What are the Different Types of Binary Option Trades?

While the simplistic “up or down” and “all or nothing” nature of binary options trading makes it attractive to traders, especially those who are getting started with trading for the first time and haven’t yet explored spread betting, foreign exchange, or anything similar, the reality of binary trading is that it is not as simple as it might seem.This is not because there are any hidden tricks or secrets when it comes to binary trading, but because binary trading is actually a very general term. There are various different types of binary trading for you to explore, it is not as simple as just saying, “I’m going to be a binary options trader,” and then getting on with it.Before you start binary trading with Bank of Trade and are confronted with a number of different types of trade, take the time to understand what each one entails and how they work. You can then make a decision around which trades to take part in depending on how the risk and potential rewards balance out and inform your binary option strategy.

Up/Down Option Trades

This is the simplest type of trade, and the most common used by beginner binary option traders. All you need to do is decide whether a price will go up or down, and the timeframe in which this will happen – placing a call trade for increases and a put trade for decreases – and then go from there. If your trade finishes in the money – meaning the price went up or down as per your forecast – then you receive a percentage return, which will be detailed before you buy the binary option, on top of your initial investment. If your trade finishes out of the money, then you lose your investment, unless you are with a binary options broker that offers an out of the money refund, which could see you get between 10 – 20% returned, depending on the rate offered.This type of binary option trade is best to use when a market is clearly trending in a particular direction, as choosing whether to place a call or put trade is easy to do against such conditions. Avoid up/down option trades if the market is volatile, particularly over longer periods, when you are a beginner and are new to binary trading.

One Touch & No Touch Trades

One-touch trades are often bought with an expiry date of a week or longer, although you will be able to take part in one touch trading over shorter times should you wish to trade in this way.The difference with a one-touch option against a general up/down trade is that you only require the price of the asset you are trading against to touch a particular target price, hence the name, “one touch option.” For example, if you take out a one-touch option over the space of a week, if the price hits the pre-determined target when you bought the option, you are guaranteed the option will expire in the money irrespective of what happens afterwards. For you, the trade is over at that point, although you usually still need to wait until the overall expiry time before your return is paid out. Even if the price plummets after touching the target, you can still profit.A no touch option works in the opposite direction; if you trade against the price of an asset not hitting a pre-determined level, you are in the money if this price is not hit, in a similar way you would “lay” a bet.One touch and no touch trades are worth having in your binary option strategy if you are unsure about the sustainability of a certain price, or you find an option that you feel offers great reward when balanced against the risk involved. One-touch options are excellent if you believe a particular asset might break out or drop dramatically but not remain at a certain level; no touch is better if an asset has been historically stagnant and there is little to indicate anything will change. The obvious downside of a no touch option is that you will be waiting right until the end of the trade period to see whether you are in the money.

Boundary Trading

Boundary trades are also called range trades. When you are reading binary trading resources, be aware that they are the same thing. Different sites will use one or the other, although sometimes they will use both, even interchangeably. We will call them boundary trades for the sake of this explanation. In boundary trading, you are buying an option for an asset to expire within a particular boundary (or range) hence the name given to them. Instead of buying a call or put option, you buy a boundary trade based on a simple yes or no. Will the asset expire in the boundary at the determined time?Boundary trades are something that you can undertake with potential for success whether you have quiet or more volatile market conditions. While returns can be relatively low from boundary trades, the represent a good investment in a volatile market, as you can trade against the price within the range boundary but also place call or put options on the various levels within each range. For beginners, it is often best to start boundary trading when markets are quiet, but there is a definite opportunity at busier times, too.

60-Second Trading

60-second trading has emerged in 2013 as a popular type of binary option trade, and is favoured by many who are new to the market. 60-second trading is popular because it involves analysis of trends over a shorter time – you only need to know what is likely to happen from one minute to the next rather than over hours, days, and weeks – and it allows traders to make profit quickly and take part in many trades in a short space of time.A 60-second trade is an up/down trade that expires in 60 seconds. It is as simple as that, although there are some extra considerations you need to make before starting 60-second binary trading.The first thing to think about is how often you want to trade. If you want your trades to be fast and exciting, then 60-second trades are excellent, but at the same time you need to have the experience and knowledge of binary trading to identify when a 60-second trade is likely to be profitable.You also need to consider how confident you are trading in such a small window. You might be attracted to 60-second trading because of the potential for higher returns, but you also need to ask yourself whether charts and other things you would ordinarily use add any value. The prices of assets and markets change thousands of times during the trading day; how can you analyse the data at the one-minute level and spot trends?Whether you undertake 60-second trading is obviously a personal choice, but it is recommended for experienced traders. That said, if as a beginner you can spot particular trends, such as sharp increases at the start of day or at particular times, there could be an opportunity to make lucrative returns.The best time to follow a 60-second trading option is definitely when strong trends are seen in the market. If a strong trend inspires an up/down trade, explore the 60-second option for potentially higher returns.

Getting Started

Think about your binary trading strategy and keep these binary options tips in mind when getting started with your Bank of Trade account. Choose the binary options that are best suited to what you want to achieve from trading and that satisfy the level of risk you are willing to take on against your financial situation and the rewards from each trade.

Binary Options Deposits

Overview

The landscape of binary options brokers is vast, and rapidly increasing. Low deposit binary options are amongst the wide array of marketing tactics used by binary options brokers to attract new clients. Binary option trading is a fairly new facet of trading, and is also not internationally regulated. This means that binary options brokers are not held under the scrutiny of any designated authority established to maintain compliance with any regulations, set to protect investors. Simply put, there are no official fiscal qualifications for creating a binary options brokerage, and there is no intergovernmental oversight in place to keep companies honest.The low minimum trade position, is another offering used by binary options brokers to entice investors to open new accounts with their companies. Just as with the low deposit policies, the low minimum position brokerages are not necessarily the best, and are subject to liquidity issues subsequent to their low-cost offerings. We will cover some of the most important things to consider when looking for brokers offering binary options with a low deposit, and low minimum trade positions.

Binary Options Brokers with Deposits of Less than 100$

So, you have heard about binary options, and you are excited about the opportunity to participate in one of the fastest growing trading sectors available online. Perhaps you have come across a few binary options strategies, and have even done some independent demo trading using these strategies, and have found them to be sound. Now, you are ready to begin live trading, and want to find a good binary options broker with an online trading platform. Since you consider yourself a newbie, you want to risk as little of your capital as possible. There are several brokers offering low deposit binary options accounts, and some of them are offering accounts for less than $100.An estimated 90-percent of new binary options traders lose their initial investments; the companies that offer these accounts with low deposits know this. The smaller amount that you invest, the greater chance you have of losing your initial investment. Offering accounts with such small amounts, means that these discount brokerages have less capital on hand for payouts. It is an unsustainable practice to provide lower deposits, in hopes that most of your clients will lose this investment.

Possible Payout Issues

Most investors keep their profits in the brokerage account with intentions of having it available to trade; and, discount deposit binary options brokers are also counting on this. These brokers are susceptible to facing cash flow problems, because their business model does not consider the fact that extreme circumstances can hinder the liquidity of the broker. There are various conditions that can seriously affect a broker’s ability to cover payouts.For instance, let’s say there is a low deposit binary options broker that has had some issues with their trading platform’s functionality, and this has caused many clients to become irate. After a rash of complaints, account holders begin to demand refunds for their investments; and many are even closing their accounts due to this malfunction. While this is an unlikely worst case scenario, the fact that this company allows clients to open accounts for less than $100 may pose a problem at this point; if they do not have sufficient capital on hand to cover payouts.While a broker requiring a larger minimum deposit, may have enough capital on hand to cover the claims and payouts; a company that is accepting such small deposits and trade order positions, may not have enough capital on hand to handle a multitude of requests of this sort. This instance may result in delayed payments; and in a most extreme circumstance, even render the company insolvent. Again, this is a worst case scenario; and offering low deposits and positions does not necessarily mean that a company is not capable of meeting payout obligations. However, there are many more factors to consider when shopping for the right broker. This is why it is important to know what to look for in a good binary options broker.

How to Choose a Worthy Broker

There are a host of factors to evaluate when shopping for a good binary options broker. Bank of Trade knows and understands the learning curve that can come along with being new to binary options trading. Since most binary options brokers have similar website functions and navigation, you can find the answers to most of your questions about the broker’s website in the FAQ section of the website. This FAQ page is usually accessible by scrolling to the bottom of the broker’s webpage to the sitemap area.Below you will find a list of key factors to consider when choosing a binary options broker:

