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9 Frequently Asked Questions on Binary Options Trading
Binary options are useful and handy financial trading instruments. They allow traders to take advantage of the price movement of various assets such as stocks, commodities, cryptocurrencies and others with just a computer connected to the internet.
Although binary options are popular, many people seem not to know much about them. This article will provide answers to the most frequently asked questions on binary options.
What are Binary Options?
Binary options are a straightforward form of derivatives and can be traded on any market. As a binary options trader, your job is to predict the future direction of an asset’s price and then to place orders following your expectations.
● If you predict an asset will increase in price, you place Call orders
● If you predict an asset will decrease in price, you place Put orders
If your prediction is correct, you will receive a payout from 65% to 90% of your investment amount. However, if you are wrong, you will lose the whole one.
Binary options bring you many benefits such as:
● Allow you to trade various assets
● Easy to use if you are educated enough in binary options trading
● Require a low capital
● Can bring quick profits if you have a good level of knowledge what you are doing
That’s why binary options are preferred!
Are Binary Options Legal?
Yes. Most companies offering binary options trading services are regulated by reputable financial institutions. So, you can be assured of binary options trading because it’s protected by international laws.
Do I Have to be 18 Years Old to be Able to Trade Binary Options?
Yes. To trade binary options, you must be 18 years old. This is one of the basic rules set by regulating organizations. You will have to provide binary options brokers with personal documents to confirm your identity, age, and home address before withdrawing money.
If you are not old enough but still want to trade binary options, you can trade on someone else’s account. However, we do not recommend this.
How to Start Trading Binary Options?
To start trading binary options, you will have to open a trading account at a binary options broker. We recommend Finmax as it is one of the most prestigious binary options brokers today.
Follow these steps:
Step 1: Enter Finmax’s official website
Step 2: Press the sign-up button at the top right corner of the page
Step 3: Fill in your personal information and press REGISTER
Step 4: Confirm your email
Step 5: Choose your preferred type of account, deposit amount and funding method, then press SUBMIT
Finmax offers a welcome bonus of up to 100% of your deposit amount. If you don’t want to receive it, click on CANCEL BONUS.
After completing these 5 steps, you will be forwarded to Finmax’s trading platform where you can trade Binary Options.
1. Select the asset you want to trade
2. Choose your preferred investment amount and the expiry time of your binary option contract
3. Select your expected direction of the asset
It is just as simple as that!
Can I Trade Binary Options Even Though I Don’t Know Much About Financial Markets?
Sure, you can, but you will need to learn and practice a bit. You can do so directly at Finmax. This broker offers you a comprehensive education on binary options trading and a demo account with $ 1,000 of virtual money to practice trading. Feel free to test trading strategies as much as you want as you won’t risk a single penny!
Finmax also provides you with many different forms of learning such as webinars, videos, and analysis. In addition, you are supported by Finmax’s experts who have many years of experience in the financial trading field.
How Much Should I Start Investing in Binary Options?
If you are a new trader, we recommend you to invest only $250 in binary options. This is the minimum deposit required by Finmax. By starting out small, you will be able to gain real trading experiences at a low cost.
The minimum investment amount at Finmax is as low as $5 so you can have plenty of chances to profit from the market with your deposit amount.
How Much Can I Earn With Binary Options?
The profit you can earn from binary options trading depends entirely on you. If you have good trading and risk management skills, you can earn unlimited money with binary options.
Trading skills are not something naturally available; they must be trained. Therefore, you have to study and practice to become a successful binary options trader.
I Want a Specific Number. How Much Money do Successful Binary Options Traders Earn Each Month?
There is no fixed number for the monthly income of successful binary options traders because the amount they earn depends on their capital and trading style.
On average, binary options professionals make an ROI of 1% to 6% per month. That means, with a capital of $10,000, the monthly profit may vary between $100 and $600.
Traders with risky trading methods can earn more. However, the higher the profit, the greater the risk.
What is the Best Binary Options Trading Strategy?
The best binary options trading strategy doesn’t exist. Each strategy has its own advantages and disadvantages, so don’t try to find a Holy Grails strategy.
To succeed in binary options trading, you will have to flexibly apply the knowledge learned. Learn to combine tools and take a comprehensive look at market developments.
Above are the most commonly asked questions on binary options trading.
One of the misconceptions of beginner traders is that binary options trading is a way to get rich quick. In fact, it can help you get rich, but slowly, not quickly. You will have to treat it as a business and practice hard to become successful.
So, if you decide this to be your career, trade with consistency and never give up.
“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”
9 Frequently Asked Questions about binary options
A binary option is a contract with the condition of a price rise or fall during the set period. Binary options are also called digital options. The profit is fixed and known at the moment of making a deal. If the option expires in-the-money, the fixed amount known at the moment of purchase is paid.
What is a CALL option?
