow the latest news from the market;
- You can use charts that show the price dynamics for the previous period;
- Both options can be used together;
- The best option is to follow the charts for the previous period, as well as take into account market news.
Choose a reliable broker
The choice of a broker can be the main factor between profit and loss. Before making a deposit, study the terms, agreement and agreement, look at reviews about the company on third-party sites.
You also need to choose a broker according to the principle of full compliance with your requirements - there are many similar companies on the market, the working conditions for which may vary.
Binary options trading platforms can have a lot in common, but trading can end up looking very different, mainly due to different deposit amounts, deposit and withdrawal options, contract expiration dates, and customer service levels.
You can also find trading platforms where traders receive partial refunds when a PUT or CALL trade fails. Therefore, it is very important to collect as much information as possible about the choice of platform.
Try trading on a free demo account
In order to get the skills to trade binary options profitably, it is sometimes worth starting work on the so-called "demo" account, where transactions take place in real time, but no funds are required.
This will help you master the trading platform and test your strategy so you don't have to risk your own money.
A demo account works just like a real money account, but instead of real money, you trade with virtual money. The only drawback is that when you trade with virtual money, the emotions are not as bright as when you trade with real money.
Therefore, it is worth understanding that if you really really want to start making money on binary options, you should not stay on a demo account for a long time. We traded for a week - switched to real money, and only then, you will move in the right direction, and not sit in one place.