  • Investment Conditions – this refers to the binary option brokers’ minimum and maximum account deposit amount; minimum and maximum trade position amounts; and the binary options deposit methods. If you can avoid starting out at the lowest level, it is probably best to do so. If you are looking to deposit $250, using a broker with a $200 minimum will assure that are coming in at the lowest level. Believe it or not, many brokers offer better support to bigger investors, than they do on those classified as starting with the minimum deposit.
  • Deposit Promotions – it is pretty customary for binary options brokers to offer deposit promotions. These promotions generally come in the form of the broker matching the amount that is invested. A broker may offer to match your deposit of $500 or more. This means that if you deposit $500, the balance in your account will be $1,000. Every broker is different, so be sure to read the details of these promotions closely.
  • Payout – the payout is reflected by the profit potential of each trade. This profit potential is shown in percentage value. The payouts offered differ from broker to broker, but typically range from 60% – 95% return on investment. When on the losing side of a trade, the loss can be between 80% – 100% of your investment depending on your broker.
  • Available Assets – it is common for traders to have a specific list of assets they typically like to trade. This is usually because they are familiar with the nature of the asset, and how it normally behaves. When choosing a broker the available assets will surely be a major factor to consider. You may wish to open up two or more accounts with different brokers to facilitate the trades for all of your preferred assets.
  • Trading Hours – the trading hours of most binary options brokers is dictated by the actual market itself. Binary options brokers tend to shut down on Friday evening at 5pm in New York, and open on Monday at 9am in Asia (which is 5pm on Sunday in New York).There are some options brokers that offer special trading during hours when markets are closed. An example of this is “One Touch” trading, which has a higher payout, but is much riskier than traditional binary options trading.
  • User Interface – the user interface describes the look and functionality of the broker platform. The ease of use and navigation, trade execution difficulty, tools offered, and the overall function of the service is determined by the user interface. With binary options it is important to have large buttons that allow you to respond quickly when you are ready to execute a trade. Other factors with user interface may be the amount of visible assets on the screen at any given point, and tools provided by the broker to assist with making trading decisions.
  • Customer Support – At some point, a trader will likely have to contact the customer service department of his broker. The customer service department is responsible for answering questions regarding: deposits, payments, technical issues, withdraws, and platform functionality. The ability to get your questions answered concisely and in a timely fashion is very important also. Some brokers have a “Call Me” button on their site, and guarantee an answer within 10 minutes during business hours.
  • Trade Room Support – aside from customer support, many binary options brokers offer trade room support. Trade room support offers information specific to trading in efforts to assist you with trade related inquiries. You want to choose a broker that is dedicated to offering the training and support you need to have the best broker/client interaction possible.
  • Knowledge Base and Courses – nearly every binary options broker provide educational material and/or training of some kind. This may come in the form of one-on-one instruction from a senior trader, an e-book, online workshop, or course; to help new traders. Learning is a vital element when first starting as a trader, and having a broker that has sufficient training materials can make all of the difference in the world.
  • Alerts – some brokers offer alerts that are designed to give updates about specified assets. Alerts can be set to indicate that a chosen price point has been reached, and is suitable to trade. The options for alerts vary based on broker, but usually includes: audible alert that sounds from within the platform itself, email alerts, and mobile phone text alerts.
  • Withdraw Process – the withdraw process is different for each broker, and all brokers are required to clearly outline the process and timing for withdraws. Make sure to pay close attention to this before signing up to a broker, because if the process for withdraw is drawn out, it could delay the delivery of your profits.

Binary Options Deposit Methods

Since binary options are traded internationally, binary options brokers tend to offer a wide variety of deposit methods for funding trading accounts. This is done to make it easier for traders worldwide to open accounts with their perspective companies. It should be relatively simple to find a broker that accepts your preferred deposit method. Here we will describe the most popular methods for funding a binary options trading account.

Credit Card Deposit

The credit card deposit is the most widely used option by traders to fund accounts. All brokers accept credit card deposits. Beware if you come across a broker that does not accept credit cards. Be advised that it is not recommended to register with any broker that does not allow credit card deposits. Visa, Master Card, and American Express are accepted by most brokers, but the Discover card is not accepted by many binary option brokers.

Wire Transfer Deposit

While most binary options brokers charge an additional fee for wire transfer deposits; the wire transfer is among the safest of the binary options deposit methods. Most brokers only accept wire transfers from banks located in the United States of America.

Electronic Wallet Deposit

Electronic wallets are websites that operate as online wallets; allowing you to make online payments without having to give vendors your personal information. PayPal is arguably the most trusted of these websites. There are a host of e-wallet websites that are available for deposits to binary options brokers. Keep in mind that there is a delay that can take up to 5 days when transferring money from your bank account to your e-wallet account. To see what e-wallet sites are accepted by any given broker, simply search in the FAQ section of the broker’s site, or contact customer support.

What is the Minimum Position?

The minimum position refers to the minimum required to place an order for an asset. This is not to be confused with the minimum deposit. Once the deposit is made, and the account is funded, you are ready to trade, and this is where the minimum position concept comes into play. Minimum position requirements differ based on the broker used, and can be as low as $1; but are typically in the $5 – $10 range.

Why is the minimum position a criterion for choosing a binary options broker?

The minimum position can offer advantages to a trader by allowing binary options traders to:

  • Minimize Risks – risk management (also called “money management”) is a basic principle in managing investment capital. This process consists of investing smaller amounts, diversifying your investment, and not investing all of your capital. As a rule of thumb, only invest 5% of the capital in your account on any particular trade.
  • Train to Trade – novice traders have the ability to trade with a live account, without risking much capital when first beginning to trade binary options. The emotions of fear and greed that are often associated with binary options trading are minimized when trading with the lowest minimum position.
  • Multiply Chances to make Money – by choosing the lowest minimum position, you are able to engage in more trades, thus improving your chances as making a profit. If your initial investment is $200 and you have a trade using the lowest minimum position of $5, you can trade 40 times, as opposed to only being able to trade 10 times at a $20 minimum position.

Summary

As you can see, finding a broker that offers low deposit binary options accounts, is the least of the factors to consider when looking for a good binary options broker. Before deciding to register with a binary options broker based on low minimum deposits; it is best to keep in mind the overall functionality of the platform. You should also take into consideration the amenities, education, and support provided by the broker. In conclusion, instead of looking for brokers offering binary options with low deposits; look for the broker that will offer an all-around fulfilling trading experience.

Binary Options Withdrawals

How money is supposed to be made trading with binary options?

There is no doubt that binary options have become one of the hottest investments available online. Brokers have popped up indozens over the past three years and financial websites are covered with advertisements promoting 75% profits which can be gained in just a few minutes with this exciting new way of trading. Known as ‘all-or-nothing’ or digital options, binary options allow traders to purchase options in stocks, currencies, indices and commodities amongst other markets. They expire, after a predetermined amount of time, either in or out of a predetermined value of money. Typically, this can range from 75-85% for regular binary options, with losses starting from 85% of the investment.Successful traders have both started out with binary options or migrated to binary options platforms from forex or stock trading. They make money through a simple process of correctly predicting if an underlying asset will close higher or lower to win a predetermined amount of money. This is then happily withdrawn from the trading platform to their bank account or e-wallet. Whilst getting their hands on winnings is the single most important feature for most binary options traders, it is true to say that there is a fair amount of scepticism surrounding just how forthcoming binary options brokers are in actually providing these pay outs. Many traders have experienced problems with this and several brokers have become notorious in making it very difficult for traders to take funds out of their accounts once deposits have been placed in these.

How safe are binary options deposits?

Binary options deposits can be made in a number of ways with most brokers offering e-wallets, credit card funding and direct bank transfer. For new traders, many broker encourage a first deposit as soon as possible in order to enable them to begin trading with binary options. Of course, these traders will want to know that their deposits are safe and, more importantly, that they will still command control over these deposits once they have handed these over to the broker. This is where research and the advice of experienced traders will provide the primary source of information. By far the most important element to consider are the basics of whether a broker is legally registered and also if they provide the minimum security features when making the initial payment. As always, never provide your financial details directly to any third parties representing the broker and steer well clear of those with poor withdrawal histories as this may indicate a lack of cash funds behind the broker.

Why do people experience withdrawal problems with binary options accounts?

To be fair to many binary options brokers, there is always a ‘clearance period’ between executing a withdrawal request and receiving the funds through any of the payment methods. Many complaints actually occur within this period only to result in the payment being made within the next few days but give the impression of an unreliable broker to those who see the post. However, there is a difference between being able to withdraw and never receiving the payment and we will address some of the problems that have been experienced trading binary options with other brokers.One of the most common reasons for some brokers refusing to allow a withdrawal from a client is the inclusion of a bonus in the account. This is a cash payment, often up to 100%, which is made by the broker in to the account of a new client. Whilst the trader may go on to trade successfully, the terms and conditions stipulate that a certain number of trades up to a certain value must be executed before the withdrawal request is made.Another difficulty with binary options, experienced by new traders especially, is that a minimum withdrawal amount is often required. Since financial transactions cost brokers money, many seem quick to accept deposits but slow to reverse the pay-outs. A consistent complaint regarding the banc de binary withdrawal process points to this even though they have a fairly low withdrawal minimum of 100 USD. The main concern for many disgruntled clients is the withdrawal connected to the bonus which requires a large number of trades in order to be eligible for release. Complaints have also been centred on the provision of a ‘free’ demo trading account which requires a deposit. However, if the client wishes to redeem their deposit without real-money trading it will be subject to a 7% handling fee.

After reading this is it safe to trade with binary options brokers?

Many new traders are rightfully worried about both the safety of their deposits and also whether they will be able to redeem their funds when they want. Since there is a vast amount of information relating to scams brokers and customer complaints, it is understandable that many may not want to risk transferring their funds to an unknown and unreliable broker. However, for every bad experience it is reassuring to know that there are many positive binary options trading experiences and many thousands of traders who do not experience problems in withdrawing their funds or fear for the safety of their deposits. These traders have likely made a number of decisions which has enabled them to source a reliable broker and deposit with the peace of mind that they will be able to redeem this and any winnings whenever they choose.

  1. Check the terms and conditions of the broker to make sure that you are fully aware of the facts. Most reputable brokers will have this available on their website and it should clearly stipulate the withdrawal procedures and the minimum withdrawal amount. Bank of Trade provide this clearly to all clients and ensure that everything which may have caused problems with other brokers is clearly explained to all new traders.
  2. Think about whether accepting a sign-up bonus is really going to worth it. Whilst 100% bonus sounds amazing to many new traders making smaller starting deposits, it is worth remembering that these often require a minimum trade-through in order to stop people simply signing up and withdrawing the ‘free’ cash. Many new traders fail to read the small print regarding this and end up in a situation where they are unable to retrieve funds from their account until they comply with this agreement.
  3. Thoroughly research your chosen broker and contact its technical support if necessary to discuss the withdrawal options available. Make sure that you understand any restrictions which may apply as well as noting any difficulties that other traders have experienced in trading forums before committing the deposit.
  4. Certify the broker’s credentials. Bank of Trade provides full and transparent information of its credentials as a reputable broker with the required cash reserves to cover all winnings, however some brokers do not. Make sure the location and reputation is agreeable and also be especially cautious when providing any requested personal information such as I.D and bank details. A good broker will never compromise the security of your depositing method and those that request inordinate details are likely to be involved in a scam process. Whilst many brokers will require documented I.D, always make sure to eliminate your full banking details when transferring documents via email and be especially cautious with some forms of money transfer such as Western Union.
  5. Finally, check that you understand the charges that a broker levies on withdrawals. It may be that this has a monthly maximum limit, or each withdrawal has a processing fee.

