Binary options review provides the essential information about binary options in order to better understand all aspects of binary options.
It is VERY easy to trade binary options but before covering the trading aspects we start with an explanation of what binary options are.
Binary options are categorized as exotic options. The name “binary options” represents the unique feature of these options which is the reduction of possible outcomes to only two predefined potential outcomes. One predefined outcome is what happens if you win and the second outcome is what happens if you lose. The most common condition is whether an asset progresses up or down (increase or decrease in value) which is called a call/put options.
In a case of a win where the trader predicted correctly the progress of the asset, the predefined winning outcome is realized and the trader gets paid. Usually these payments are significant compared to the invested money (70-400%).
Binary options market is in a constant state of growth and there are many brokers that offer online binary options trading. If you decide to take advantage of the opportunities in binary options, the first step is to choose a binary options broker. Choosing a binary options broker is explained in our article “How to choose a binary options broker“.
Once you registered and made a deposit with at least one binary options broker, you need to get educated on the matter and you can use our binary options education, the education materials the broker provides, and the personal trading training session you get from your broker when you qualify for VIP level. Like any form of trading, getting the perspective about the market, the tools and the techniques, is a key factor to the successful trading. There are professional binary options traders with dedicated funds of millions of dollars and they all started by getting knowledgeable about the market and about binary options trading specifically.
Binary options review – Binary options trading
Every binary options broker offers different functionality and tradable binary options. The first things to do after you signed in for the first time with a binary options broker is to get familiar with the broker’s platform and to see what are the available trades you can make. Some factors to take into consideration are: 1. Payout – what options give you what predefined conditions (for winning and for losing). 2. Binary options expiry time – what are the time intervals the binary options expire. 3. Binary options trading methods – what are the offered trading methods the platform provides. Usually a broker will have call put binary options and most brokers offer at least one or two more trading methods. 4. Assets list – what are the tradable assets with binary options the broker offers. 5. Special exit and extend features – does the broker have any tools that let you to extend or close your trades prior to the expiry. These tools let you reduce losses in a losing trade or secure profits in a winning trade on a volatile asset.
After you have a first impression from the variety of options you have, it is time to place your trades. Use our binary options tutorial to learn all you need to do in order to place a bid and make a trade with better chances of profitability. If you want to learn more about the specific techniques to analyze and improve your trading performance, you can use our advanced guide “How to trade binary options“.
Trading in general and binary options trading in particular can be very profitable. There are not many ways to triple your money in a matter of hours. BUT every new trader must be aware to the fact that although significant gains can be generated, the cases of people creating millions of dollars from 1000$ investments are rare. Usually, trading binary options requires several deposits that are used to gain practice, experience and the trading instincts of what to trade when and how. When traders start the process they to understand that they should accept some losses and know they will be required to manage their investment and deposit funds until they stabilize their winning/losses ratio and then make it profitable.
The main problem of emotional traders is that they expect to make immediate profits and can’t stand the losses. Most trader stories you hear about big losses are caused by mainly two reasons: 1. Poor judgment – traders do not dedicate time to learn and make educated decisions and improve themselves as traders or that they take too big risks and trade with all the money in their account. 2. Impatience – statistical measures show that many of the losing traders just leave too soon. Sometimes these are traders who are only willing to place one deposit and run out of money and sometimes they just leave after some losses. The right state of mind is required to succeed in binary options trading and a trader who wants to be able to generate significant profits that can get to 10,000$ a month or more should make the decision to get educated and practice and avoid giving up In the process.
Make sure you understand the importance of being serious about trading, know in advance that you should invest in learning and that you will be required to invest just like you would in MBA program to be able to enjoy the fruits of your education in the future. Being a successful trader is not just about the risk taking but about the patience and the decision making so make sure you make educated decisions and do not risk your financial future, use only the money you have and not the money you need for something else.
Always remember that getting the education and practice in binary options increase your profitability.
Binary options review – Binary options history
Binary options were regulated and approved as a valid trading method in the U.S. in 2008 when it was reviewed and approved by the Securities and Exchange Commission. The approval process started after a proposal by the Options Clearing Corporation was submitted in 2007.
After the approval of binary options, both the American Stock Exchange ( AMEX ) and the Chicago Board Options Exchange ( CBOE ), launched trading of binary options.
In 2009 the North American Derivatives Exchange ( NADEX ) launched binary options tools and made them available through their on-line platform. Nadex pioneered the internet binary options trading which is now provided by more than 30 registered internet based binary options brokers that apply to different regulations.