The popularization of binary options as an effective trading instrument in our segment of the financial market has led to increased activity of beginners trading online. However, the vast majority are ordinary investors with a lack of experience and knowledge in this process, who do not always fully understand the basic principles of the market with the help of binary contracts. So that novices receive stable and high performance indicators on the market, we offer a minimum list of recommendations, the objective of which is to clarify the question – how to trade on binary options?
Let’s start with the general concept of the trading instrument. A binary option is a version of an exchange contract in which, as a condition for profiting, we use the principle of betting on the dynamics of market movement. UP or DOWN? This is the main question to be answered by the trader for an effective contract.
After making the correct prediction for the bet and registering the contract, the trader gets a profit of 65 to 90%, while the wrong bet of another market participant loses 100% of the value of the trading position.
There are several critical parameters for the efficiency of a binary option on the market, and they have a major impact on the trader’s final trading result:
- The broker and its technical and trading conditions for working with the client
- The efficiency factor of the trading strategy that the market participant employs
The company with which the trader needs to cooperate for the implementation of trading processes on the binary market has the ability to influence the market participant’s trading result through unlawful acts. Yes, this situation is not uncommon in binary trading. Many scam companies aim to simply take possession of your investments. Therefore, it is necessary to choose the right secure, professional broker for working on the binary options market. It is quite simple to find such a company, as they will always comply with the following trading and technical parameters:
- The broker’s mandatory license from a financial market regulator
- A high level of professionalism of the trading platform – to determine this, you should pay attention to the terminal’s technical tools and the number of functional settings of the platform – the more features there are, the better the terminal is
- The availability of training services
- The minimum operating conditions on the market
- High-speed withdrawals of trader profit
A simple example is the high-performance, security-proven Binomo broker, who offers its clients a range of services and trading conditions:
- An FMRRC license
- A trading platform for professional binary trading with a set of indicators and chart analysis tools, as well as a wide choice of settings for the trading chart
- A highly professional system of trading process training
- Effective analytics
- Operating parameters on the market – a trading account from 10 USD, the cost of the minimum contract starts at USD 1
- Trader-earned profits can be withdrawn within 24 hours
In addition to the lack of preconditions for fraudulent transactions on the platform of this broker, the trader, in cooperation with Binomo, receives the optimal conditions for the professional trading of binary options with consistently high rates. Note that this company’s minimum operating conditions on the market allow you to start trading with a minimum level of investments and carry out operations on the market in accordance with all the rules of money management.
How to trade on binary options – the choice of an effective strategy
The stability of the trader’s result on the binary market depends on the efficiency factor of the strategy signals that are used to generate signals for market participants. A simple mathematical calculation based on the profits and losses of binary trading processes shows that stable capital gains can be made when achieving 65% successful trading positions. Taking this into account, traders need trading systems in which at least 65% of trading signals return profits on their contracts. Their is a broad choice of trading strategies, but the main ones can be divided into the following formats:
- News trading
- Indicator strategies
- Technical analysis
The efficiency factor of this list of strategies on average ranges from 75 to 90% lucrative contracts. Such trading strategy performance parameters allow the trader to stably obtain lucrative positions and increase their trading account funds with high dynamics.
Here is a simple example of a technical analysis strategy with a signal efficiency factor of 85% and capital gains dynamics of 250% per week. Here, the approach to trading, which uses an asset price movement channel, is limited by support and resistance levels (these are levels of the value of the asset, from which the market has made several reversals). When opening short-term options positions with expiry ranges of up to 240 seconds in the direction of the rebound from the channel boundaries, the trader can register up to 20 lucrative contracts in an hour:
A wider choice of trading systems with high levels of efficiency can be found on the Binomo broker’s website, where you’ll see a set of proven strategies with detailed descriptions on how they work:
How to trade binary options – this is a simple question for traders who have goals and ambition. The main thing is not to stop at your first failure and always work on your professional development.