Summary

There are some binary options brokers who give the industry a bad reputation when it comes to the withholding of withdrawals. Many of these will instantly divert unsuspecting new traders to the small print of their terms and conditions in order to justify non-payment. Others will point to the conditions attached to accepting a sign-up bonus whilst others may simply be a downright scam.Binary options trader, however, can protect themselves from these problems by conducting thorough research on potential problems which may be associated with binary options withdrawals. The most simple of all is to review the experiences of other with a straightforward Google search or close investigation of a broker’s terms and conditions in relation to withdrawing both the initial deposit and winnings. Bearing in mind, however, that all financial transactions will experience a clearance delay, this prior research will help avoid the difficulties experienced by a minority of binary options traders.When searching for a broker who will not cause problems for clients wishing to withdraw the reputation, location and financial standards need to be taken into account. Several high-profile complaints, including banc de binary withdrawal procedure, have made new traders wary of a binary options scam. However, more customer-orientated brokers such as Bank of Trade have established a solid reputation as providing an excellent overall withdrawal procedure and consistently provide their clients with a reliable depositing and withdrawal experience.

A Beginner’s Guide to Understanding Financial Markets

Getting started with any type of financial trading requires some level of knowledge of financial markets. Because binary options trading doesn’t actually involve the purchasing of an underlying asset – just an option for a particular outcome – many people view it as an easy way to get started with trading without having to learn about the markets. Individuals who take this approach often quickly find that they have made a mistake, and stop trading before they experience catastrophic losses. Make no mistake; understanding how the financial markets work is as crucial for binary option trading as it is for trading on the stock market or in foreign currency, for example. Understanding financial markets can also go a long way to helping make sense of financial charts, technical analysis, and various other aspects that come together to create your knowledge bank when you start trading. The biggest step you need to take when understanding financial markets is to discover which factors can influence these, and how this can translate into your binary option strategies.

How This Helps Binary Traders

Although you are trading against the price of an asset rather than purchasing an asset yourself, you still need to know what is happening in the markets in order to give yourself the best chance of buying profitable options.Multiple factors could come into play in respect of the markets, some examples are:

  • Companies releasing trading results.
  • Governments announcing new economic policies or measures.
  • New products being announced that impact a particular industry or commodity.
  • Media comments from authoritative brokers or analysts.
  • Common price trends, such as gold dropping after Christmas and rising steadily throughout the year.

If you know when these events are happening, you can do two things. First, you can look back at what happened in the markets the last time there was such an occurrence. For example, what happened to the markets when the United States last raised their debt ceiling? Is the same thing likely to happen should they do so again? Secondly, with the information you have, you can make decisions based on what is likely to happen and position yourself for some profitable trading activity. One binary options trading strategy you might consider is to trade prior to such announcements, when the markets tend to be calm as people are wary of trading before a potentially big change. As a binary trader, you can use boundary options or no touch trades to be profitable in such conditions. Look online for an economic calendar that you can download and place near your system, or even set alerts in your smartphone for a week or two before the event so you can research previous trends. In terms of taking advantage of flash stories, such as Apple suddenly announcing a new product, the experiences you pick up from binary trading will prepare you for doing this; clearly, if a story is happening now there is no point in researching the past, as you need to act in the present.While there might be obvious repeat trends around big announcements, apparent “good news” will not always help in the way you’d expect. For example, on the face of it, unemployment figures falling might seem a positive, but markets could react negatively if banks then decided this was a sign they could remove any easing or economic provisions that were in place. Act decisively in your trades, but ensure you understand what is happening rather than working on assumption and previous history alone.

Defining Financial Markets

What are the financial markets you need to be looking at, and how do they work? Defining something as a “financial market” is actually very general. A financial market is essentially anywhere traders can buy and sell stocks, shares, commodities, or foreign exchange. Most people will immediately associate a financial market as the stock market, such as the FTSE 100 or NASDAQ. At Bank of Trade, you can trade binary options on a range of markets, including, but not limited to:

  • Stock indicies. This means you are trading against the overall index price of a stock market.
  • The price of stocks and shares in specific companies.
  • Foreign currency performance against each other.
  • The price of commodities, such as gold and oil.

The areas where you choose to trade will determine where you look for the market information we highlighted earlier. For example, the performance of a particular company might not make a big difference to the overall index of the market they are listed on, but it will influence their own share price. Larger companies’ performance will likely have an influence on wider markets. For example, if HSBC announced huge profits or losses tomorrow, their results would affect the FTSE 100 market, other banking institutions, and probably have further permutations, too. All of these could provide separate opportunities for binary option trading.

Trading Outside of Known & Notable Events

Financial markets are open throughout the year, not just when announcements are being made. While your economic calendar has created a number of points of focus for your binary trading activities, you also need to be able to trade and be profitable at other times throughout the year. Thankfully, the number of possibilities that binary trading can bring means that you are able to do this even when the markets are relatively quiet. As you are trading against the price and not buying an underlying asset, you have an advantage in that you are not actually reliant on the upward movement of an asset to a certain price to be in the money.It is also worth noting that markets can still move dramatically even without there being any apparent background story behind it, so don’t just sit around waiting for the obvious opportunities.

Where to Learn Financial Analysis

You can access all the resources you will need to become a competent analyst of financial markets here at Bank of Trade. Most of what you need to know having understood the impact of external events on the financial markets will relate to spotting trends and patterns that enable you to make profitable trades repeatedly. Using these resources is a great way to make the link between what you know and what actually happens.This will help you enjoy profitable binary trading because you will become competent at working with financial charts and conducting analysis without the added benefit of knowing the likely impact an external factor will have. Of course, you should continue to take advantage of obvious market shifts and trends based on what is happening in the wider world, but ensure your binary options trading strategy enables you to trade and to be profitable at all times.

Creating Your Own Analysis

In addition to the factors we have already explored, you should keep a diary where you note trends based on other occurrences that may influence the various markets. For example, what happens to share prices in the United States when a hurricane threatens the East Coast of the country? Does snow across the United Kingdom influence share prices when the country is at a standstill? You can never really go too far in terms of your analysis. Remember that with binary trading you are only looking at whether a market will move up or down or trade in a particular range. You don’t need to calculate the level a commodity or foreign currency needs to reach before you make a profit, you only need to know how a market behaves and how this translates into a sustainable binary trading strategy in terms of your options expiring in the money.

Understanding the Markets

By signing up for a binary trading account with Bank of Trade, you can start learning about the finance markets from our team of trading experts while also means-testing the points we have raised here. Use your trading platform to analyse for yourself what happens when announcements are made, and put all that knowledge to use when you start to trade binary options. Understanding the financial markets is one thing, putting your knowledge to use and ensuring it turns into profitable trading is another. See how it works for yourself, couple what everyone knows about financial markets with your own analysis and trend spots, and enjoy successful trading whether you do it as a hobby or as a serious money making initiative.

What is Binary Options Trading and How Can You Get Started?

Types of Binary Options Traded

Anything that is traded in the global financial markets can be subject to a binary trade. Many trading platforms, including our own here at Bank of Trade, will offer a wide variety of trading options and opportunities, while others might specialise in a particular area.Typically, the following options will be available for you to trade:

  • Stock options for publicly traded companies, from large corporations such as Facebook and General Electric to smaller public businesses like Questcor Pharmaceuticals and NIC.
  • Foreign exchange and currency pairs. As well as trading options based on the performance of individual currency, you can trade currency vs. currency by placing a call or put trade on whether the US Dollar will increase or decrease against the Euro, for example.
  • Indicies based on the performance of an entire market, such as the NASDAQ, FTSE, and Nikkei markets.
  • Global commodities, allowing you to be involved with gold or oil options trading, along with many others, if you wanted to be.

As well as global markets, some online platforms will enable you to access individual markets, so if something grabs your attention in the Middle East or Africa, for example, you have the opportunity to trade. Emerging markets such as these can be particularly fruitful for those involved with digital options trading, especially when prices are increasing rapidly and one-touch options are available.Again, the “all or nothing” nature of this type of trading means anyone can get involved with only a basic level of knowledge of how financial markets work; it is as simple as reading a chart and identifying a trend!

Binary Trades: An Example

If you are new to binary options trading, it can be difficult to understand how returns are calculated. To enable you to understand how it works, we have put together a step-by-step guide of the process you will go through when you start trading. For our example, we have used gold as the commodity, but the same would apply whether you were trading indices, foreign currency, or individual stocks.

Your Option

Your online platform asks whether you believe gold will be above $1000 by 12pm. If you believe that it will be, you would place a call trade. If you disagree, you would place a put trade. If you already hold a call trade but believe the price will fall, you will also have the option of selling the call trade.It is now 11am, and the price of gold is $970. You believe it will hit the $1000 price by 12pm, so you purchase a unit of five call options, which may cost $50 each. We know that you will either have a nil return, or earn $100 dollars for each unit, depending on whether your trade expires in the money – at $1000 or above – at 12pm.From this, you can calculate the risk you have taken on and the potential return.

  • Potential return = $100 x 5 units = $500.
  • Options purchased at $50 x 5 units = $250.
  • Potential profit from a successful trade = $500 return – $250 purchase = $250.

At 12pm, gold has hit $1007, earning you $250 profit.Selling a call or put trade prior to expiration is possible, and this is usually done as a means of limiting losses if you feel your trade is not going to expire in the money. These can be difficult to sell on, particularly if the expiry time is close, but it is often possible to sell trades to investors with large amounts of capital who are happier to take on an increased level of risk and can afford to take the chance.