A Call option is an option the underlying price of which is expected to rise. If an investor expects the price of the underlying asset to go up, he needs to choose a CALL option. If the price of the underlying at the expiry time is higher than at the moment of purchase, an investor gets 70% profit no matter how much the price grows, even if it’s just 0.001. If the price is the same as at the moment of purchase, the investor gets back the whole amount of his investment.
What is a PUT option?
A PUT option is an option the underlying price of which is expected to fall. If an investor expects the price of the underlying to come down, he needs to choose a PUT option. If the price of the underlying at the expiry is lower than at the moment of purchase, 70% profit no matter how much the price falls, even if it’s just 0.001. If the price is the same as at the moment of purchase, the investor gets back the whole amount of his investment.
What is a minimum investment?
An investment is an amount of money you spend to buy a binary option. You can invest in binary options from $10,000 up to 20,000. Brokers have a minimum investment requirement. As a rule, this is $25.00, and you cannot buy any option if your balance is less. For instance, AnyOption minimum requirement to buy a binary option is $25.00.
How can I buy a binary option?
First, you need to sign up with the broker’s website and top on your personal account. Then you choose an asset (shares, commodities, indices, currencies). For instance, you chose to buy Apple shares, you need to choose whether the price will go up or down. If you anticipate rise, you need to click CALL and enter the amount to buy a binary option. Then you set the expiry – from a minute up to a month. If you believe that the price will rise during the next hour, buy the binary option for an hour. Click the confirm button and it’s done.
How much money can I make with binary options?
If your price forecast comes true, you get a fixed profit at a level of 65% up to 71%. Brokers offer different terms and payoffs. For instance, AnyOption broker offers various risk-to- reward ratios and win loss rates.
What if I make wrong forecast?
If you make wrong forecast, and by the time of expiry the price of the binary option doesn’t match your prediction, you will lose the whole amount of the investment. Some brokers do not allow their customers to lose all, and for instance the first binary option broker in the world returns up to 15% of the investment amount in case of loss.
How much can I invest in binary options?
Maximum amounts for binary options purchase are about $3,000 to 20,000 USD depending on the broker. You can buy the same binary option as many times as you want. Moreover, you can buy different assets together.
What is an expiry level?
An expiry level is the time of termination of a binary option. The expiry level shows the estimated price of the underlying asset at the moment of the contract completion.
For what period can I buy binary options?
You can expect the price will rise or fall at a certain moment. You can buy binary options for a minute, 10 minutes, 15 minutes, hour, day, week and month. When buying binary options you know how much time left till the moment of expiration.
Why does the broker refuse to show an underlying asset?
Binary options can be bought only during trading hours. In the world of the exchange trade there are such periods as the Pacific, Asian, European and American trading sessions. Therefore, you can buy, for instance, American stock only during the American trading hours.
How can I make correct price forecast?
To earn on binary options trading regularly, you need to make analysis of the underlying assets and their prices. If you want to get an accurate forecast, make technical and fundamental analysis. You can use special strategies as well to watch price action signals which are described in details on the website.
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Despite the variety of securities, the system of binary options is so simple that even a kid can make money on it! This is really engaging way to make huge money just listening to the news or analyzing charts!
Other great binary options websites:
1. Opções Binárias Brasil – https://opcoesbinariasguru.com – OpcoesBinariasGuru. The leading website in Brazil regarding FX, CFDs and option trading.
As the ingenious, binary options are always simple.
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The Breathtaking Follow the Trend Strategy!
Follow the trend is a basic binary options strategy. Actually, a trend is a basis of many different strategies and of technical analysis as well. And what is more important about follow the trend, the strategy doesn’t make trading too complicated.
Today, I’ll tell you about a trader who could return $126,800.5 on $1,000 investment in just two weeks!
Recently, a trading company arranged a competition between binary options traders. The participants were granted a $1,000 initial deposit. According to the terms and conditions of the competition, the winner had to make maximum profit during 2 weeks.
The winner of this competition has turned $1,000 into $126,800.5 within just two weeks. He could achieve this amazing result solely thanks to the follow the trend binary options trading strategy.
Simplicity of the strategy makes it available to anyone.
“Too many indicators and signals confuse you. To use them may have sense if you trade on the foreign exchange market, but this market is different”, said winner of the competition.
And the very point of the strategy involves no additional instruments. The only thing you need is to pinpoint the current trend and invest in a binary option based on your forecast.
There are three types of a trend, namely,
- Upward (bullish)
- Downward (bearish)
- Sideways (Flat)
Follow the trend binary options strategy means no trades during sideways.
Trend lines on a chart:
You can see how the trend lines look like on the charts of AnyOption:
I guess now it’s clear how they look like, and to pinpoint a trend is quite easy.
How to Select Binary Options Expiration?
If a current trend continues over 30 to 40 minutes or an hour, there is a strong probability that it will go on 10 to 15 minutes more. The winner of the competition used this peculiarity. He opened positions for 7 to 10 minutes.
