Learn how to trade binary options

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Sign-up Bonus:

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

How To Make Money Trading Binary Options

Now that we have a basic idea on how binary option trades work, let’s take a look at a simple example.

Let’s say, you decide to trade EUR/USD with the assumption that price will rise.

You then look at your trading platform and see that the broker’s payout is 79% on a one hour option contract with a target strike of 1.3000.

After much deliberation, you finally decide to buy a “call” (or “up”) option and risk a $100.00 premium.

You could say it’s similar to going “long” on EUR/USD on the spot forex market.

Ending Scenarios After Entering a CALL Option Gain/Loss
Expiry price is above the strike price
(in-the-money)
$100.00 x 79% = $79
$100.00 + $79.00 = $179.00
You gain $179.00 on your account.
Expiry price is equal to or below the strike price
(out-of-the-money)
You lose your stake and your account declines by $100.00.

As you can see from the calculations above, the risk you take is limited to the premium paid on the option.

Payouts in Binary Options

Now that we’ve looked at the mechanics of a simple binary trade, we think it’s high time for you to learn how payouts are calculated.

More often than not, the payout will be determined by the size of your capital at risk per trade, whether you’re in- or out-of-the-money when the trade is closed, the type of option trade, and your broker’s commission rate.

In the example given above, you bet $100 that EUR/USD will close above 1.3000 after an hour with your broker offering a 79% payout rate. Let’s say that your analysis was spot on and your trade ends up being in-the-money. You would then get a payout of $179.

$100 (your initial investment) + $79 (79% of your initial capital) = $179

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Sign-up Bonus:

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

Easy peasy, right? Don’t get too excited just yet! You should know that there’s no one-size-fits-all formula for calculating payouts. There are a few other factors that affect them.

Factors in Payout Calculations

Each broker has its own payout rate. For starters, Forex Ninja’s intel shows that most brokers offer somewhere between 70% and 75% for the most basic option plays while there are those who offer as low at 65%.

Various factors come into play when determining the percentage payout.

The underlying asset traded and the time to expiration are a couple of big components to the equation.

Next, the broker’s “commission” is also factored into the payout rate. After all, brokers are providing a service for you, the trader, to play out your ideas in the market so they should be compensated for it.

The commission rate does vary widely among brokers, but since there are so many binary options brokers out there (and more coming along), the rates should become increasingly competitive over time.

When a Binary Option Trade is Closed

As mentioned before, binary options are typically “all-or-nothing” trading instruments in that the payout or loss is only given at contract expiration, but there are a few brokers that allow you to close a binary option trade ahead of expiration.

This usually depends on the type of option, and usually it’s only available within a certain timeframe (e.g., available 5 minutes after an option trade opens, up until 5 minutes before an option expiration).

When trading with a binary option broker that allows early closure of an option trade, the value of the option tends to move along with the value of the underlying asset.

For example, with a “put” (or “down”) option play, the value of the option contract increases as the market moves below the target (strike) price.

This means that, depending on how far it has moved passed the strike, the closing value of the option may be more than the risk premium paid (but never greater than the agreed maximum payout).

Conversely, if the underlying market moved higher, further out-of-the-money, the value of the option contract decreases and the option buyer would be returned much less than the premium paid if he/she closed early.

Of course, in both cases, the broker commission is factored into the payout of an option trade when closed early.

So before you decide to jump head first into trading binary options, make sure you do your research and find out what your broker’s payout rates and conditions are!

Risk and Money Management: How to Reduce Your Risks in Binary Options Trading

In this article, you will find out how to minimize your risks when trading binary options and earn more with smaller investments. You will also be able to compare brokers based on your risk appetite, as well as download some tips for reducing your risk and maximizing your profits.

You Will Learn:

Read these instructions all the way through, and you will save both your money and nerves. What is even more important, you won’t get disappointed with binary trading from the start and will learn the basic principles for successful trading. Below, you will find the most important info for your future business. Be careful and patient. Good luck!

Alex Ladko Binary options expert, owner of binaryoptionclass.com

Why People Lose Their Money When Trading Binary Options

Beginner traders often put large amounts at risk when investing in binary options. As a result, they lose their initial deposits quickly and get disappointed with online trading.

Most beginners lose their deposits just because they don’t follow the basic risk management or money management rules.

Here’s an example:

Sam learned about binary options on the net. He remembered he had wanted to try Forex trading for a while. However, in case of binary options, everything is much easier, and so he decided to explore binaries.

Sam invested a lot of time in finding a broker that suited his needs, he studied popular strategies, and finally made his first deposit. He selected a broker with a minimum deposit of $200 and a minimum investment of $20. So he just deposited $200 and started trading, investing $20 per trade.