How to Maximise Your Earnings Potential

Any investment or trade invariably takes a road back to the same question: “How can I make the highest possible amount of profit?” As with any type of financial transaction, much depends on the strategies you look to employ throughout your binary option trading.Using a range of strategies should, over time, enable any trader or investor, particularly as they become more experienced and skilled at trading, to maximise profits and limit any losses they suffer. The latter is especially important; the pitfalls of chasing losses are well known in respect of all types of trading and investing, but it can be easy to fall into this when binary trading as one successful trade can fast recoup a loss.Binary options trading beginners ought to spend some time taking in the articles and resources featured here on Bank of Trade, so they can gain an intimate understanding of managing their trades and strategies for doing so. This type of trading is unique in that you may find yourself taking higher levels of risk for smaller rewards than you ordinarily would. Establishing your knowledge of binary stock trading will enable you to devise a strategy for success; you should also consider connecting with experienced traders and investors through the many binary options trading forums that are available across the internet.

Improving Your Trading with Bank of Trade

If you are smart and calculated with your investments or trades, huge profits can be earned from binary options in as little as 15 minutes. If you ever read an article online, or in a magazine or newspaper (most of us have!), about a trader who worked for no more than 15 – 30 minutes a day and made a fortune, and doubted it, then you are about to learn how it could become reality. At the same time, we must be clear that trading binary options is not some kind of “get rich quick” scheme, and nor is it glorified gambling. You will only be successful if you take the time to understand how to make the most of your trading and take in all the available knowledge and learning, both online and elsewhere.At Bank of Trade, we offer our binary option account holders access to real time data and tools, as well as to wisdom from experienced, successful traders, giving them every opportunity to learn, improve their own trading, and ultimately make the levels of profit they desire. Whether you are new to binary options trading or even to online financial platforms entirely, or have had some involvement with these in the past, our resources will enable you to become even more competent using our system.In addition to these opportunities, you can also enjoy support in whichever way you prefer, be it live online chat, email, or telephone, when you are trading so you are always sure of what you are doing. We will not tell you what to do in terms of placing your call or put trades, but we can make things clear and easy to understand so you can benefit when you start trading.

Pros and Cons of Binary Option Trading

Like anything in life, there are upsides and there are downsides to binary option trading. However, one positive feature of the negatives is that you can control most of them yourself; the downsides of binary trading usually only come into play if you make choices that facilitate this.The biggest advantage of trading binary options instead of using other spot trading platforms is tat you know the riskeward balance when you buy your call or put trade. In contrast, while you have historical data when trading forex or on the commodities markets, in reality you have no idea what your potential losses or gains might be. Yes, you could probably run this through a simulator similar to how a private equity investor would use deal flow software, but ultimately it is all hypothetical data.The range of options available is also beneficial, as traders can assess various assets and act accordingly whenever a market is open. Compare this to a forex or commodities trader who uses these markets exclusively; where do they go when their markets are in decline or stagnating? The simplicity of binary options is most often cited, especially to beginner traders. Because a trader can simply address the yeso question of whether something will hit a certain price, they can get started immediately.One of the most notable downsides of binary options trading is that, while the “all or nothing” nature is attractive, it often means traders have to be correct with their call or put trades a high percentage of the time in order to make good money. You are in control of this, however, as you should only lay high sums of money when you gain experience and are confident in your ability to be correct more often than not. While critics of binary options trading often cite this method as gambling owing to the riskeward balance, the truth is that smarter investors who understand the market are making educated trades, with only a small element of chance involved. After all, it is impossible to predict with 100% accuracy how a market will behave.Also, when binary trading the trader has to predict the time when the price will be higher or lower. This adds pressure to binary trades, whereas with other spot trades you can simply hold your position and then sell when you reach your stop-loss limit, or when you believe a price has reached a peak.Another potential con of binary option trading is the level of regulation present across the market. Regulated binary options trading platforms are available, including at Bank of Trade, and they should be sought at all times. Using unregulated platforms might be tempting, particularly if inflated returns and the like are advertised, but you will ultimately be taking an increased level of risk not justified by the potential returns.

Identifying Potentially Lucrative Trades

If you are looking to get started with options trading right away, you can look at two main options for identifying ‘easy win’ trades. We have summarised these below:

  • Identify assets, currencies, commodities, or stocks that are underperforming or that have recently been the subject of controversy. For example, if a publicly traded company has recently released their year-end accounts, and profits were massively down against expectations, the share price would have inevitably plummeted. In the most serious situations, the CEO of a company might lose his or her job, and the incoming successor will announce a number of plans and ideas for turning the business around so it hits targets once again. Alternatively, it might be the case that, over the coming days, people start to see that the results, while bad, were not as serious as initially feared nor terminal within the context of the future of the company. While financial traders might like to emit a cool, calculated vibe, the truth is more that they are as prone to panic as anyone. Whenever there has been an unexpected crash, growth is almost certain to follow. Stay in tune with the news and place your trades for easy wins at the opportune times.
  • Binary options trading is popular among traders because it offers opportunities when markets are stagnant. Even in the most challenging economic conditions, markets do not stagnate forever. If a commodity, asset, or share has been steady for a prolonged period, it is likely to increase or decrease in value in the near future. Remember that when you trade binary options, you only need a minute movement for a call or put trade to expire in the money. While stagnant markets are a turn off to traditional investors and traders, to those involved with binary options, they are a massive opportunity, particularly when dealing in 60-second and one-touch trades.

Summarising Binary Stock Trading

The nature of trading binary options means not just finance experts and professionals are able to use such platforms for generating revenues. At the same time, it must be recognised that you cannot hope to enjoy success with binary trading or any financial platform without committing to understanding exactly what it is you are doing. Dealing in binary trading options requires you to be able to think on your feet and make fast, clear, and decisive decisions based on the data at hand. While it is a fast moving method of trading, anyone with a head for figures and a business-centric brain can exploit the huge opportunities on offer.Using a platform like Bank of Trade enables you to access a wide range of global markets, as well as benefit from expert analysis and advice designed to make you the most successful binary trader that you can be. Before long, you will become a credible, confident trader yourself, and so not rely on what you learn at Bank of Trade, although our resources will always be there to assist and guide you, whenever you need to access them.Be sure to understand what binary trading is 100% before you sign up to an account or begin to work with a broker. You need to know everything from how you get paid to any commissions and fees that you are subject to, and everything in between.

Get Started Now at Bank of Trade!

Getting started with trading binary options is easy at Bank of Trade. Now that you know all you need to about binary options, what they are, and how to trade them, we will share the simple process of getting online with us and starting to make your own profits.What do you need to do?

  • Step one is to open your account, which is a guided process that takes a matter of minutes. Simply fill in the necessary information and confirm your account in the email we will send to you.
  • Account opened, you then need to add some funds so you can start trading right away. You can use a range of debit and credit cards, and fund your account with a variety of global currencies.
  • Choose the markets you wish to trade in. It is preferable to stick to one that you already have prior knowledge of, but if you are totally new to online trading simply choose the one that interests you the most.
  • Make your first trade by buying a call or put option, then come back at the expiry time to see whether you are in the money.
  • Use the wealth of resources available at Bank of Trade to further enhance your knowledge and become even more proficient at trading binary options.

Are you ready to take advantage of the opportunities binary options trading can bring to you? Why not open your account at Bank of Trade now and start trading immediately.

The Basics Of How To Trade Binary Options

Binary options trading is one of the most straightforward ways to speculate on price movements in financial markets. The underlying concept is simply to choose whether price will be higher or lower than the current (strike price) after a matter of minutes, hours or days. Taking this as the starting point of how binary options work, the key decision for binary options traders is when their options will expire. The expiry time will determine whether you have made the right call, higher or lower, and therefore if the purchased options can be considered “in the money” or “out of the money”.In order to explain how to trade binary options most effectively, it is important to understand first how it differs from regular trading. Whilst conventional trading is also based on the concept of higher and lower trades, binary options offer both predetermined profits and losses. This is because binary options trades do not rely on price moving dramatically away from the strike price in order to generate large profits.One of the key factors in learning how binary options work are that they only need to expire a single tick higher or lower than the strike price in order to be considered profitable. The returns provided by winning options, which are typically around 85% of the investment, are agreed before the binary options are even purchased. Potential losses are also known in advance and cannot increase during the lifetime of the binary options. This provides for both highly controlled risk and the ability to be profitable with minimal price movement.Most platforms, including Bank of Trade, provide a useful educational area for those looking to learn how to trade binary options. The simplicity of binary options, however, means that many new traders can simply open an account, select their market and choose their investment on higher or lower options. Once a timeframe for expiry has also been chosen a trader can see exactly how much the trade will risk and how much it is set to win if they are correct.

How binary options work

The concept behind how binary options work makes it particularly attractive to both new and experienced traders. Many potential speculators have often avoided trading because of the fact that, although they have a feeling the market will move in this or that direction, they are simply not sure if it will be worth the investment. Using binary options, however, price does not have to swing wildly in the favour of the investor and those who can predict even the smallest short-term movements in a price can end up being very profitable traders.Binary options form a derivative market of the underlying real price of currencies, stocks and commodities amongst others. This is essential in understanding how binary options work because it means that binary options prices are approximately those which are seen by professional traders and which also means that their methods of technical and fundamental analysis can also be successfully applied to binary options.

An example of how to trade binary options

A typical scenario, to explain in greater detail how binary options work, begins from the analysis of a market. In this case a trader may be looking at gold, anticipating a rise in price as political tension escalates in the Middle East. Knowing how to trade binary options online, the trader enters their platform such as Bank of Trade and is instantly quoted a price. Since she thinks price is heading up, she purchases 100 USD of call options with a 3 hour expiry and 75% return. Watching the news as stock markets begin to fall, the real price of gold begins to climb and three hours later is several points higher than the original strike price. In the ten minutes it took to learn how to trade binary options and the three hour expiry, the binary options have expired in the money with a 75 USD profit.

