Binary options – this is the most popular for today OTC trading. One can learn how to trade these financial instruments very quickly, which is an undoubted advantage for novice traders. However, making a profit over a long distance depends on a number of factors that should be considered by everyone who decided to take this path.

What are binary options and how to work with them?

For a start, let’s see what binary options are. This is a unique financial instrument, investing in which, you, in the end, can only count on two outcomes – profit or loss of invested funds (in rare cases, their return with a coefficient of 1). Transactions are concluded in two directions – the rise or fall of the selected asset relative to the entry after a predetermined period of time – from one minute to several days and even months.

The profit margin for instruments is also not constant. It depends on the volume of transactions at the moment – as a rule, the more traders selling the selected asset, the higher the profit. On popular trading floors, it reaches 90-95%, but an indicator of 70-75% is considered quite attractive for trading.

To understand how this works, we give an example. Take the most popular EUR / USD currency pair. Suppose that at the moment its rate is 1.1450, that is, 1 euro costs 1 dollar and 14.5 cents, and the profit on the contract on a conditional trading platform is 79%. We are making a forecast that in 20 minutes the euro / dollar rate will grow, and we open a deal upwards, investing 1000 rubles in it. After 20 minutes, the transaction is closed, and if the rate has grown – we get 1,790 rubles to the balance. If we make a mistake and the rate fell below 1.1450, we lose money.

It is important to know that trading in financial contracts is carried out outside the exchange segment. The movements of asset charts are only a working tool for making deals. But there is nothing bad in it – otherwise ordinary users could not enter the market, because for stock option trading it is necessary to have an appropriate status and a deposit of tens of thousands of dollars.

Thanks to trading platforms, it is enough to have only $ 10 to start trading. However, even a small amount should not risk if you can not analyze charts and predict the movement of courses. How much time is needed to learn how to trade options?

How long will it take for a beginner to master binary options trading?

On the Internet, there is a huge amount of stories from people who supposedly learned how to trade binary options in a couple of days and now earn big money on it. You should not believe everything that is written in the articles and shown in the video, because if everything was so simple, then everyone who barely mastered this area would have become a millionaire in a matter of months. Therefore, before you start learning to trade, it should be understood that there is no easy money here.

Financial markets are a whole universe that lives by its own laws. Even experienced traders who consistently make money on trading in short-term contracts continue to improve their skills day by day and discover something new. In order to learn how to enter into transactions, it does not take much time. But to understand and feel the market, and successfully predict the movement of assets, you should spend months. Although there are exceptions.

Mathematics of success in trading short-term contracts is simple – if we take into account the average profit from a single transaction of 70%, then you need to have at least 60 percent of positive outcomes. Therefore, the main goal of a novice trader is to achieve this result.

But even having learned to trade and make a profit, you risk not seeing your earnings. The fact is that among brokers there are not entirely bona fide ones who do not pay money to their clients or deliberately lead them to drain the deposit. In order not to be disappointed, you should choose from reliable and proven trading platforms.

Binarium offers a modern, functional terminal with a variety of financial assets and analytical tools. The trading platform has been operating since 2012 and is focused on the Russian-speaking audience. The minimum deposit here is only $ 10, and the withdrawal of money earned is available from $ 5 and takes place on the day of application.

Binarium regularly holds promotions for its customers, for example, a first deposit bonus of 100% of the deposit amount. In addition, tournaments for traders with substantial cash prizes are being organized as part of the trading platform — you can even participate without an entry fee.

Basics of trading short-term financial contracts

Many binary options brokers offer free trading basics training. But usually such training is limited to instructions “where to click and open a deal” and “how to deposit money on deposit”. For a deeper understanding of the mechanisms of profitable trading, you should study articles on stock trading from professional financial analysts and apply the knowledge gained in practice.

Over time, you will learn to understand why the schedule behaved one way or another. The movement of prices is influenced by fundamental and technical factors. The fundamental are news of the world economy and politics. For example, the US Federal Reserve meeting at the key rate, the UK exit from the European Union, etc. – all this somehow affects the main currency pairs.

Technical factors are directly the schedule itself, or rather its history. Typically, the behavior of the schedule is repeated – so, after a long growth should fall and vice versa. A more advanced analysis tool is indicators. They help to structure the data and quickly find the necessary points on the chart, such as support and resistance levels, trends, volumes, etc.

Everything that happens in the financial market is the eternal confrontation between sellers and buyers. For their designation in trading, even their own terms were invented – “bulls”, which buy an asset, and “bears”, which sell. If the selected asset has more buyers, its price rises, and if there are sellers, then, accordingly, it falls. The results of this confrontation we see in the graphs.

