Free Account with the Binary Options Robot
Start Trading Binaries with the FREE Binary Options Robot - CLICK HERE

Where to Start in Binary Options Trading

If you are New to Binary Options we want you to use this as your point of reference when it comes to getting started. It can be a bit intimidating not knowing what you are doing. This page should clear up some of the major hurdles in Binary Trading. We break it down using our Eight Step Program.

What are Binary Options?Building a Trading Strategy
What is Needed to Trade?Repeat the Process
Picking a Binary Options BrokerEvaluate Your Trading
Demo TradingConclusion

Step One: What are Binary Options?

Getting Started in Binary OptionsBinary options are in the simplest terms a prediction of whether an asset’s price will go up or down. You are not buying or selling an asset, but merely guessing the direction that its price will move in. This is why the assets you are dealing with are called “underlying assets.”

Risk Warning – “Investors can lose all their capital by trading binary options”
When you enter a binary option, you are choosing whether the price will go up or down. If you think the price will go up, you want a call option. A put option is used when you think the price will go down. These terms are carried over from traditional options trading, but have a different meaning as you are not actually moving shares of the underlying asset.

Attention All Traders: Trade Like we do using our Chart setups. Find out more here.

Before you begin a trade, you will need to select which direction you think it will go and how much money you are putting at risk. You will be told a rate of return that you can earn before you enter the trade. This is important. You want to select the very best rates of return as this will give you the most money when you are correct in your predictions.

Step Two: What do You Need to Trade Binary Options?

To trade binary options, you need a few things. First, and most importantly, you need a sizeable amount of money that you can use to trade with. The amount that you are using to trade will vary from person to person, but you do need to be sure that you are not trading with money that you will need to maintain your current lifestyle. This means that you shouldn’t trade with your rent or grocery money. Put only the money that you can afford to lose at risk through trading and you will be set.

The Starter List

High Speed InternetYou also need a computer with a high speed internet connection. You can trade with the broker mobile apps, but you want to get started on a computer or Tablet PC at first. You need to know just what prices are doing in real time in order to be the most successful. A shoddy connection can lose you a lot of money if it means interrupted service or missed data. Eliminating this uncertainty will allow you to more clearly see where prices are and will make sure that you have no mistakes when you are trading.

We also recommend a charting package which can be found free on the Internet. We work mainly with Metatrader 4.0 charts, but you can use a site call FreeStockCharts.com

You Can Download this Metatrader Chart For Free

A Look at MT4
Once you have these few thing situated you will be ready for the Next Step.

Step three: Picking a Binary Options Broker

Binary BrokersChoosing the right broker is an essential part of trading. You might think at first that all brokers serve the same purpose, but this is incorrect. Different brokers have different rates of return for their underlying assets. They also offer different promotions and different variables in their options. If you are trading the Euro versus the U.S. dollar (EUR/USD), you want the broker that gives you the highest rate of return for this asset. You also want a binary broker that will allow you to customize your trading with this asset.

This last point is important. Most of the top brokers are now mixing up their options offerings by incorporating one touch, boundary, or 60 second options. These things are for advanced traders, but they will allow you to better tailor your trading to your own needs. If they don’t offer these types of trades for the asset you will be trading, you may want to consider a different broker.

Step Four: Demo Trading

Demo trading is the best thing you can do to prepare yourself for real life trading. Binary Options Demo trading allows you to practice your trading techniques without putting your hard earned money at the mercy of the market. The thing to remember about demo trading is that the vast majority of brokers who offer this require that you open and fund an account before you are allowed to demo trade. Demo Trading Binary OptionsThis doesn’t mean that you absolutely must trade with them—you can always withdraw your money before you begin trading. Finding a broker that will give you the best demo experience is important, especially if you are new to trading. There are many brokers that allow you to use their demo services for a limited time such as TradeRush, but these are not always conducive to the beginning trader. You want to learn to use the software, but if you are new to trading 72 hours is simply not enough time to master a new technique.
24option Practice Account

Risk Warning
This means that your choices when selecting a broker to demo trade will be limited. This is okay when you are just beginning as you want to make sure that you completely understand what you are doing. You might need to front money in order to begin demo trading, but you never need to put this money at risk if you do not want to. It is far more important that you understand fully what you are doing before you actually put your money on the line.

Binary Options Demo trading might seem like a big hassle, but you need to consider the fact that there is a steep learning curve when it comes to trading. By learning what you are doing before you start using real money, you are bettering your overall chances of being successful in this marketplace. The more experience you can give yourself, the better off you will be and the less likely you are to lose a lot of money while learning to trade.

Step Five: Trading Strategy

Binary options can be tricky, so it’s important that you devise a sound strategy before you begin. There are many systems out there, but it is important that you select one that fits in with your situation. You need to take into account your risk tolerance and the amount you are trading with. A strategy that relies on hedging, for example, might not be the best choice for someone with limited trading capital as you are risking more here to earn less.

Trading StrategyThe easiest way to prepare a strategy is to find a few different indicators and methods of analysis that you can double check against each other. Borrowing a strategy that incorporates all three of the major types of analysis will be your best bet here. Technical, fundamental, and sentimental analysis methods are all useful—figuring out how to look at all three before you execute a trade is going to be the most conducive to predicting price motion correctly.

Step Six: Repeat

Repeating patterns of success is crucial to your long term survival as a binary options trader. Find a system that works for you and constantly be tweaking it in order to make it as profitable as possible. The same strategy won’t always be able to be replicated, so you need to separate the methods that work from the ones that do not always work. Repetition over the long term will help you to figure out which strategies are the most beneficial for long term success.

A very important step is to keep with what works, but always evolve as market conditions change.

Step Seven: Evaluate

Repeat SuccessEvery once in a while, you will want to take a step back from your trading and give a good honest look over what you’ve been doing. Short term success means very little as there is quite a bit of variance in binary options trading. Look at how you are performing over the course of a month and move on from there. Even a month will sometimes be too short of a time period to figure out your true correct trade ratio, but it is a good metric to start with. If something is simply not working, a month should be sufficient to figure this out.

Evaluating What WorksEvaluating your progress is important for other reasons. It will help you to select the very best options at the right rate of return. You might think that you will be most profitable with a 65 percent correct trade rate, but if an asset has a higher rate of return, you might even be able to make more on that different asset with a 60 percent correct trade rate.

Step Eight: Conclusion

Trading binary options does entail a good deal of risk, so having a firm grasp on the basics is very important before you start trading. I cannot stress enough how important practice is in this field. Extensive demo trading will be your best friend here. By devising a strategy that works over a period of time you will be giving yourself the biggest advantage that you can find. Trading smart is also important. Find the broker that has the highest rates of return for the asset you wish to trade. These simple guidelines should get you started in the right direction and will enhance your trading career.

Risk Disclaimer