Benefits of understanding how binary options work

For the increasing number of new traders wanting to know how to trade binary options, the benefits that they offer over other forms of trading are highly attractive. Perhaps the most important of these is the ability to strictly limit the financial risk associated with any form of speculation. Whilst warnings relating to the potential for losses to exceed your initial capital are common in forex trading, binary options are unique in allowing traders to agree on the risk before the trade is placed.The fact that both potential profit and loss are pre-determined is a unique benefit which not only allows traders to only risk what they can afford with each investment, but also to remove the problem that stop-losses can create trading. Since binary options don’t require the placing of stop-losses to reduce the fixed risk level it also allows for each binary option investment to run until expiry with the potential to expire profitably throughout.

Other reasons why many traders prefer to trade binary options

An additional benefit, for those either new to trading or specifically learning how binary options work, is that it takes very little capital to begin trading. Almost all binary options platforms offer 100% web-based trading platforms which allow registration and new traders to purchase their first options in a matter of minutes.Platforms such as BankOofTrade.com not only allow direct access to all binary options markets from one screen but have definitive guide to show new traders how to trade binary options. Accounts can be opened from a little as 50 USD which demonstrates just how far trading has come from its traditional image of allowing only those with large amounts of capital to make money trading stocks, currencies and commodities.A concern of many market speculators and traders has always traditionally focused on the fear that if markets aren’t swinging wildly up or down then large profits can’t be made. One simple reason why all traders should learn how to trade binary options is that they can be traded equally successfully in both volatile and flat markets. Since binary options only need to expire a tick higher or lower than the strike price, even the slowest and seemingly most inactive markets can potentially be very profitable. Again this benefit removes an additional concern for traders but also makes binary options tradable day or night and on both eventful and uneventful trading days.

How to trade binary options in Three Easy Steps

As we have already seen, the benefits of trading binary options have made them one of the most popular forms of speculation available to online traders. The returns on in-the-money trades are very generous, typically starting from 85% of the initial investment, and anyone can trade from home within a matter of minutes. Binary options offer some of the highest rewards for short-term traders and these profits are attainable to anyone with an internet connection who wants to know how to trade binary options in three simple steps:

  • The first step after registering with a reliable broker such as Bank of Trade is to know what you want to trade. There are literally hundreds of available markets but many traders will have a particular stock, currency or commodity that they are particularly interested in. Click on this market within the trading platform and move to step two.
  • Step two is to decide whether you think that the market will be moving higher or lower in a given time period. The answer to this will depend on both your own analysis and also how long you want to allow before the options expire. This can be a matter of minutes to several hours or days but it all relies on a simple, higher-or-lower call for the options.
  • Finally, the third step is to decide on how much you want to invest in your trade. This is where binary options very helpfully tell you exactly how much you are set to win or lose at expiry. Winning can typically offer a return of 85% whilst, even if you lose, many brokers will offer up to 15% of your initial stake as an insurance. With these values pre-determined, it means that traders can manage their risk highly effectively without worrying about placing stop-losses or losing more than they expected in highly volatile markets.

Binary options trading for beginners: learning how to trade binary options

As binary options grow in popularity, so the available trading platforms grow in quality. As a fairly recent innovation, spanning only a few years rather than decades as a widespread form of trading, binary options has really taken off amongst both new traders and those who already have experience trading financial markets.The straightforward learning curve of how binary options work is both easy and painless and there is a wealth of information to newcomers to assist with their trading strategies and also how to exercise good money management as the key to becoming a profitable and successful binary options trader.

Choosing a platform to trade binary options

Learning how to trade binary options on a platform can be as easy as three steps but choosing the platform can require a little more time. Given the multitude of available brokers, new traders will often be tempted to open accounts by the bonuses offered in the form of cash incentives once a deposit has been made. Whilst these are not a bad thing and can offer a nice introduction to trading binary options with ‘free’ money, there are other factors which should play a major role in the decision to trade with a particular broker.Most of the decision process for traders signing up to a binary options trading platform in order to learn how to trade binary options should be based on the information that they contain. This may initially be the quality of educational and support services, followed by the number of markets that they offer as well as the average pay-out that they provide for successful trading. Additional factors will depend on whether the preferred expiry times are supported; with some brokers offering super-rapid 60 second binary options and others allowing for longer expiries as well as additional forms of binary options trading such as ‘touch’ or ‘range’ trading.

3 Binary options trading strategies

Binary options trading strategies vary depending on a number of factors including person trading preferences and the expiry timeframe that is targeted by the trader. A number of strategies exist which can be used successfully and are good examples in order to learn how to trade binary options using different levels of risk and aggression.

1. How to trade binary options with a Long term strategies for conservative trading

The idea behind conservative, longer-term strategies is to allow new traders to generate consistency in order to grow a trading account which can then graduate to trading shorter-term opportunities. Far from being the boring way to learn how to trade binary options, this is how most successful traders build their accounts, taking slow and methodical trades where there is a high probability of success than multiple fast and risky trades.

An example

One example of this is to trade breakouts of long-term consolidation areas on large timeframes, following a good understanding of how binary options work. Consolidation ranges appear on all timeframes but are particularly powerful on the longer timeframes where price movements are more predictable. Consolidations occur when price becomes trapped between a nearby high and low and they are defined by the price bouncing between these two levels over a period of time and as shown by the red lines on the chart below.Typically, when price ‘breaks out’ of this range, it offers binary options traders the opportunity to take advantage of the momentum that occurs when the market finally decides which way price should go. However, rather than buying or selling binary options as soon as price springs out of the consolidation range, conservative strategies show us how to trade binary options by waiting for confirmation that this is a definitive trading opportunity. This involves waiting for price to break out of the consolidation area, either up or down, before returning to this level to ‘confirm’ that this is now a new supportesistance zone.This scenario can be seen hundreds of times on many different timeframes as price springs out of its consolidation box before pulling back to check that this is a genuine market move. Purchasing options in the direction of the original move when it returns to test this new supportesistance level provide a high probability setup.

2. How to trade binary options with a semi-conservative strategy

One of the great things about binary options is the ability to place two opposing trades within the same market. This is almost unique to binary options as most traders will know that placing an opposing short (sell) trade, for example, in to a market where you already have a long (buy) open trade will simply close the position. In binary options, however, this is not the case and an important feature of learning how to trade binary options is the ability to ‘hedge’ a position to reduce your losses. Hedging in this scenario simply means placing an opposing order to lower the risk of potential losses when price moves against a trade and threatens to expire the options ‘out of the money’.

Using hedging with this strategy

Hedging may seem like a strange way to trade at first, until it is incorporated in to a break-out strategy from an area of consolidation. This strategy requires a trader to understand how binary options work in terms of their expiry and attempts to trade for a shorter period of time than the conservative strategy above. When a breakout occurs, binary options are purchased in the direction of the breakout after the first bar closes out side of the consolidation area shown by the red lines on the chart. The strategy relies on momentum and, ideally, the options will be set to expire after 3 or 4 bars following entry in to the trade.A good deal of breakouts will continue higher for a period after the first bar breaks out and allow expiry in the money. For those that don’t, this is when learning how to trade binary options alongside hedging becomes incredibly helpful. If the options are purchased in the direction of the breakout and price begins to falter and show signs of a false breakout, pulling back towards the consolidation box, the trader needs to only open an counter-trade in the opposite direction as close to the original strike price as possible. This means that two positions, both long and short, will then be open at the same time.

Why would hedging a position help a trader become more successful?

The rationale behind this, where one position is likely to close in the money and the other position closes out of the money, is to only trade the genuine breakouts and neutralise the risk of being caught in a false-breakout scenario. Learning how to trade binary options in this way will often result in profitable trades of 75-85% of a trader’s investment. Should the breakout turn against the trader, a losing position will result in losses of 85% (assuming a 15% insurance payment is made by the broker on losing trades). If this position is hedged using this strategy not only does this minimise losses but it allows the trader to only trade positive, profitable breakout trades and substantially reduce exposure to risk over time.

3. How to trade binary options with an aggressive breakout trading

In order to learn how binary options work, many traders will find it easier and more attractive to focus on the low timeframes, in order to monitor how prices move on a chart. Alongside the strategies above, binary options trading also allows rapid expiry times of as little as 60 seconds. Although this is the most risky, it can be used to take advantage of momentum trades such as breakouts both with and against the direction of the price movement.

An example of this strategy

On the 5 minute chart below, the top of the consolidation zone is highlighted by the red line which is broken. There are two binary options trades here, the first arrow in the direction of the breakout after the close of the first 5 minute bar, and the second with the formation of the shooting star candle signifying the first retracement. Both of these could have been traded using just 5 minute options and would have been profitable and learning how to trade binary options using price-action analysis such as this can be highly rewarding.

Why do people think that binary options is a scam?

Those new to trading and especially those learning how to trade binary options are entering an exciting but not risk-free world of profit and loss. Since all financial speculation comes with an element of risk, binary options is about as safe at it gets to ensuring that the risks are fully known before placing the first trade. Some traders may assume that binary options trading is a scam, seeing the rise in the number of online trading platforms must mean that there is a lot of money to be made exploiting those who part with their money purchasing binary options. This is wrong for a number of reasons, with the primary problem that those who consider binary options trading a scam is that they have failed to learn how to trade binary options before starting to trade.

How to trade binary options with money management and by avoiding scams

Binary options’ trading is a very straightforward way to speculate on financial markets, although it also requires that traders exert a degree of money management and control of their risk. Those traders who think that binary options and financial markets in general are scamming them have often overexposed themselves to large and risky trades, rather than first learning how binary options work before only risking a small amount of trading capital on each trade. The golden rule of money management and how to trade binary options without over-exposure is to risk no more than 2% of any trading account on each investment. This is used by professional traders to prevent them getting overexcited and blowing their account on a high-probability, but never absolutely-certain trade.

Do scams in binary option trading exist?

Scams, of course, do exist. As binary options continue to rise in popularity and more brokers become available online it is increasingly important that traders choose carefully with whom to trust their deposits. The most important advice here is to check where a potential broker is registered, where it holds your funds and if people are taking positively about them in the many forums and information websites available free online. Contact their customer support if necessary and get a feel for their response and professionalism as well as finding out if they provide any help to show you how to trade binary options and provide good explanations on how binary options work.All decent platforms will provide educational material on how to trade binary options and those that don’t should be avoided. Most importantly, find out from other traders who they trade with them if they have had any negative experiences. Finally, don’t deposit your full trading allocation initially, start small and get a feel for the platform and company before transferring any larger deposits.

