Thanks to modern technology and access to the internet, many opportunities have opened up for anyone who desires to earn money online from nearly any place on the globe. One of these is speculating on the market with binary options, which are futures contracts that enable you to earn a heavy profit through an incredibly simple algorithm. This article will fill you in on everything you’d ever wanted to know about speculating on the binary options market.

What Are Binary Options

We’ll find out, for starters, what this financial tool is, where it came from and the secret to its popularity. So, binary options have existed as a tool in the financial sphere since 2008. A decade has already come and gone since the moment when the first trader opened a trading terminal and placed a winning trade. They were “born” on the Chicago Financial Exchange (CFE) that, in the midst of the international financial crisis, created a simplified version of “vanilla” options, accessible to everyday people both technically and financially. When binary options appeared, traditional “vanilla” options had already been around since the late 90’s, especially for large companies, hedge funds and financial conglomerates who could better diversify risk and earn additional income with their aid.

These kinds of options are still around today, however, they have a more complex structure and require larger investments. To put it simply, the principle behind traditional options is buying/selling in the future a specific asset price the moment the trade is closed on the exchange. When the financial crisis hit, the demand for “vanilla” trading dropped, so the leaders in CFE decided to make traditional options binary, with a simpler working principle and significantly lower minimum threshold per contract.

Binary options are also contracts on the exchange, however, their acting principle lies in the materialization of either the growth or decline of asset price through the course of a predetermined time period. More simply, to close a trade you must correctly determine ahead of time where on the asset chart the price will move to, either above or below the place it is situated when the trades are placed. If your forecast is correct, following the trade’s fruition, you will earn up to a 90% return on the initial investment, although, if it is incorrect, you will lose all funds investment. There is no need to physically acquire assets, only to correctly forecast their rate movements on the chart, BUYING if the prediction is up, SELLING if the prediction is down:

 

Speculating on the Binary Options Market

 

You either make a profit or lose the entire investment when the trade is closed. This binary logic lead to the name of this type of contract, that has opened to door to the financial market to even the most average of joes.
Simply put, nothing that has been described here is innovative in any way. Even in the 70’s of the last millennium, during the Great Depression in the States, there were companies who took out short-term stakes on the future value of securities. Meaning that the option we have before us today is a modernized, well-advertised version of the old practice of betting on rates.

Why has speculating on the binary options market become so popular? The leading factor is financial access. The issue is that, in order to speculate on currencies, funds or raw material goods, you need to have a large capital at your disposal, totaling to thousands of dollars, then you need to physically acquire the national currency, corporation asset or gold. You can start speculating on the binary options market with as little as a $10 dollar deposit. The short period for earning profit plays a significant role in their popularity as well, with periods starting from 60 seconds. Meaning that if, for example, you place a trade with $100 dollars, in only a minute you can earn 90 dollars of pure profit. This type of profit can’t be made on any other existing tool online.

 

Where Can You Speculate On the Binary Options Market

You have one of two options as to where you can speculate on the binary options market or the futures market as it is sometimes called. You can either go through official exchanges, such as the CFE, Cantor, or the CME, or the online platforms of brokerage companies. In general, the majority of traders in most countries only are able to access the latter option, as all the official options exchanges are located in the US, and are closed to Russia, CIS and many other countries all over the world. Moreover, trading on options exchanges is less lucrative as American exchanges set high entrance thresholds, offer a very limited assortment of assets and don’t provide fixed percentages of profit. Of course, if you really want to, you could trade on the exchanges’ official online platforms, to avoid the traffic, study complex English-language contracts and cough up huge starting deposits. However, as experience shows, the profitability of trades on the official exchanges don’t compensate for the conditions put on traders. Moreover, speculating with binary options on the exchanges hasn’t even gained popularity amongst Americans themselves, who also aren’t thrilled with the aforementioned trading conditions.

Therefore, the most accessible and, at the same time, profitable option is speculating with binary options outside the confines of the exchanges, made available through online brokers. Don’t worry about going around official exchanges, as these companies are legal entities as well, they are licensed by financial regulators and provide you access to real exchange asset rates on the chart. Meaning that you receive the very same financial tools as American traders, but with much less hassle, both to you and your wallet.
You can start speculating with these companies without any confusing red tape and with nearly any amount of starting capital. Of course, to trade, you need to go through a registration process, although, unlike the official exchanges, this can be completed very quickly. For example, it only takes several minutes and $10 dollars or more of starting capital to register on most of platforms. Many platforms offer trades starting from $1 dollar as well. When you register, a demo account is automatically opened with a virtual trading balance, enabling you to gain all the experience you need without risking any of your personal savings.

 

Trading Platform

Speculating online is conducted through a trading terminal, it is necessary for trading, enabling lucrative trading from the comfort of your couch. The trading terminal itself is a unique web program, loaded on the broker’s site with your chosen chart for asset trading and manually for opening options. There are often 50 various assets for price forecasting on trading platforms, such as currency pairs, oil, gold, and cryptocurrencies. You can open the rate chart for any individual asset you’ve chosen, as well as the interval and the type of price display. The interval is equipped with specialized tools for market analysis, enabling you to forecast analytically, not blindly. Typically professional trading software for speculating looks like this:

 

Where Can You Speculate On the Binary Options Market

 

 

How to Earn a Profit From Binary Options

We have finally reached the main question regarding how to profit from speculating on the binary options market. In this plan, it is worth mentioning off the bat that it isn’t enough to know just one approach to speculating because if you open options at random, assuming future price fluctuations, you will lose all your investments right away.

Your trading experience begins with completing a basic educational course. It is vital for every trader, regardless of if you are economically and financially literate or not. The point is that no one can conduct this kind of speculating through intuition alone. The trading process is conducted with the help of technical and fundamental market analysis, enabling you to forecast, with roughly 85% accuracy, where the price will move next. Specialized trading strategies are used in analysis. They are combinations of various expected price behavior conditions, the appearance of which is generally considered to signal further price movement. Precisely in order to learn the approaches to forecasting the market and how to use trading systems, it is vital to go through an educational course. Furthermore, these courses are available on the brokerage platforms completely free and are made up of easy-to-understand materials, such as dictionaries of trading terminology, step-by-step instructions, interactive books and video lessons. Therefore, you really need to spend a bit of time studying materials at your disposal and gaining some experience on a demo account.

 

Speculating in Practice

There are a ton of effective trading strategies that you can apply to the binary options market that produce profit no less than 80% of the time. That means that 8 out of 10 trades opened will be profitable when using a trading system. It isn’t possible to go through all the approaches to analysis in one article. You can learn more about them in the educational materials available. In this article, we will provide an example of speculating with a simple trading strategy, based on the Moving Average and the MACD. They should be set up on your chart, displayed with candles and the interval M1. These indicators should have the following parameters, which will identify the points when the asset price shifts short-term

● EMA, period 10
● EMA, period 5
● MACD with no changes to the setup

The indicators’ trading signal will appear in the chart as an intersection of the EMA lines in a specific direction and an intersection of the lines with the same direction in the MACD window. As you can see in the screenshot, the indicators show 2 lucrative rate reversal signals, where you can close the contract profitably.

 

How to Earn a Profit From Binary Options

 

If you place trades using the trading signals of these technical indicators, you must set the expiration period within the range of 5-10 minutes, depending on how volatile the price movement is.
That is how this approach to speculating on the binary options market looks. It is the easiest and most accessible way to make a profit online with minimal starting capital required.

TRADE CRYPTOCURRENCY

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

Speculating on the Binary Options Market
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