After making 5 trades based on one of the strategies, Sam was twice in the money and three times out of the money. His account balance dropped to $170.

At that point, Sam thought that the strategy just didn’t work. He decided to try a different strategy and went on trading, investing $20 per trade again. After making 8 trades with this new strategy, he was four times ITM and four times OTM. His account balance now dropped to $150.

Sam got a bit bewildered, but then he discovered that his last two trades were profitable, and so he decided to raise his investment amount, this winning his money back. He bought an option at $50 and lost, His account balance lowering to $100.

Sam went on trading without relying on any system, just switch from one strategy to another. He made another six trades, three ITM and three OTM. His account balance dropped to $55, and his net loss was $145. He got disappointed and angry.

Sounds familiar, doesn’t it? Let’s see why Sam was wrong:

    After depositing $200, Sam invested $20 and even $50 in a single trade

By doing this, Sam didn’t even think about risk management, as his risk per trade was 10% to 30% of his account balance. Even the most experienced traders never exceed 2%; otherwise, you may just blow up your account. Later, I’ll explain why. For now, just accept it as the golden rule of money management.

Sam didn’t stick to any system

He made 5 trades based on one strategy, then switch to another, and then, perhaps, to another. This is another serious mistake. In order to decide whether a strategy works for you or not, you need to make 50 or, better, 100 trades. Then you need to analyze the result and conclude whether it fits your goals.

Sam tried to win his money back by raising the investment amount, which was already high

Having made a few profitable trades in a row, which drew him crazy, and he increased the investment to $50. This is a sure way to blowing up one’s account. Keep yourself well in hand and never break the rules you set.

What are Binary Options? – Honest Review

Binary Options is a financial instrument to trade on long or short markets in a certain period of time. The Trader only got 2 options: Win a high amount of money (75% – 95%) or lose the investment amount for this trade. It is like betting on rising or falling markets. Binary Options are very flexible. It is possible to trade any financial market and use different time horizons (starting from 30 seconds).

  • Call (Higher): Make a forecast for rising markets
  • Put (Lower): Make a forecast for falling markets

Make a forecast for the future price direction

In this article, I will show you exactly what are Binary Options and how do they work. Knowledge is the key to success. Read about the risk and the opportunities to make money in the following text.

Where to trade Binary Options in 2020?

In the next steps, I will show you how Binary Options (Wikipedia article) work. You will understand it in a few moments. But first of all, where to trade Binary Options?

You will need a Binary Options Broker (see the table below). I searched after the safest companies which give the highest return for traders. There are different companies around the world who provide this financial service. You can open a free demo account. This is an account with virtual money so you can learn how to trade without risk.

First steps:

  • You need a company (broker) which provides the financial service (Binary Options)
  • Open a free demo account with virtual money (Virtual trading without risk)

Best Platform
Highest Yield
Best Support

Broker: Review: Regulation: Yield: Advantages: Open Account:
1. IQ Option (5 / 5)
Read Review
CySEC (EU) 100%+
2. Olymp Trade (4.8 / 5)
Read Review IFC 92%+

Huge diversity
High Yield 92%
Bonus Program 3. Expert Option (4.8 / 5)
Read Review VFSC, FMRRC 90%+

Good Platform
Account Types
Good Education

Is Binary Options Trading safe or not?

Safety is the most important point in online investing. You should choose a good and reliable broker which is safe. I recommend using a regulated company for your investments. Have a look on my full Binary Options Broker Review to find the best one. There are regulated and unregulated companies for trading. It always depends on the broker to trade safely Binary Options.

I did a lot of research and clearly, I can say that a regulated broker does not cheat to its clients. Normally unregulated brokers do not cheat too. But it is not 100% safe because sometimes these are small and unknown companies.

It is safer to trade with a regulated broker than with an unregulated one.

In conclusion, you should use a regulated broker for trade Binary Options safely. It always depends on the Broker if it is safe or not. Do the research by yourself and read my review about the broker on this website.

Example of regulation or license

Safe and well-known regulators are:

What you really need to know about online platforms:

There is a huge diversity of Binary Options Platforms and you have to check out what is your personal favorite. Nowadays developed software is very flexible and available for any device. It is possible to trade with the computer (browser and desktop), smartphone and tablet. That means you can trade from everywhere around the world if you got access to the internet.

Especially for a beginner sometimes it is hard to learn to trade with a new platform. There are a bunch of options which can confuse you. Most brokers will give you education material like video tutorials or step to step guides. Also, you can ask the support for help by phone, chat or email.