Summary

Binary options’ trading is changing the world of trading for the better. Not only does is out-compete all other forms of trading currently available with the potential for lower-risk trading, zero commissions and the most straightforward trading platforms, but it is accessible to all regardless of previous trading experience. Whilst it is important to stress that learning how to trade binary options is essential before trading, for those that do binary options offers a world of genuine 24 hour trading and the potential to make substantial profits.

What are Binary Options? A Beginner’s Guide to Option Trading

When you first begin looking into online trading options, it is likely that your initial ports of call will be things like spread betting platforms or foreign exchange platforms. Those who are looking to make fast money might even find betting websites that offer financial spreads. An alternative to these types of trading is options trading. At Bank of Trade, we specifically deal with binary options.What is binary options trading, and why is it a sound financial opportunity?

Binary Options Explained

Before going into detail about binary options trading, it will be easier to understand the matter if we take a step back and look at options in general. In normal options trading, in fact, wherever options are involved anywhere in life, owning an option gives the owner the right to buy or sell something at a set price prior to a deadline, should they wish to do so.For example, if you saw a second hand car on a forecourt near to your home, but did not have the money to buy it, you could negotiate with the salesman and buy an option, which you would pay for, to buy the car at an agreed price at a point in the future. This would allow the salesman to make some money while keeping the car off sale, and give you the time to get the cash together to buy it.

What is a Binary Option?

When it comes to binary options trading, it works a little differently, as you do not actually purchase the asset, commodity, currency, or stock that you are trading against. Instead, you are trading options against whether the price will increase or decrease. At the point of expiry, the movement of the market will dictate whether your option is in the money and delivers you a return. Binary options offer an “all or nothing” type of trading. If your option is in the money, you receive the full return, if it is not you receive nothing. This simplicity makes binary options great for beginners who are new to options trading or online trading platforms in general.

What is Binary Trading? An Example

Now that you have taken the time to learn what binary options are and why trade binary options, the next stage is to get signed up to your online binary trading platform and start trading. However, to make it easier for you to understand and get to grips with, it helps to know in your mind exactly what a binary trade looks like.Say you are now a trader and you are sitting at your laptop looking at the finance charts. If you were trading in the traditional manner, you would be looking for assets that are likely to increase in value, aiming to buy at the bottom and sell at the top. With binary options, all you need to do is say whether the asset will increase or decrease in value by the end of the trading period. The trading period of a binary option can vary hugely. 60-second trades are available for those who want to trade quickly, one touch trades are available for those looking to trade over a week, while some options last for months. Most investors will trade in short to medium term intervals, up to a few hours, although binary options can last for weeks and even months on occasions.You find an asset that you are sure will increase in value, so you buy a call option. If you thought it was going to decrease, you would buy a put option. The call option has a potential return of 85% per unit if your trade finishes in the money, with a 100% loss if it does not. You purchase an option that expires in one hour, taking 5 options at $100 each.Your binary option finishes in the money, giving you an 85% profit on your initial $500 investment. In total, you will receive $925: your $500 initial investment and your $425 profit.If you use a binary option broker to trade on your behalf, you will see a small amount of your profit taken as the broker’s commission.

What are Binary Options’ Upsides & Downsides?

Before you start committing potentially large sums of money to binary options trading, it pays to know the upsides and downsides, especially if you have looked at spread betting, foreign exchange, or other alternative platforms in addition to binary trading.

Understanding Risk & Reward

The advantage of knowing the precise level of risk and potential rewards makes binary options trading perfect for beginners. When you trade stocks or commodities, for example, you have no idea how far a price may crash or how far it may grow. Critics of binary trading have dismissed it as a method of gambling, but it is actually far less of a gamble than a traditional trade or investment.When you trade binary options, you know how much you are paying to place a call or put trade, how much you will make if the trade expires in the money, and how much you will lose if it does not.

Simplicity

When you trade on the stock market you actually own the asset. With binary trading, you are simply forecasting whether a price will go up or down. As you do not own anything you will never have any problems concerning liquidity, nor will you find yourself with a poorly performing part of a portfolio that is haemorrhaging money but you are unable to sell it.Will the price go up, or will the price go down? That is all there is to binary options trading. Simple.

Certain Trades Offer Low Value Risk

The whole balance between risk and reward revolves around whether the risk you take is justified by the reward on offer. As binary options offer a percentage return on your investment, and finishing out of the money usually means you lose your full purchase sum, the risk outweighs the return. To go back to our example from earlier, we were risking $500 to earn $425. This is equivalent to backing an odds-on favourite at a sports event, but with less surety around what the outcome will be.At the same time, it should be appreciated that 75% – 85% returns still offers great value, while other types of binary option trade, such as one touch trades, offer up to 500% returns, which clearly tips the balance hugely in favour of reward, definitely representing a justifiable risk.

Lack of Regulation

Lack of binary trading regulation is a downside, but only if you decide to trade with unregulated brokers and platforms. Regulations for leading binary trading platforms have been in place since 2008.

Binary Options for Dummies: A Simple Guide

By now you know what binary options are and have read an example of how it works. We have broken down the major aspects of binary trading so that you can not only start trading well-aware of “what is binary option trading,” but also leave with a firm grasp of what the terminology means, in addition to understanding everything about binary options and how you can get yourself started.

The Platform

Many individuals new to this type of trading often ask what are binary options trading systems. The platforms you will use for binary trading do not differ too much from those you might already be familiar with as a result of foreign exchange or commodities trading. Certainly, the financial charts that you are able to access will be similar, and at Bank of Trade, they are designed and optimized to make it as easy as possible for our traders to choose a market or an asset, discover the direction something is trending, and make their trading decisions decisively based on this information.While your binary options trading platform at Bank of Trade gives you everything you need from a knowledge perspective, it also provides a wide range of different ‘instruments’ that you can use for your binary trading.

    1. High/Low Trading

This is the simplest type of binary trade, where you simply pick whether or not you think a price will finish above or below the target price stated when you are presented with the binary option. When given a target price, simply pick ‘high’ if you believe the price will exceed the target, and ‘low’ if you believe it will not. This might be presented as ‘call’ and ‘put.’ You usually set the expiry time yourself, although some platforms will offer specific term binary trades,Remember to look at price performance over the long-term and the short-term, and recognise that you can profit from assets both gaining and falling in price, as well as from assets showing long-term growth, but short-term price decreases, and vice versa.

  1. Touch TradingCommonly known as one-touch trading, these are longer trades that are typically one week in length, although longer-term one-touch trades are available. When taking out a one- touch trade, you are investing against the price of something touching a pre-determined target. All you need is for the asset to hit the target at some point during the trading period, and you are in the money. It does not matter if it touches the target price and then moves back in the opposite direction. To participate in these trades, hit ‘touch’ if you believe the price displayed will be hit during the trading period, or ‘no touch’ if you believe it will not. This is the highest risk trade available, as binary trading over a longer period invariably brings a speculative element into play. However, the returns for one-touch trading can be as high as 500%, making it a worthwhile risk to take, if you have the capital to do so. Before placing a one-touch binary trade, it is best to look at the longer-term performance of an asset, specifically at recent historical highs and lows in comparison to the prices offered, to determine the likelihood of success.
  2. Boundary TradingBoundary, or range trading, will typically offer a lower percentage return, as you are given a range of prices between which the asset may land. Higher profits can be found if you take out a binary option where the price has to stay within the range specified, and not just expire in the range. You simply select ‘in’ or ‘out’ depending on whether you believe the asset in question will expire within the upper and lower price boundaries presented to you.
  3. 60-Second TradesThese binary options are self-explanatory, lasting just one minute, using the high/low (call/put) method of trading. Performing 60-second trades can be lucrative, although the fast decision making needed means it is usually best to become experienced and confident with binary trading before exploring this area.

Get Started with Binary Trading at Bank of Trade

You now have a basic overview of what binary options trading is, the different types of trading that is available, and how you can get started yourself.Use the other resources available here at Bank of Trade to further your knowledge, and don’t forget to sign up for your binary trading account so you can start making money straight away.

What Are Binary Options?

What are binary options? How do you make money with binary options? These two questions are on the minds and lips of would-be binary options traders around the world. The reasoning for this is simple; binary options are a fairly new trading concept. Making money with binary options is often made to seem unrealistically easy by some marketers. While the concept is simple, it takes specialized knowledge for traders to become truly successful at using binary money-making strategies.

Can I Make Money with Binary Options?

Here we hope to provide answers for those asking, “Can I make money with binary options?” When looking for new ways to make money, binary options has become a growing interest globally. Be this as it may, making money binary options style does require specified knowledge. Binary options make money at a faster rate than other trading structures, because binary options allow shorter trading periods.The concept of making money with binary options stems from the original concept of “options” trading. Options were created as a way to allow traders the opportunity to participate in the asset markets without being obligated to Purchase a traditional contract to trade the asset. Options are available for a “premium,” which is usually a fraction of the actual cost of the asset being traded. Options also have an expiration date which determines when the trade closes.

Making Money with Binary Options

Binary options offer an easier method to trade options, by making the concept very simple. With binary options, the decision is straightforward; either you think the asset will go up, or you think the asset will go down. The word “binary” means to contain two parts. With binary options, this represents the two choices available for the trader. The binary options trader only needs to speculate whether the asset will go up or down during a selected period of time, to make money with binary options.Binary options are also called “all-or-nothing” options, because binary money is allocated on an all or nothing basis, based on whether the market follows your speculation or not. Making money with binary options is straightforward, but not without risk.

