Know what it is, do your research and sign up
First you need to know what are binary options? After you know what they are then you need to know how they work, if they are for you or not and how you start trading in binary options.
So lets step you through our mini guide of binary options trading for beginners and see how you can get started today.
A beginners guide to binary options
Binary options are a form of financial betting. You can make a bet or trade on whether the price of an asset of your choosing will go up or down over a fixed period of time. However unlike some other forms of betting online you know the risks before you press the trade button.
An example would be: You bet 10 that the price of oil will rise over a period of 1 day. So you place a Call on the binary option oil. Once you have chosen your bet value, asset and direction you will then be given the percentage you stand to make. If your prediction is correct and you land ‘In the Money’ you stand to receive 89% of your bet plus your bet back. Giving you in this case a profit of 8.90.
However if you don’t predict the direction of the binary option correctly and you land ‘Out of the Money’ then you lose your initial bet of 10. This is fixed odds betting in action, except not on sports like is typically associated with this kind of betting but on binary options. Be aware that some brokers do give you a percentage of your bet back typically between 5-15% if you do land ‘Out of the Money’ so you don’t lose everything. This will be indicated before you make your bets.
It’s pretty simple right? Well in it’s simplest form it is, however there are various ways you can reduce your risk when trading binary options online. There are various strategies, tips and indicators to help you make the most profit from each trade you do. We go through more on these in other sections of the site so be sure to check them out.
How to start trading with a binary options broker
Again it’s pretty simple for a beginner or advanced trader to get started in this area of trading online. Below we have outlined the process of what to do when here on this site and then when you have found a regulated and respected broker to start trading with.
What to do first
- Make sure you know that binary options trading is for you. Educate yourself in how they work, basic strategies and get familiar with the trading terms and financial markets.
- Once you have the knowledge it’s time to find the right binary options broker for you. Take a look at our detailed reviews and find a regulated broker that will look after your needs.
- Next up is to click through and take a look at the binary brokers site yourself, take a look around and make a double check for yourself that it still fits your needs.
When your ready to open an binary options account
- Take the easy step to sign up with a broker. This should be free, if you have to pay to sign up then find another broker.
- Once you are in you will have access to more educational material and their platform. If they offer a demo or practice account then take full advantage of it and make a few trades to get to know how it all works further.
Ready to deposit?
- Making an initial deposit should be straight forward and if you are having any problems then ask customer support to help you,they are usually quite efficient and live chat is available on many brokers sites. Be aware that minimum deposits range from $100 USD upwards.
- One you have deposited it’s time to start trading.
- Choose the financial asset in which you want to trade.
- Choose your prediction/direction – either higher (call) or lower (put) than the current price value.
- Choose the amount you want to trade.
- Confirm your choices.
- Wait for them to expire and see if your prediction was correct.
Once you have made the effort to get to know more about this subject then the steps to your first and subsequent trades are pretty straight forward. Just remember that each brokers trading system might differ and that testing multiple ones is a good way to learn.
We recommend you give StockPair a go for hassle free trading experience.