Appeared in 2008, binary options allow you to bet on the rise or fall in the price of the underlying asset. But beware the risks can be high. Here are our tips for trading with binary options.
Comparative Broker Binary Option
Before you start trading in binary options, you must ensure that the prospective broker is on the list of financial institutions authorized to practice and not on the blacklist of binary options brokers.
In addition, we recommend that you test the transaction process with a moderate fee, as well as the quality of its customer service before trusting a broker.
Master The Binary Option Trading
The binary option, also called a digital option or an all-or-nothing option, is a contract based on the performance of an asset quoted over a given period. The bet boils down to the choice between the rise and the fall of the price of the underlying: action, index, currency, raw material. The term of a binary option varies from a few minutes to several weeks. Unlike a traditional option, you must keep your position until maturity and know in advance the potential gain. Know the best from https://fraudbroker.com/5-minutes-strategy-binary-options/ now.
In case of a winning bet, you receive a payout called pay-out. In the event of a losing bet, you lose your entire bet. The binary options should be handled with care.
There are several types of binary options, from the most classic to the most sophisticated:
Up or down
The most common formula, it allows, as its name suggests, to bet on the rise or fall of the price of the underlying.
Touch: no touch (one touch)
The bet wins as soon as the price of the underlying reaches the predefined price target, during a period also determined.
For this formula, you must define all the parameters of the transaction yourself: underlying asset, maturity, wagering amount and even risk level, based on the definition of your maximum return in case of gain and your backup in case of loss. Indeed, you can for example set a gain of 55% and a backup of 30% to limit your risk taking.
This type of transaction leaves you 60 to see your scenario come true. This type of binary option is for experienced traders.
Our Advice To Overcome The Potentially High Risks Of Binary Options
Any trading activity presents risks. This is why building solid knowledge bases on the operation of binary options, risk management and the chosen trading platform must be a prerequisite for trading as such.
Get informed and train
Whatever you bet, you need to have solid knowledge of the binary options and underlyings you speculate on through them. You can visit binary options brokerage sites, which often offer extensive documentation and participate in webinars to familiarize you with this practice. You also need to have strong fundamental and technical analysis skills to be able to evaluate changes in the underlying stocks, indices, or commodities that you want to process through the binary options.