Our 7 binary options tips to start trading
1 Tip: Binary options trade is not in any way gambling but it is a form of investment. Here binary options are used as financial instruments which gauge the movement of assets in the market. This is one important distinction that one has to make in order to appreciate this type of trading. In this trade, the pay off can take to outcomes, either a fixed amount of money or loose out after a given period of time. The cash/asset or nothing option means that an investor will get a fixed amount of cash if the assets which have been used in trade expire within the direction which has been stated. This is very different from gambling, a game of chances, here one makes a gain depending on the strategies and techniques in possession, whereas in gambling it is only a matter of chance. You do not need to have prior knowledge on the bet, the fact remains that you can either loose or win on a bet but in binary options trade, a gain will depend on how the market is performing at any particular moment. This means that a thorough understanding of the market trends need to be taken seriously, it is only through such knowledge that one can make the right predictions and win. If you come into binary options trade with a mentality that it is a form of gambling, you are bound to fail as this activity requires a set of strategies , which if applied properly can lead to better gains. It is not a game of chances where you make predictions; here you use assets to make prediction on the movement of their prices, where you need to have studied the assets that you use for trading. If you have the right information, chances of succeeding are very high as opposed to gambling which is a mere a question of luck.
2 Tip: Do not invest without strategies, so study very hard before start to invest in real way. Investing in binary options need a thorough understanding of how the market operates. It needs utilization of sound strategies to make it in the highly lucrative yet risky venture. Before you begin to trade, you need to master the basics, get to understand how the trade is carried and the whole idea behind the concept. Without such an understanding, you are not likely to make it in this trade. You may need someone experienced to guide you through the trading procedures before embarking on the real trade. Alternatively reading literature from some of the binary options traders and brokers can give you a head start in this trade. Any new trader is also required to use dummy account to understand how the trade is carried out; it is only after one has grasped the concept and is ready to start trading using real money. Dummy account are not only a preserve of the new traders, those who have been in trade for sometime can also use them to familiarize them with the new platforms or when comparing two or more binary options brokers. The idea here is to get as much information as possible before one engages in real trading. One can utilize the various platforms presented by various binary options brokers to sharpen his or her skills in the trade.
3 Tip: Set a maximum amount to invest every month and do not go beyond. If you run out of money fixed, stop and waiting for the next month. Money management is the key You need to have targets, set a maximum amount of money which you intend to invest in any particular month and stick to that. This means that you will not tie up your money in one or more assets and then leave your other financial obligations neglected. It also means that you will maximize your trade at any given moment. In case that you have reached your maximum amount of investment, it is advisable that you stop trading and wait for the next trading month. Just like any investment, putting all your eggs in one basket is a risky affair and that is why you need money management skills.
4 Tip: Read the reviews of brokers before opening an account and trying to understand which of them to open an account. There are several binary options in the market, this is a positive thing as it gives the investor a choice. When presented with a choice the investor can select a broker who will give him or her best returns and also experience in trading. Having said that it is also important that the investor get to understand the broker before embarking on account opening. Get a review of the broker so that you can know what you are getting yourself into. This information is freely available in the internet, you will learn what other investors have to say pertaining their experience and the gains they have made through such a particular broker. There are also independent reviews which are carried out by analysts, use them but also compliment it with information from other reliable sources.
5 Tip: Avoid a situation where you want to invest only with an aim to recover the losses obtained. Follow the strategy chosen and see if that does not work, stop. If you are in this trade to recover the losses that you have made, then you can be in for a rude shock. This demonstrates a bad strategy which can lead to more frustration. Follow the right strategy and you will definitely get the required results. However you may have tried a strategy but it has only led you to losses, review it stop and get advice from those who have made it in the trade.
6 Tip: It is important that you learn to recognize the main levels of support and resistance. When you recognize these levels you will have obtained valid trading signals, in most occasions the prices revolve around these parameters and therefore one can invest in the right direction.
