In recent years, binary options trading has become an accepted form of investment in the financial markets. The rapid spread of binary options started in 2009 and after some time they have become a significant competition to Forex.
- On the one hand, this type of trading turned out to be more attractive for beginners, because it is much easier to learn how to trade options, and deposits are often even smaller than in Forex, while the risk is calculated in advance.
- On the other hand, options attracted many forex traders and it contributed much to their popularity.
Today we will talk about how to start trading binary options from scratch, what you need for that, how much money you need, where and how to start.
- How much to start trading binary options with
- Brokers and Market Regulators
- How to start binary options trading from the scratch
- Trading Example
- Instruction for beginners
- Is it worth it
How much to start trading binary options with
Most brokers have a minimum deposit of $100-300 to open an account. This initial amount is optimal in order to make at least 10 trades.
If a broker offers ridiculous minimum deposit amounts of $5-10, there is nothing good about it. Don’t count on profit! With a small deposit you have a big risk of losing everything!
Just imagine if you funded your account with $5,000 instead of $100. Wouldn’t you be more careful with your trades?
In determining the amount of the transaction, it is advisable to follow the golden rule:
“Never trade an amount greater than 5% of your deposit”
Brokers and Market Regulators
It is IMPORTANT that the broker has a regulator. Again, the blacklist of brokers who defrauded their clients is 99% unregulated companies.
There are many different regulators in the world, the main thing is that the broker must have a license in at least one jurisdiction. For example in the EU it is CySEC, MiFID, FCA and others.
- The presence of a broker’s license from one of these regulators, indicates that in the process of work there will be no problems.
Before you start trading binary options, you need to register with the chosen broker. The process takes only a minute, you have to enter the most basic information:
- first name;
- last name;
You can replenish the account in different ways, the standard set of payment systems almost always includes: bank cards, PayPal. Immediately after making a deposit it is necessary to pass verification.
Verification is a whim of the regulator, not the broker. This way you will be fully protected. By sending a scan of your passport and proof of residency (a receipt or proof of residency), you will prove that you are you.
After the validity of the data in the account is verified by verification, you can move on to the main thing – to start trading binary options.
How to start binary options trading from the scratch
Binary options are often compared to the gambling industry because, at first glance, traders literally guess the price movement in order to make a profit. But such thoughts are a fallacy. Resemblance with gamble is only superficial, because choosing asset and predicting price movement requires thorough monitoring of market situation, development of effective strategies and general understanding of financial market functioning. And he who treats it as a game always loses money.
Can I start trading binary options from scratch?
There are no institutes or universities for trading, and you don’t need a special education for that. But that doesn’t mean you don’t need to know anything. Your first step to success is to choose one or two assets. You need to focus on one thing, one sector, one market to understand it better.
For example, you chose oil. Examine all the factors affecting oil, look at the latest oil stock figures in key countries, recent agreements and expected events. Look at how the market has reacted to any changes in the past.
The mistake many people make is to open trades in different assets at the same time without proper analysis, without real understanding. If you want to start trading binary options from scratch, you need to know as much information about your asset as possible. Only then you will be able to make an adequate forecast and decide whether the price will go UP or DOWN.
This is the analysis and the assets itself which is the topic of our website, so you will find in the menu columns on fundamental analysis, technical analysis, strategies and other ways to analyze the market or find ready-made forecasts and see the economic calendar.
You can analyze assets in different ways, but it’s the result that counts. That’s why many traders prefer not to analyze an asset, but to work by the signals of the indicators. In this case, you may not even know what the company does or what is happening with gold today.
Indicators are technical analysis tools that show you when to open trades UP and DOWN. Dozens of strategies are based on this principle.
One of the easiest ways to make money on stocks is to trade the trend. Many books have been written on this topic and there is even a saying – Trend is your friend.
We opened this page and chose the appropriate asset, which turned out to be the shares of Apple OTC. We will now specify the trade deadline as 8:10 (in 1 minutes):
At the moment, Apple’s securities are in a downtrend, so we decided to follow it and set the forecast to DOWN:
- If at the closing of If at the time of closing the option the stock is cheaper than at the time of purchase, even by one point, we will get 92% profit.
At the indicated 8:10, the trade closed automatically, and look at the chart at that moment. The stock prices continued to fall, and we earned 92% of the investment and returned $192 ($100 investment + $92 profit):
Instruction for beginners
- Choose a broker with a regulator.
- Refill your account.
- Choose an asset and analyze it carefully.
- Choose the term of the option and predict the growth or decline at the given time.
- Open a deal.
- Receive and withdraw profit.
Of course, behind every trade there should be an analysis of the asset and a trading strategy, and don’t forget about money management.
Is it worth it
If binary options were not profitable at all and only brokers earned on them, then they simply would not be so popular among investors and would quickly fall into oblivion. In addition, the entry threshold is very low – it is enough to have $200-300 on the account to get started.
Registration also does not require any paperwork – you only need to go to the broker’s website, fill out a form with personal data, confirm your identity and that is all – you are a full member of the exchange.
And in order to earn the first money it is enough to have common sense, to analyze the market, apply the strategy and not to fall into emotions or, worse, gambling. As professional traders say – treat trading as a business.
Reliable broker for trading binary options
International broker Pocket Option allows to open transactions on binary options on shares, stock indices, energy resources, currency pairs and cryptocurrencies on a special option platform. Profits on options reach 80-95%.
Website: Pocket Option