It is the graph of the course of the selected asset that is the main tool of the trader. The display of price changes can be of different types: line, bars, zones, but Japanese candles are most popular with traders.

Studying candles, it is easier for us to be guided in how the price behaved in the chosen time interval. The time of candles is called the timeframe and starts from one minute. The green candle is bullish and suggests that the price has gone up. The red candle is bearish, it means a drop in price.

The lower part of the bull candle is the opening level, the upper part is the close. A bear candle is the opposite, because it shows us that the price has fallen, which means that the upper part is the mark when opened and the lower part when closed.

Candles also have shadows – thin lines from the close and open levels. They show what the upper and lower values ​​reached the price within the corresponding time interval for the candle. On all modern trading platforms, you can choose to display the chart in the form of candlesticks.

What time is better to trade?

Financial exchanges operate five days a week – at this time around the clock trading of various financial assets is available on trading platforms. Trading week begins on the night from Sunday to Monday and ends on the night from Friday to Saturday.

At different hours, charts can be volatile, calm, have a trend movement, or move in a sideways range. The greatest volatility is observed at the time of intersection of trading sessions of exchanges of various countries. It is at this time that trends are formed, reversals and rebounds occur. Many traders prefer to trade during these hours.

But there are those who prefer to work with market calm, when currency pairs move mostly horizontally. It all depends on the style of trading and the chosen trading strategy.

For example, the time popular with traders is one hour from 11 am to 12 pm Moscow time. In this interval, the trade sessions of Tokyo and London overlap. In Japan, the working day of the exchanges is over, and in the UK, on ​​the contrary, it is just beginning.

At 16 o’clock in Moscow, the New York Stock Exchange begins its work, and the London Exchange ends trading at 19. In these three hours, significant trading volumes are also observed and allow experienced traders to receive the necessary signals for making deals.

Immediately after the start of the New York Stock Exchange, at about 16:30, the publication of economic data begins, which affect the currency pair quotes with the dollar. At this point, traders are holding their finger on the pulse, and are ready to enter the market at the right moment. For example, if data on employment in the United States show growth, the dollar strengthens in pairs with other currencies. When the index falls, the dollar weakens.

It is best to predict price changes at the height of the week – starting on Tuesday and ending on Thursday. On Monday, price gaps (gaps) and unpredictable movements of the chart occur, which, however, is not a problem for certain traders, but on the contrary, forms the basis of trading strategies. On Friday, the exchanges end the week, players take profits, and currency rates can also behave unpredictably.

Trade Expiration and Trading Strategies

An integral attribute of binary options is the expiration of the transaction. This is the duration of the contract, on the basis of which the transaction is closed and the trader receives the calculation. As we have said, there may be two outcomes, with rare exceptions, when the price hit the same mark on which the option was purchased.

According to statistics, most transactions open with expiration from one minute to half an hour. Depending on which expiration is specified, the timeframe of the candle is also selected. If the timeframe is 15 minutes, the candle will show the price change during this time.

Minute transactions are little predictable. Earnings on such contracts are more associated with luck than with skill. Many traders prefer to trade on minute options, using various mathematical strategies, including a rate increase in case of failure until the deal closes in plus. This strategy is called Martingale, it came from a casino. This is an extremely dangerous trading system, since the number of attempts for “wagering” is limited and there is a risk of a complete loss of the deposit.

Another thing – expiration from 10 to 30 minutes, when the schedule has a clearly directed movement. For such expiration, as a rule, a timeframe of five minutes is chosen. Trades either conclude deals in the direction of a trend, or catch “rebounds” when the price suddenly falls down during an uptrend, or it takes off when the trend is downward.

At the same time analyzing the chart, it is best to use different timeframes, viewing, fifteen-minute, hourly and even four-hour candles. This will help get a general idea of ​​the price movement of the selected asset and make the right decision.

As for trading strategies, there are a lot of them. For beginners, we advise you to use basic systems that require a minimum of supporting tools for analysis. These include various candlestick patterns, such as the Pinocchio model.

Its essence lies in the search for a specific candle, which will resemble the head of Pinocchio – a small body of a candle and a long shadow in one direction. If the uptrend is moving on the five-minute chart and the bullish candle with a long upper shadow is closed, then a price reversal occurs and you should open a short trade with expiration of 30 minutes. With a falling trend, you need to do everything exactly the opposite. Wait until the bear candle with the lower long shadow closes and close a deal.

Studying the basic principles of trading, and using different strategies, be sure to practice on a demo account. It offers almost every trading platform. With the help of a demo account you will be able to consolidate your trading skills, as well as test the capabilities of the chosen trading platform. If at a distance you get to have a stable plus, it’s time to switch to real trading and make a deposit. Good luck!

TRADE OPTIONS

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

How long does it take to learn to trade binary options?
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