Binary option trading vs gambling secrets
This new investment vehicle is simplified in its approach, thereby shortcutting much of the time it takes to get up to speed for a beginner, whether you are interested in trading stocks, commodities, or currencies.
In the following paragraphs, we will highlight what these specialized options are about and how to make money with them. Since the trading approach is so unique in how the data is presented and how execution orders are given, your current broker of record may not necessarily offer binary options.
In this regard, we will give you sound advice on how to choose a broker that focuses on this trading genre. Due diligence is required in order to find a reputable firm that will provide the service quality you desire and the safety and security that will surely allow you to sleep well at night. There are many websites that can provide an answer to this question, but a brief definition from one of these sources is as follows:. That last statement can be found in most tutorials related to any trading activity, so what is so different with binary options?
The broker may also offer options for highly traded stocks, commodities, and currencies, but we have chosen the Nasdaq index here for illustrative purposes. You can bet if it will be below or above the specified value, and you can decide how much to invest in your chosen position. That is all there is to it. No hand wrangling over whether or when to sell. It is as simple and straightforward as that!
There are more complicated options for more experienced traders, and there are a variety of other features that a broker can support. It is recommended that you defer using these more complex versions until after you become more familiar with the process and have attained a level of consistency and confidence with your personalized strategy. These last two items will vary depending on how close to the expiration time you are at the point of execution and your asset class.
What other data do you need to make a sound decision? You need to view your preferred set of indicators and key benchmarks to evaluate how the prices might behave going forward. Key benchmarks that come into play are Fibonacci levels, and period exponential moving averages, highs and lows for the day or week, key pivot points, and technical support and resistance levels.
Lastly, you will want to be aware of any significant press releases that might disrupt the trading environment. Be aware that at certain times of day, liquidity is higher and pricing behavior is more consistent with expectations. It is best to avoid these time periods and focus on the most active times of the day. When you determine that your indicators and benchmarks point to specific endpoint, execute an order for an appropriate amount, based on sound money management principles.
This could be supply and demand, outstanding debt, user growth, the list goes on. The problem, however, is that when one tries to apply fundamental analysis on a particular market with a 30 second timeframe. Although there are many quantitative firms that do precisely this, their time frames are often much longer.
If a trader wants to go long or short a company with a timeframe of several months based on fundamental analysis, this starts to make more sense…. The problem with binary options is that they basically necessitate a short-term market outlook, and forecasting markets on an intraday basis is extremely difficult, if not entirely impossible.
This is how binary options brokers win in the long-run. The number and diversity of assets you can trade varies from broker to broker. Commodities including gold, silver, oil are also generally offered. Individual stocks and equities are also tradable through many binary brokers.
These lists are growing all the time as demand dictates. The asset lists are always listed clearly on every trading platform, and most brokers make their full asset lists available on their website. Full asset list information is also available within our reviews. The expiry time is the point at which a trade is closed and settled. The expiry for any given trade can range from 30 seconds, up to a year. While binaries initially started with very short expiries, demand has ensured there is now a broad range of expiry times available.
Some brokers even give traders the flexibility to set their own specific expiry time. While slow to react to binary options initially, regulators around the world are now starting to regulate the industry and make their presence felt. The major regulators currently include:. There are also regulators operating in Malta and the Isle of Man. Many other authorities are now taking a keen a interest in binaries specifically, notably in Europe where domestic regulators are keen to bolster the CySec regulation.
Unregulated brokers still operate, and while some are trustworthy, a lack of regulation is a clear warning sign for potential new customers. We have a lot of detailed guides and strategy articles for both general education and specialized trading techniques. From Martingale to Rainbow, you can find plenty more on the strategy page. For further reading on signals and reviews of different services go to the signals page.
If you are totally new to the trading scene then watch this great video by Professor Shiller of Yale University who introduces the main ideas of options:. In addition, the price targets are key levels that the trader sets as benchmarks to determine outcomes.
We will see the application of price targets when we explain the different types. Expiry times can be as low as 5 minutes. How does it work? First, the trader sets two price targets to form a price range. If you are familiar with pivot points in forex, then you should be able to trade this type. This type is predicated on the price action touching a price barrier or not.
If the price action does not touch the price target the strike price before expiry, the trade will end up as a loss. Here you are betting on the price action of the underlying asset not touching the strike price before the expiration. Here the trader can set two price targets and purchase a contract that bets on the price touching both targets before expiration Double Touch or not touching both targets before expiration Double No Touch. Normally you would only employ the Double Touch trade when there is intense market volatility and prices are expected to take out several price levels.
Some brokers offer all three types, while others offer two, and there are those that offer only one variety. In addition, some brokers also put restrictions on how expiration dates are set. In order to get the best of the different types, traders are advised to shop around for brokers who will give them maximum flexibility in terms of types and expiration times that can be set. Most trading platforms have been designed with mobile device users in mind.
So the mobile version will be very similar, if not the same, as the full web version on the traditional websites. Brokers will cater for both iOS and Android devices, and produce versions for each. Downloads are quick, and traders can sign up via the mobile site as well.
Our reviews contain more detail about each brokers mobile app, but most are fully aware that this is a growing area of trading. Traders want to react immediately to news events and market updates, so brokers provide the tools for clients to trade wherever they are.
So, in short, they are a form of fixed return financial options. Call and Put are simply the terms given to buying or selling an option. As a financial investment tool they in themselves not a scam, but there are brokers, trading robots and signal providers that are untrustworthy and dishonest. Our forum is a great place to raise awareness of any wrongdoing. Binary trading strategies are unique to each trade. Money management is essential to ensure risk management is applied to all trading. Different styles will suit different traders and strategies will also evolve and change.
Traders need to ask questions of their investing aims and risk appetite and then learn what works for them. Binary options can be used to gamble, but they can also be used to make trades based on value and expected profits.
So the answer to the question will come down to the trader. If you have traded forex or its more volatile cousins, crude oil or spot metals such as gold or silver, you will have probably learnt one thing: Things like leverage and margin, news events, slippages and price re-quotes, etc can all affect a trade negatively. The situation is different in binary options trading. There is no leverage to contend with, and phenomena such as slippage and price re-quotes have no effect on binary option trade outcomes.