A platform for any device

Flexibility and charting are provided by the platform. You can do a personal chart analysis with indicators, technical tools, and different chart types. Sometimes you will get access to economic news directly in the platform. Indicators are known for giving you feedback on the market price at the moment. They are customizable like you want. So it is possible to analyze different timeframes.

Mobile Trading:

Today Mobile Trading is one of the most important factors for trade successfully. It is a great opportunity to boost your profit. In the past traders could not trade online or via mobile phone. So the options were much lower for making a profit. Apps are available for Android and iOS users or any other device. Check out your trading account 24 hours per day via your mobile phone.

Computer Trading:

In my opinion, it is better to use the web-based platform with your computer for analysis. Often there are a lot more functions than in the app. Furthermore, you can see the chart more detailed and a higher range of it. Professional analysis can be made by using a computer.

Binary Trading Tutorial | Step by Step Guide

As a trader, you can choose between a lot of different assets on a Binary Options Platform. You can trade Forex, Stocks, Commodities, Cryptocurrencies and more. This trading tutorial will show you how it exactly works to trade the financial product. The process is always the same as you see in the video and picture below. Just practice it in a free Demo Account.

Learn how to trade successfully

Now you have to imagine and predict the asset price direction for the future (forecast):

You can use the specially programmed trading platform of a Binary Options broker to analyze the charts and get trading ideas. It is very important to have a good working strategy for maximum profit. Beginners should use technical analysis for trading the chart. On the broker platform, you can learn more about it in different education videos/centers.

Therefore every Binary Option expires after a specified time. You can use the time horizon between 30 seconds or 5 months or more. Sometimes it depends on the broker. As you see you can trade short-term or longterm Binary Options.

After you have decided on the direction and the expiry time for your trade you can “sign” the contract with your broker. Just click the call or the put button. On some platforms, you have to confirm the trade.

  • Call (Higher): The price will go up in your expiration time
  • Put (Lower): The price will go down in your expiration time

If you are right in your decision, the broker will pay you a high asset profit of 75-95%. The trade automatically closes after the expiry time. Sometimes the broker allows you to close the trade before the expiry time ends. That is a way to reduce the impact of a wrong decision.

That means if you invest the amount of 100$, you can earn the amount of 195$ on a certain time horizon. 100$ is the return of your investment and 95$ is the profit.

Binary Options Platform Tutorial for beginners

  1. Search for an asset with a high profit. If you trade the assets with the highest yields in conclusion from my experience the result will be much better in the end. Some Binary Brokers offer you different account types with different asset profit.
  2. Analyze the chart on the platform. You can choose different time frames, indicators or financial news for your strategy. Every Binary Broker offers you some educations, too. Learn in webinars, videos or coaching the best strategies of the world.
  3. Now you should select the expiration time of your Binary Option. There a lot of possibilities for your trade. Some traders like it to trade short-term options and some other traders like it to trade longterm options.
  4. Choose an amount you want to invest in your trade. The most time it starts at 1$.
  5. At latest trade the Binary Option with a call or put. There are only 2 options in the market, that’s why it is called “binary”. In the end, you earn a high yield or you lose your selected amount.

What are the conditions Binary Options Trading?

You can trade any asset with Binary Options. It can be stocks, commodities, forex or cryptocurrencies! Most brokers give the option to trade more than 100 different assets. The expiration time depends on your broker. Some companies provide Binary Options with a time horizon of 30 seconds or less. These days you get a lot of different options on every broker.

Conditions:

  • Trade stocks, forex, commodities, cryptocurrencies, and more markets
  • Choose between a diversity of time horizons (short-term – longterm)

Yield – The return of investment can be high as 95%+

As the time horizons, the yield (return of investment and profit) depends on the broker. Often there is a possibility to get a high payout of more than 90% of your investment but there is no rule for the value of the yields. Sometimes short-term trades got the highest payout and sometimes long-term trades got the highest payout. In comparison to my experience, the yield is between 70% and 95% for standard accounts.

Another way to boost the yield is to get a VIP account type. Most of the brokers offer different account types, which are linked to the deposit amount. For example, you will get a VIP account if you deposit more than 3000$ on IQ Option. Not every broker got the offer of account types but you should search for it if you plan to invest a high amount of money.

Are Binary Options risky or not?

Binary Options are risky to trade, but there are advantages why the risk is less than trading other financial products. Especially new traders fear the loss of a high amount of money. With binary trading, you can only lose your bet amount. Traders clearly see what they can lose in a trade. Compared to other trading instruments this is a big advantage because the risk is limited always.

Another advantage is that you get a high asset payoff no matter how much the market moves. The asset price just has to be above or under the entry point. Traders like this financial product because it is so easy to understand and to calculate the risk and the trade profit.