Binary Options Terminologies

Before we get into making money with binary options, we first need to describe the key terms used in binary options trading. It is important to understand the language spoken by binary options traders before attempting to make money with binary options. The following terms are fundamental to binary options trading:

  • Asset – underlying instrument used to establish a contract; typically a currency pair, stock, commodity, or index.
  • At the Money – a term used to describe a binary trade that closes at the same price as the purchase price
  • Call – trading favorably towards the increase in an assets value at the time of order expiry; trading on the market going up
  • Current Price – the real-time value of an asset.
  • Digital (Binary) Option – an option with a predetermined return based on a contract
  • Early Closure – closing a trade before its expiry
  • In the Money – term used to describe a trade that expires in the position chosen by the trader; a winning trade; binary money is gained
  • Market Price – a quoted price representing the current asset value
  • Out of the Money – a term used to describe a trade that expires in a position that is not chosen by the trader; a losing trade
  • Put – trading favorably towards the decrease of an asset’s value at the time of expiry; trading on the market going down
  • Strike Price – the price at which an asset option is purchased
  • Underlying Asset – general term used to describe a variety of traded financial assets, including: currency pairs, commodities, stocks, and indices.

Types of Binary Options

Aside from the terms associated to binary options, it is important to familiarize yourself with the various types of binary options. This is vital if you intend on making money with binary options. In this section we will describe the different types of binary options. These types include:

  • Up/Down Options – Also referred to as High/Low, Above/Below, and Over/Under, Up/Down option is the most common type of binary option. If investors feel that the asset will rise during the option period, the place a “call” option, and if they feel that the asset will decline, they place a “put” option. The typical expiration times for the Up/Down option are: by the hour, by the day, and in some cases by the minute.
  • Range Options – With range options, the object is to remain within a specified range, without going outside of that range. With “In Range” trades the market price must remain within the predetermined range without touching the two strike prices (above and below) during the option period, to close in the money. With “Out of Range” trades, the investor will close in the money if the asset price breaks out of the predetermined range within the option period. These types of binary options make money best when the asset volatility is low.
  • Touch Options – With “One Touch” options, the price only has to touch the strike price at least once during the course of the option period, and can expire above or below that price and still close in the money. “No Touch” trades, on the other hand, require that the price does not touch the strike price at any time during the trade period, to close in the money. Touch trades are available at certain times of the day, and with some brokers, are even available on the weekends (while international trading is halted until Sunday 5pm EST). While a more challenging to trade, touch options also have higher payouts (between 250% – 400% of the risk premium).

Types of Market Analysis

While there are different types of options trades, there are also different types of analysis used by investors. Making money with binary options is easier when analysis is incorporated. The three types of analysis are: fundamental, sentimental, and technical. In this section, we will give a description of each type of trader:

  • Fundamental Analyst – The fundamental analyst make money with binary options based on news, and major financial announcements. There are certain government/industrial announcements, and reports that seem to have a noticeable effect on the market. The fundamental trader stays abreast on these matters, and uses them as clues to determine the direction the market will take. This news can range from a national retail sales report, to a national unemployment claim report. These announcements are usually responsible for extreme volatility in the markets. The volatility usually resorts in the skyrocketing or plummeting in market price. Positive news means that an uptrend should occur, while bad news means that a downtrend is imminent. The downside to this is that volatile markets can switch direction without notice, resulting in loss.
  • Sentimental Analyst – Sentimental analysts make money with binary options based on the sentiment or “feeling” of the market. The sentimental trader is driven by the psychology of the market. This is typically done by evaluating something called “consumer confidence.” Are investors confident to buy assets viewed as risky, or are they inclined to reduce risk by investing in “safe-haven” assets? This type of evaluation will assist the sentimental trader in making the decision on whether to enter into a put or call option.
  • Technical Analyst – Technical analysts make money with binary options using charts and indicators to determine market conditions, and evaluate the current state of chosen assets. Indicators are markings that are placed on charts based on formulas and equations that are designed to dictate what actions the market will take in the near future. There are dozens of indicators that technical traders may choose from, and all of these indicators serve the purpose of dictating the actions that the market will take next.
  • Combination – It is not necessary to pick one type of analytical style, because the most successful traders remain cognizant of all of these factors. A trader may spend most of the time charting indicators, but still monitor the financial news calendar daily, while still monitoring the market sentiment. In fact, this type of approach will increase the chances of a successful binary options trading experience. Putting them all together makes it easier to make money with binary options.

The Facts about Making Money with Binary Options

The allure behind learning how to make money with binary options is the possibility that you can make extra money, or even replace your job by mastering binary options trading strategies. While the concept of binary options is basic, 90-percent of the traders that participate in binary options rapidly lose their initial investment. The simplicity of only having to decide whether the asset will go up or down during the selected period, is quite misleading indeed.Most of the seemingly informative articles online about binary options are actually promotional in nature, and are not intended to offer a realistic view of the risks involved with binary options trading. Many binary options brokers offer commissions for getting people to register for live trading accounts. The aforementioned articles are sometimes written by people who have no experience with binary options trading, and only wish to earn money for getting new users to register for accounts with brokers they are affiliated with. These affiliate marketers focus on the potential to make a huge profit easily, and never mention the risk involvedWhile the goal to make money with binary options is realistic, it is unrealistic to think that you will be able to easily make money with binary options without any effort, or risk. Successful traders have done their homework, and trade with tact and decisiveness, while the gamblers are sent packing. One of the most important parts about any successful trading strategy is proper research. Good traders thoroughly research the assets they trade. This research is what separates the gamblers from the real traders. Here we will explain how money is made trading binary options.

Return on Investment

The return on investment with binary options differs from broker to broker, but typically ranges from 65%–90%. If you are on the losing end of a trade, you stand to lose between 85%–100% of your investment. This means that if you invest $100, and you win the trade, your profit will be around $65–$90, as a result of the winning trade. However, if you lose the trade, your financial loss will be around $85–$100.As you can see, with binary options the payout is directly reflected by the amount you invest in the trade. Some brokers offer trades as low as $5, and as much as $1,000 or more. As opposed to traditional (also called vanilla) option trading, with binary options your risk is controlled, and predetermined. With traditional options, the losses can be significant, and are undetermined.When looking to make money with binary options, you must have a success rate of 75% to be truly profitable. Maintaining this rate of success can be challenging, and without proper research and guidance, it can be nearly impossible to sustain. The objective here is to give you knowledge needed to get you started on the road to successful binary options trading.

Will I Lose Money?

As the saying goes, “No risk, no reward.” This is true for all forms of trading, and binary options are no exception. As we stated earlier, due to lack of education, research, and patience, 90-percent of new binary options traders quickly lose their investment. This is largely due to the fact that many traders do not respect the dynamics involved in trading binary options. The simple concept of choosing whether a market will travel up or down, lures traders into a false sense of ease. Thinking they can make money with binary options with no real effort, is a typical novice downfall.When they begin to lose trades due to lack or research, novice traders often resort to a gambler’s mentality, and begin to double the value of their trades to regain their losses fast, but instead they lose even more or their capital. Their dreams of trying to make money with binary options fade rapidly, at this point. This type of activity has no place in the successful trader’s repertoire, and is the reason why, this form of option trading that seems too simple, can prove to be risky and detrimental even though the risk is predetermined.If you do not wish to assume any risk whatsoever, then trading of any type may not be suited for you. While it is possible to be successful without losing your initial investment, it is unrealistic to begin trading, thinking that you will not assume any risk. Those who enter into the trading arena with this mentality are usually discouraged quickly once they find themselves on the losing end of consecutive trades. Our objective is to assist you in avoiding this fate; by giving you tangible knowledge that will get you started making money with binary options.

Making Money with Binary Options

Can you make money with binary options? Yes, with the proper knowledge. Now that you have the foundational knowledge about binary options, it is time to introduce you to our trading system used to make money with binary options. Our strategy is based on identifying trends, and trading based on the discovery of those trends.

Spotting Trends

Making money with binary options depends greatly on spotting trends. Trends represent a definitive movement of an asset in a given direction. This direction of the trend tells us what type of trade execution to use. We use candlestick charts to evaluate the market, and spot trends. When dealing with binary options it is best to use a five minute chart. Every bar on a five minute chart represents five minutes. There are three types of trends that can be spotted on a chart:

  • Uptrend – indicates that the market value is consistently increasing; definitive sign to execute a call option (see Image 1)
  • Downtrend – indicates that the market value is consistently declining; definitive sign to execute a put option (see Image 2)
  • Neutral Trend – indicates that the market value is not in an uptrend or downtrend, but rather traveling in a sideways channel; do not trade neutral trends (see Image 4)

Image 1: UptrendImage 2: DowntrendImage 3: Neutral Trend

Step 1: Understand the System

To use this trading system, you will need to study charts representing the assets you wish to trade. When you look at the chart you are attempting to spot trends as shown above. The concept is very simple: if you see an uptrend place a call order; a downtrend, means you will place a put order, and a neutral market means that we will not engage in any trades for that asset.If it is unclear what direction the market is going in, it is best to treat the asset as a neutral trend, and refrain from engaging in any trades with that asset. Looking for strong, definitive trends is the best course of action when dealing with this system.

Step 2: Best Amounts to Invest

When looking to make money with binary options trading, it is best to use the 5% rule. This means that whatever you have in your account, you will spend only 5% of that amount. Follow this rule explicitly, for greater trading success. The following list demonstrates the amounts you would invest depending on your account balance:

  • An account balance of $100, investment per trade will be $5
  • An account balance of $200, investment per trade will be $10
  • An account balance of $500, investment per trade will be $25
  • An account balance of $1,000, investment per trade will be $50
  • An account balance of $2,000, investment per trade will be $100

Step 3: Register to Trade

There is no shortage of binary options brokers to choose from online, but since binary options are not regulated as other financial asset markets, it is important to do your due diligence before deciding what broker to select. All brokers are not the same, and some are surely be ter than others. You may want to choose more than one broker, to compare the trading experience amongst the brokers you feel are the best for you. Remember to always stick to your trading system, and do not get emotionally involved with your trades, and you can make money with binary options. This is the true secret of successful traders.

