The following post is a guest post contribution
Notice to EU traders:The European regulator ESMA made a prohibition of binary and digital options to retail traders from The European Economic Area starting from the 02.07.2018. In case you still want to trade binary options, you need to acquire the status of a professional trader on which this regulation does not apply. I recommend you have a look at the article – How to get the PRO status to continue trading Binary options
Binary options are not promoted or sold to retail EEA traders. If you are not a professional client, please leave this page.
Where to next? (If you do not meet the requirements)
- FX Options – Attractive alternative to binary options?
- Read our in-depth guide for cryptocurrency beginners
- Read how to trade forex and other CFD instruments
Traders outside The European Economic Area are not anyhow affected by this new European rule and can trade binary options (if the binary broker operates in a given jurisdiction).
How to Start Trading Your Saved Income
If you’ve been lucky in your career and finances, you might have been able to save up a sizable amount of money in your bank account. While this cash is a fantastic safety net to fall back on if you lose your job or have a medical crisis, it’s not doing you much good just sitting there. What if there was a way you could invest this income and possibly earn more without putting it in an individual retirement account or 401(k)? If you turn to the global trading market, you’ll have a good chance of increasing this stagnant savings fund.
The Types of Trading
Before hitting the stock and global markets, you’ll need to decide which type of trading works best for you. There are several different kinds, all with slightly different methods of buying and selling.
Technical trading is when you use charts and graphs to analyze stock and index trends to figure out the best time to buy and sell. It’s a great method for statisticians and mathematicians, but not so great for the average person. With momentum trading, you’ll take a look at the overall market and find stocks that are on the way up, investing in them before they reach their peak.
Scalping is a method where you make numerous transactions in a single day to eke out as much small profit as possible from each trade. This is quite the contrast from swing trading, where you’ll hold your position with a certain stock for a longer time in order to ride out any ups or downs.
Perhaps one type of trading with the simplest principle is binary trading. With binary options, all you have to do is buy an option depending on whether you think the market will rise or fall.
How Does Binary Trading Work?
If you’re interested in trying out binary trading, you won’t have to invest a huge sum of money to begin. In fact, the price of buying or selling binary options is always between the $0 and $100 threshold.
You might ask, what is the principle of binary trading? Well, for example, you might predict that the price of gold will be higher in 2 hours than it is now. In such a case, you purchase a call option. Vice versa, if you predict the fall of gold, you purchase a Put option. Once your option expires, it evaluates and you find out whether your prediction was correct or not. If it was correct, you earn around 80 to 92% of your investment. In case it was incorrect, you lose the invested sum.
Trading binary options successfully is not as easy as it may appear at first sight, you need to apply some strategies to do well and to have any chance of making money on a long-term scale. Binary trading is a “game” of numbers in which you have to put the odds at your corner.
Why Choose Binary Trading?
There are a few advantages to binary trading over other options. For one, if you trade options that have an expiry time of 60 seconds, you know the result of your trades in just one minute. That being said, you can also be very flexible with your trades, choosing time spans of days or weeks.
Best of all, the principle of binary trading is very simple. It is either – or. Meaning, you don’t have to predict how much the price of the asset will move. As long as it moves at least one pip in your direction, you make a full profit. If your direction prediction is incorrect, you lose the invested amount. To learn more about the binary trading boom and how it will affect you, check out the infographic below.
- CFD Trading vs ETF Trading – explained for dummies - January 26, 2021
- Best Brokers That Accept ITIN - December 20, 2020
- Top Hidden Factors Influencing Choosing a Bitcoin Exchange - December 3, 2020