What Is A Binary Option & How To Trade Them
binary options (Photo credit: opportplanet)
Binary option trading is becoming more and more popular these days. If you have been a stock investor or forex trader for many years, maybe it is time to start looking into the possibility that binary option can offer you.
What is a Binary Option?
Binary option is the act of speculating on the commodity market. When you buy a binary option, you are buying the right to buy or sell a commodity at a predetermined price within a predetermined time frame in the future. If the market ends up going in your direction, you will win, otherwise, you lose. Because of its nature, binary options are considered high risk investments. You will stand a chance of winning a large sum of money, or you will risk losing it all.
Different Types of Binary Options
There are many ways to participate in binary option trading. You can buy High-Low binary options, Range binary options, or Touch-No Touch binary options. With High-Low binary options, you need to determine whether the commodity will expire above or below the purchase price, within a range that is considered valid for you to win the trade. If you are right in your choice, you will receive a pre-determined return on your investment. With Touch-No Touch binary options, you will determine whether the commodity will touch a specific price level at any point before its expiration. If it reaches a price point , you will earn a substantial pre-determined amount of money, or lose your investment, depending whether you choose touch or no-touch when you buy the binary option.
How to Trade Binary Options
If you want to win at binary options trading, you need to know certain techniques. Since binary option trading has a high risk level attached to it, you should not assume that you will win big money even though you have been a successful stock investor for years.
Firstly, you need to have a calm attitude all the time. Since binary option carries a high level of risk, many traders get worried and act out of fear when the market suddenly makes a small move against them. That is when they lose the trade. To master binary option trading, first you have to train your mind to remain calm all the time.
Secondly, do not invest your main income or hard-earned money in binary option. You should only use the money that you can afford to lose. When you trade with your hard-earned money, you will not be able to remain calm when the market is against you and may make foolish mistakes.
Practice First Before Trading For Real
Most binary option brokers offer you a chance to practice trading before putting your real money into the game. You should open a practice account and trade till you are totally confident that you can make a success with your real money. Do not start trading until you can make profits with your practice money.
Author Bio:
Ashley, is a professional blogger and writes in focus with finance and investments. 24 option bonus gives you a detailed information on binary options. It can be a good guide for beginners.
Category: Investing
