In this article I would like to show you a simple binary options trading strategy, this brief guide to binary options trading will show you how binary options are traded and give you an idea of how the market works.
Binary Options Trading Guide
How to trade binary options
The first thing you will need to understand is binary options trading is a little bit different from traditional binary options trading. You are not dealing with a single binary option, you are dealing with a bunch of them. A single binary option is a two-dimensional table showing the current value of a quantity of one type of product or investment, say gold or stocks. For instance a gold binary option would show the current price of gold or if the price of gold had been to rise in the last hour. By contrast a bunch of binary options is the opposite of a single binary option. A bunch of binary options is a table showing the current value of a quantity of a second type of product or investment.
What binary options are
The simplest way to describe binary options trading is that it is trading in options of two or more coins/equities on a given underlying asset. For instance, let’s say you want to bet on the New York Exchange’s share index the NASDAQ. If the NASDAQ falls 5% you can do this by taking a pair of options: one calls for shares to go down and the other calls for shares to go up. I won’t go into the complications that binary options trading presents here. What I want to do is give you an idea how this trading strategy is traded.
What is a binary option
The binary option is an investment option that offers the right to sell, for example 1 pound or for more than 1 pound (with an inverse) at any price specified in time to come. When you place a binary option you are buying the right to sell it at some price in the future. In other words, you are buying a time-biased bet. When you are trading binary options you need to understand the difference between a call option and a put option. A call option gives you the right to sell something (such as bitcoin for example). A put option gives you the right to sell something at a fixed price in the future. For example, you can buy a put option with a date to sell. When binary options traders buy the binary option option, they are buying a short call option with a date to sell.
The two types of binary options
Binary options trading is based on two different forms of contracts, spread options and naked calls. As the name suggests spread options are used to take the advantage of a spread between two prices. If the options price rises, you will be able to make money as you can sell the option for a higher strike price. If the options price falls, you will be able to earn money by buying back the option and selling it for a lower strike price. Naked calls are usually used by options traders who can’t or don’t want to short an option, they can be sold with the intention to never be sold. While the majority of investors use spread options, this is a bit of a controversial topic as some brokerages limit the use of spread options to clients.
The time frame of binary options
The most important thing about trading binary options is that it is short-term trading. Every transaction has a fixed time period and a certain timeframe. Traders use all kinds of tools like the time curve and Fibonacci retracement to trade them. As the time window gets close to the expiry date, it is time to enter the trade. Whenever you buy a binary option, you pay for the underlying stock, in order to receive cash at a fixed time. Binary option analysis There are three types of binary options: Cash-only All you have to do is to buy one binary option, regardless of the stock you are going to trade it against.
How to trade binary options
When we are in binary options trading we want to either collect or lose our money. If you want to collect you want to open a long position while a short position or have an option position, you will have a short position as the market is saying is short the underlying, when in a long position you will be open long to go long when the market is saying is long, all in all this is called a stop loss.
The market has always been a mystery for traders and investors. Some of them don’t believe it even exists, but if you ask yourself, why trading cryptocurrencies is becoming more popular than trading stocks? The answer to that is simple. Bitcoin and altcoin trading has been the dark market for investors who prefer anonymous trading. At the same time, this method offers a great chance to make money without having to worry about insider trading or market manipulation. And you know what? The right approach is very simple, and you don’t need to take too much risk or set yourself up with expensive equipment and development time. To find the right approach you just need to follow two rules: Know your binary options and know when to stop.