Summary

Now that we have explained in detail the inner workings of binary options trading, you should have a clear understanding of how to make money with binary option trading. Resist the urge to gamble instead of taking the analytical approach. Use the system outlined to the letter, and you will begin making money with binary options.

Binary Options Demo Accounts

Overview

In the world of trading many fortunes have been made; and unfortunately, many fortunes have also been lost. A binary options demo account gives binary options traders a chance to test their strategies without the risk of live trading. The objective of trading is to profit from your endeavours – rather than be impoverished by them. As with all activities that one seeks to master, it takes research, and practice to achieve trading success.A binary option demo account gives traders an opportunity to evaluate their investment strategies before risking real capital. Bank of Trade is dedicated to educating new and seasoned traders on the finer points of binary options, and demo accounts are the key to building your trading strategies and your confidence as a trader.Online trading was first introduced in the mid- to late- 90’s, with the advent of affordable online connections, and high-speed computers. Online trading involves placing buy/sell orders in a commodity or financial asset market, via online brokerage websites. Binary option trading is a fairly new form of online option trading that has become popular amongst new and seasoned traders alike.

What are Demo Accounts?

Also referred to as a binary options practice account, a binary options trading demo account is recommended for all new traders. Contrary to what many believe, it is possible to establish a free options demo account, and you do not have to pay to practice with a free binary options trading demo account.While there are some binary options brokers that only allow demo trading for account holders that have deposited funds into a live accounts, this is not the case will all brokers. To best understand what a binary trading demo account is, we must first explain the live account and its features.Live TradingLive trading involves the investment of actual capital into a particular financial asset using an online brokerage website. Binary option trading with live accounts does involve risk; but unlike other forms of trading, the risk is predetermined, and can be minimized by investing smaller amounts. The profits and losses with live trading accounts are real, unlike the losses and profits seen with binary option demo accounts.Demo TradingAlso called “paper trading,” demo trading involves zero financial risk for the trader. Opening a free binary options demo account is a way for traders to experiment with trading strategies and devise a trading system to use during live trading sessions. The demo trader researches assets and executes trades just as he would during in a live trading scenario.

Binary Options Demo Trading vs. Live Trading

Some people feel that demo trading is not an effective way to begin trading, because they feel it does not paint a fully realistic picture of what goes on when you are trading with a live account—and your real money is at stake. However, starting out as a novice and investing your capital, without knowing if your strategy is effective, is not the wisest decision for a new binary options trader.A practice binary options trading account gives investors a much needed platform to gain experience and get a feel for trading binary options. Although the execution of binary options is based merely on determining whether an asset will go up or down, the risk involved is just as real as with any other form of trading. This risk factor is what makes binary option demo trading a good idea.Just as with playing a sport or musical instrument, practice is essential when starting out as a new trader. When attempting to achieve great feats and accomplish goals, the confidence to succeed comes about by practicing. It is common to spend weeks and months looking to master a skill enough to compete for a main event. The countless hours spent are all for the purpose of good execution for what seems like only moments. Just as the musician and athlete need ample practice to perform at their optimum level, the new trader needs practice to develop the skills needed to succeed. A binary options trading practice account offers this platform to test your trading strategies.Trading PsychologyThe major difference between binary options demo accounts and live accounts lies in the psychology of the trader with nothing at risk, versus that of the trader risking capital. This psychological rift is the reason why some falsely advise new traders to not start with options practice accounts. Even though the feeling of trading with demo accounts is not identical to the feeling of live trading, it is best to start without the risk to gain familiarity with the process. With that being said, keep in mind that being successful with demo trading does not guarantee you will be successful with live trading.—it does increase your likelihood of success.A trader may have traded successfully on a demo account, and feel confident enough to begin live trading. He proceeds to make his deposit into a live trading account to initiate live trading. Once the deposit is made, a change in confidence often takes place. The fear factor is the psychological aspect of live trading that does not exist with demo trading. When there is no real money at stake, the fear of losing your investment is not present. The feeling of fear associated with losing real capital cannot be simulated using binary options demo accounts, but remain mindful of the impending, live trading fear factor while you are in the demo trading phase.Fear can often cause hesitation, and lack of confidence in the trading system or strategies that were practiced. This fear-based trading usually results in early losses when switching from binary option trading demo accounts to live accounts.The other factor, that is not present in demo trading, but is experienced by live traders is greed. Greed arises when a trader begins to win or lose successive live trades. A trader suffering losses may decide to chase losses by doubling the investment amount—resulting in an even greater loss of capital. Accumulation of successful trades may also embolden a new trader to deviate from the original plan and increase the amount of the investment—also resulting in greater loss. Greed clouds the judgment, and is the enemy of live traders. While greed cannot be simulated with a practice options trading account, remain mindful of the greed factor when trading with your demo account.

How do Demo Accounts Work?

Binary options demo accounts allow traders to gain experience in a risk-free environment. The mechanics of a demo account are typically identical to that of the live account. The platforms used in both types of trading usually look the same, and the functionsavigation features are usually the same.Once the account is created, the trader is able to monitor the assets offered by the broker, and decide what assets look favorable for trading. When the trader has decided on the asset to trade, the order can usually be placed with the click of a button. Once the order is placed, the platform will allow you to monitor your trade. After the trade period has expired, the trader is notified whether the trade was a profitable one, or a loss. A record is normally kept within the trading platform to show the details of each trade executed with the practice binary options trading account.

How to Get a Binary Options Demo Account

The process of registering for a free binary option demo account is fairly straight forward. The specifics of registration will differ from broker to broker, but the basics are pretty much consistent amongst all binary options brokers. Here we will give you an overview of what is usually needed when opening a binary option trading demo account.Very little information is needed when opening a demo account with a binary options broker. In some cases the registration will take just one minute for a new client to register. Registration is done using a registration form on the website of the chosen broker. The form contains fields for all of the information required to open a demo account. This information requested is usually your:

  • First Name
  • Last Name
  • Country
  • E-Mail
  • Phone Number

After the form is submitted, you will need to confirm the registration by responding to the verification email sent to the email address you provided when registering. Once you have confirmed the registration via your email confirmation, your registration is complete.

Where Can I Get a Binary Options Demo Account?

Although Bank of Trade is not partial to any particular binary options broker, as an authority on binary options, we feel it is an obligation to provide detailed information for our readers. It is in the spirit of this commitment that we are providing the following list of binary options brokers that will give you a binary options demo account free:The above list is accurate at the time of this writing, and is subject to change at any time. Please view the FAQ section of the selected broker to see the updated details for that particular company.

Test Your Strategies before You Trade

For the novice trader, and the seasoned trader alike, the concept of testing strategies is vital when looking to experiment with zero risk. Before you practice binary options trading, it is important to thoroughly research the various trading analysis types (Fundamental, Technical, and Sentimental), and decide what skills you need from each form of analysis to build a strong system.It is helpful to learn how to read candlestick charts, and how to use some basic chart indicators to assist you with trend spotting, and determining the best times to buy/sell. You may also want to review financial calendars before executing trades to see if there are any potential political or industrial announcements scheduled that will adversely affect your trades. Continue to experiment with different approaches, making sure to keep track of strategies used, and the results of those strategies. When you are able to see measured success with a particular strategy for weeks/months, you can assume that the technique is sound enough for live execution.

Making the Transition from Demo to Live Trading

The transition from using a free binary option demo account to using a live account can be very difficult for some traders. It is important to know when enough demo trading is enough. You do not want to jump into live trading before you are ready, and you do not want to use demo trading like a crutch—not wanting to let go. You must begin by entering into demo trading with the end result in mind.When opening the demo account do not use an excessive amount of money. If you are not going to use $25,000 to start with, a $25,000 demo account will not offer you a realistic demo trading experience. A demo account starting with about $1,000 to start out with will offer a much more realistic experience for the novice trader. If you have an account with an unrealistic balance, it will give you the feeling of having an unlimited supply of capital, and this feeling is not helpful when preparing to transition to live trading. You need to attempt to make the demo experience as close to the live trading experience as possible.Make sure every trade done using a free binary options demo account is executed just as you would if you were trading with real capital. Do not enter into any trades without serious consideration about the odds of success as opposed to failure of the trade. Try to imagine what it would feel like if you were actually investing your own capital into the trade. This will help condition your psyche for the transition from demo trading to live trading.As we mentioned earlier, the emotional aspect of trading live is not possible to duplicate with demo trading, and even imagining that you are investing real capital is no comparison to actually gaining/losing real money. The fear and greed-induced excitement are simply not present with demo trading.Show No EmotionWhen using a free binary options demo account, negative emotions like fear and greed are non-existent. Telling a trader to show no emotion when actual money is at stake is easier said than done. However, if a trader is strict, and focuses on the system without wavering, the emotional factor will not matter. If you have thoroughly tested your system, you have no reason to fear, and if you follow the rules of smart investing (only invest 5% of your account balance per trade); you will find that you are able to make a smooth transition from demo trading to live trading.Knowing when to go LiveThere is no set time that a trader is supposed to trade using a demo account. Knowing when to transition from a binary trading demo to a live account is solely dependent on the trader. Some traders are aggressive, some are conservative, and others fit in the middle. It is safe to say, no matter what the style of trader you happen to be, that is you are able to trade with consistent success for no less than two and no more than four months, then you are ready to transition to live trading.When you begin live trading, the best approach is to trade using the absolute minimum amount possible (even if it is less than 5% of your account balance), to lessen the emotional factor involved with the switch to live trading. After you become comfortable with the switch to live trading, and learn to become emotionally detached from the trading process, you can begin trading using 5% of your account balance for every trade, and refusing to alter the investment amount or the strategy practiced during demo trading.

Summary

Just as soldiers undergo extended periods of combat training before being released into real-life combat scenarios, a trader should spend ample time preparing before engaging in live trading. This is done because the preparation time is detrimental to the process of success. While trading is not a life-or-death situation – like military combat, the importance of training before trading cannot be stressed enough. Make sure that you are comfortable with your trading strategy before you proceed to live trading.