Trading binary options seems simple at first glance: There are exactly two variants, either a forecast is true or not. Especially beginners are often tempted by the clarity of the possible actions to the conclusion to have to deal with a game in which you win sometimes, lose sometimes. The appeal, to make a profit in a short time, is high here. As an investor, you have apparently only choose between «up» or «down» and wait to see if the price of the underlying runs in the predicted direction. But whoever binary options would act successfully, should quickly say goodbye to this roulette variant of trade.
1.) What are Binary Options?
Binary options are categorized as financial derivatives. When trading binary options may exactly two scenarios occur: either a prediction occurs — or not. The basis for the trading of binary options, the purchase of an abstract right to a basic value. The permitted underlying stocks, indices, currency pairs and commodities can be selected. Binary options are one of the transactions. With the acquisition of a binary option chooses the investor if the price of the Underlying from time of purchase to increase the expiry time or will fall. There are many variations of Binärhandels. This twist on the classic call and put trading is the easiest. If the dealer right in his prediction, he registers a profit. Even when prices are falling so profits can be earned — because it is about a true prediction. This presentation provides maturities of less than a minute to several weeks. There is a critical risk when trading binary options. If the trader has omitted loss protection, may suffer a total loss of the capital. Well, it depends on the bet to — at minimum lot sizes between a Euro and 25 Euro, the loss at a small sum but certainly to get over. Especially for beginners, it is therefore advisable to spread the risk in various trades and use only small sums.
Conclusion: In general: Binary options are one of the transactions. With the acquisition of a binary option chooses the investor if the price of the Underlying from time of purchase to increase the expiry time or will fall. So it is less about luck and chance that there is a profit, but a good market analysis and accurate forecast play a decisive role.
2.) Solid education as a basis: The Nuts and Bolts
Success in Binärhandel will not be received by luck and chance. Act Binary options properly is to familiarize yourself with the markets familiar. At the beginning, it makes sense to focus on only two or three underlyings and to pursue their development. It is useful to an underlying asset at first observe for a while in order to make a good prognosis can. Traders should not be tempted to rush into to offer. It is better to suspend a trade to make as a non-informed decision. Those who want to continue their education, has contributes most Broker good opportunities: A Binary options demo account is in addition to the theoretical foundations of an excellent opportunity to test the different strategies.
Conclusion: As mainly have a good market analysis and in-depth market knowledge critical for an accurate prediction, it is advisable to have a solid education as a basis for the Binärhandel.Good brokers offer to practice demo accounts, information on strategies and price scenarios and have webinars and seminars offer, which prepare the best traders.
3.) Manage risks properly: avoid total loss
The risk should not be underestimated when Binärhandel. A sensible risk management is an important condition to limit losses. As a beginner in real trading you should initially focus only on an underlying asset, to test the mechanisms and understand and small sums are running. As soon as one ventures into complicated markets, risk diversification should be sought. It is not always advisable to act in the best-known market or the best underlying. What matters is the best risk-reward ratio. If one observes carefully the markets, the knowledge should pay in the long term. An important principle is that it should be invested maximum 2 to 5 percent of commercial capital in a trade. Especially beginners restraint is often difficult. With a minimum deposit of 200, — Euro and a minimum bet of 50, — Euro a promising high-yield Trade the temptation is very great. However, the yield still pricing in the risk — 500 percent potential return in high-yield mode thus also pose an extremely high loss potential. Who starts with the trading, should keep the profits on the trading account. This facility will be off the market out created to invest larger sums without further own resources. It is ideal when fund future speculation exclusively from the profits of previous deals. In no case the capital should be otherwise scheduled — a rule that applies to any market activity. Thus, the financial independence of action is with Binary optimally ensured options. Only when a sufficient cushion is also provided for its entry into the high-yield trading, the profits to be skimmed off.
Conclusion: Binary options offer very high return opportunities, but the exchange rates do not always run in the desired direction. It applies to this situation, take appropriate precautions with respect to the trading account and to keep adequate reserves. When trading binary options should be noted that there is a certain risk that should not be underestimated. There should be a clever trade strategy should be developed, traders should definitely educate and inform well.As a rule: not to invest a lot in little trades, but spread the risk makes sense — so the total loss is avoided.
4. Three Tips for trading binary options
- Tip 1: Learn how to be properly analyzed and how to understand market trends the market! Most brokers have a good continuing education and demo account , which should be used.
- Tip 2: Develop a wise trading strategy! A rule could be, for example, that you only invest in an option after you have watched them for a certain time.
- Tip 3: invest Not too much and spread the risk! Set a maximum amount you want to invest in a trading session.You should prevent losing all your capital with few trades. Distribute the risk low stake on many trades.