Follow the trend binary options strategy doesn’t limit an amount of your investment. Each investor decides what amount he can afford to invest. You can use any financial strategies, for instance, not to invest over 10% of your capital.
After you have invested in a binary option, immediately look for the next underlying asset showing a vivid trend, say, a coffee futures contract. The more trades you open, the less the risk is. Even a vivid trend can be sometimes followed by a price reversal. According to the statistics of the competition’s winner, 15% to 20% of all trades don’t yield a profit. Therefore, if you open many trades, you ensure that your profit covers the loss arising due to 20% of unprofitable trades.
It’s important not to open several trades on the same underlying securities as it increases your risk.
Below are the screenshots of the trades based on the follow the trend binary options strategy:
As you see, multiple profitable trades (highlighted in green) cover all losses (highlighted in red).
To look for trends, to open trades, to look for trends again, and to open trades again is meticulous work. However, this is the way the winner of that competition could turn $1,000 into $126,800.5 within just two weeks.
This just proves again that following the trend yields a high profit. I used to check trends in indices and stocks as I considered the foreign exchange market unpredictable. However, that winner’s success proves that currencies as an underlying asset also show multiple steady trends.
Although follow the trend strategy is reliable, I advise you to always do fundamental or technical analysis to be sure of the trade.
If you trade following the trend, I advise you to deal with AnyOption. This top binary options broker provides convenient charts, and you don’t need any additional tools. Also, you can view four charts simultaneously. Besides, trading with AnyOption, you can try the strategy of reducing your risks as this is the only broker that refunds in case of a bad trade.
Binary options trading – Frequently Asked Questions
This page offers you answers to the most frequently asked questions on binary options that I receive every day in my mailbox. I hope you’ll find everything you need and everything that interests you.
I am new to trading and would like to start. Can you give me some advice?
My best advice is: Always be learning something new. Be it more trading patterns, watching videos of successful traders, going to trading workshops. This webpage may serve as your inspiration or source of learning materials. Alse I recommend to have a look at the tips for beginners.
I don’t want to invest just yet, but I would like to try binary options. Can I open a free demo account?
Sure, it is also highly recommended! You should never trade with real money, unless your trading pattern was proven in test conditions at a demo mode. This can be accomplished on our demo account which is available for free and does not require registration. Just open this page and start trading!
Also, a complete list with brokers who offer a demo account is available here: Binary options brokers with demo.
What is MetaTrader and why do you keep talking about it?
Metatrader 4 is a program that shows us nice graphs of price movement in stocks, commodities and currency pairs. This program shows very clear and customizable charts (much better than what the brokers show) and that’s the reason why you’ll be able to recognize and estimate the further development of the prices. More on this program in our MetaTrader 4 Show. In general, it’ll make you a better trader and that’s why I keep talking about it.
Where does the money that traders earn come from?
It’s simple: From the people that don’t make it.
A little bit more complicated: Let’s say that a broker has 100 traders. 50 of them will choose the exact same option CALL and 50 choose PUT. Everyone invests $10. Broker then has $1000 all together from his 100 traders. Only 50 will be successful, so then the broker has to give 50*$10* profit (for example 80%) = $900, but they are still left with another $100.
Can I start with binary options even though I don’t know much about stock market or Forex?
Sure, you can, but you’ll need a bit of a practice and study. You can start by reading our tips for beginners and I also suggest reading some ebooks that can be found on our website, including our own articles.
What is the best “binary option strategy”?
If you are looking for a trading pattern, that will guarantee you great results, then you are wrong. There is no super indicator thanks to which we’d be able to win all of the trades (that would be awesome though
It is important to learn to analyse the chart and our Technical analysis show can help you with that and always, even though you are sure that your strategy is the best, use your head.
What is the minimum amount of money I can to invest?
Minimum deposit with the broker IQ Option is $10, but the amounts differ within different brokers. Minimal amount to trade is then $1.
So, if you’d like to try binary options trading, you could try our binary options demo completely free of charge. All you need to do is follow the steps on your screen.
I’d like to trade binary options. Do I have to be 18 years old?
Yes, if you want to trade binary options you have to be 18 years old. Without confirming your age (ID, for example) you won’t be able to withdraw any of your earnings. If you’re not old enough but are still keen to trade binary options, you have to trade on somebody else’s account.
How much can I earn with binary options?
I get asked this question quite a lot, but unfortunately there is no answer to that. How much will you earn trading binary options? That depends completely on you. The amount of your earnings depend on how much time have you spent and how much you understood the particular binary options.
What’s the maximum I can earn?
I really don’t know the exact amount and it’s not given anywhere. Let’s say, you’d be getting lucky and earning around $6000 a month, that would be a bit suspicious. It’s a lot of money and brokers wouldn’t possibly like that – as I’ve told you above. It’s all just speculation, but it could make sense.
Best Binary Options Broker 2020!
Ideal for beginners!
Free Demo Account + Free Trading Education!
Get a Sign-up Bonus:
2nd place in the ranking!