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Binary Options Explained
Binary Options Explained
There used to be a time when trading and profiting the financial markets was the preserve of professional traders and large financial institutions. However, since 2007 when the SEC (Securities and Exchanges Commission) made Binary Options trading a recognized part of any investment portfolio, trading the financial markets was open to anyone with a computer and an internet connection.
Put simply, binary options trading is investing in the direction of an asset. You choose whether an asset will either go up or down by a certain fixed time and if you are correct, (‘in-the-money’) you receive a fixed payout of up to 90% profit. That’s a 90% return every single winning trade.
You can trade a wide range of assets in binary options – all the major stocks, currency pairings, commodities and indices and the expiry times of the options range from 30 seconds to 1 month.
Making a trade could not be any easier.
- Simply choose an asset
- Choose the direction
- Choose the expiry time
- Choose the amount to invest.
It really is that simple! Anyone with little or no experience of the financial markets can make those easy yes or no type investment decisions. This simplicity, coupled with the high profitability (up to 90% profit in as little as 30 seconds) has meant that Binary Options trading has become the fastest growing online activity with people from all walks of life being able to generate large profits with minimal effort and minimal investment.
Forex vs Binary
Binary Options trading is very different to traditional forex trading. The biggest difference is the limited risk in Binary Options. From the very outset of making a trade in binary options you know exactly:
- How much you stand to earn (fixed returns)
- When the investment ends (fixed expiry times)
- That you will never lose more than you invest (forex has unlimited liability)
Tips for Beginners
Although Binary Options is the simplest form of investing, and the Dow Jones Focus Group Software makes it even simpler, there are a few tips, which when adhered to, can make a big difference to the profit margin.
Here are my top 3 tips to binary options trading success:
- Research – There are hundreds of assets to choose from, but you should only focus on a few assets to trade. Researching and focusing on just a few assets means you can learn how a particular asset reacts to certain data releases, which will make it easier to predict its future movements.
- Discipline – Whenever there is money involved, it is essential that you maintain a high level of discipline. Don’t go chasing results after a loss and don’t get greedy after a few wins. Keep your strategy and money management under control
- Knowledge – a little bit of extra reading goes a long way. If you want to make real money trading, then it is important that you have a basic grasp of what is going in the markets and in world affairs. E.g. Chile is the largest producer of Copper. An earthquake in Chile will mean supplies get disrupted and prices of Copper go up.