Only invest the money which you can afford to lose in the worst case.

Binary Options Demo Account – Yes or no?

It is very important for beginners and new traders to practice the Binary Options Trading. Most brokers give you a free demo account. It is an account with free virtual money. You can always recharge the account with one click. It is risk-free trading.

Every trader should learn more about the trading platform before he is going to invest real money. Also, you can learn new strategies or try out different methods on the market. First, develop your own strategy with virtual money.

Most brokers offer a free demo account.

Opening your first real account

For trading with real money, you have to fulfill different criteria. On most brokers, you can trade and deposit without verification of your account. In my opinion, every trader should verify his account before deposit money. This can prevent annoying errors and waiting times. For a full verification, you need to complete the account setup.

Sign in with your real personal data. That includes full name, birthday, real address, email, and your phone number. After that, sometimes you have to upload the required documents for the broker. The company checks if you are a real person. Upload a picture/copy of your Passport. Sometimes they require a utility bill too. In most cases, the verification only takes 24 hours or less. With some companies, you do not need this verification process.

How much money do I need for Binary Options Trading?

You can start trading with a very low amount of money. Especially on IQ Option, you can open a live account with a 10$ deposit. The minimum trade amount is 1$. The upper limit is open for your trades. Have a look at my reviews to find a broker which fulfill your requirements

From my experiences as a trader, it is possible to make a huge amount of money with the right strategy. Binary Options are the tool for trading with a small or big amount of money.

Facts about the deposit:

  • Start with only 10$ in your account
  • Trade with 1$ per trade
  • You can easily trade with high amounts too
  • The minimum deposit depends on the Binary Options Broker

Easy deposit and withdrawal

As mentioned before the deposit is easy as the withdrawal of profits. On most brokers, there are not any fees for deposit and withdrawal money. For payments, you can use more than 20 different methods. It is possible to capitalize on the trading account in a few seconds. In most cases the payout takes the time of 24 hours depends on your broker.

Payment methods are depending on the broker:

  • Bankwire
  • Credit Cards (Master/VISA)
  • Cryptocurrencies
  • E-Wallets: Skrill, Neteller, FasaPay, ePayments, Yandex, and more

Get a free Bonus for your deposit

The most brokers offer a free bonus for your deposit or risk-free trades. The bonus amount depends on the deposit amount. It can be a 20%,30%,50% or 100% bonus. In other words, they give you a higher bonus for a higher deposit. Furthermore, some brokers allow trading risk-free trades. If you lose a trade, the broker pays back the lost money in the form of a bonus.

The bonus is not completely free. Sometimes traders have to trade a high turnover of the bonus. For example, make a turnover of 30x of the bonus to get the bonus withdrawn. If you are not satisfied with the conditions in most cases you can deactivate the bonus. A bonus is a good opportunity to grow a bigger account and trade with more money.

Get a free bonus now

Can you really make money with trading Binary Options?

The key to your success is to get a good education and find a professional strategy. In addition, you have to control the risk with sensible money management. In this article, I showed you an insight into profitable trading with Binary Options.

It is easy to make money with Binary Options but you have to be prepared. The markets are not easy to trade for beginners and it takes time to trade profitably. You will not see success directly. From my experience educated traders do not blow up the account. They earn money constantly. Read through my other pages to get deeper knowledge.

  • Education: This is the most important point for beginners. You should be prepared for the markets and know how the financial product works. There are different tutorials on the broker webpage or on my website to learn the functions. In addition, it should be easy for you to use the trading platform of your broker. Just practice in the demo account until you feel comfortable. Moreover, most brokers offer deeper knowledge. There are webinars, coachings, and tutorials. Education and knowledge is the key to making money with Binary Options.
  • Strategy: Develop or learn a professional strategy for trading. You have to know what you are doing in the market. It is like a system for you which always have to repeat. Without a proper strategy, you will blow up your account. There are different ways to learn a strategy. Use the knowledge of a broker or my website.
  • Money Management: most traders fail to control the risk. In my opinion, money management should be sensitive by using 0,5 – 3% of the account balance per trade. Sometime a losing streak will occur. By using sensitive money management you can trade without emotions and you can trade enough trades without running out of money.

In conclusion, you can really make money with trading Binary Options but you have to learn and invest your time in the right knowledge. The demo account is the best way to practice before you start investing real money.

Are Binary Options legit or not? – My scam review

In my opinion, Binary Options are not a scam for your money. The financial product gives you the possibility to invest in short or longterm opportunities in the market. Binary Options are so popular because they are so easy to understand and you can make a lot of money in a short time.

It is very important to choose a good broker. Some small brokers are scamming users, that’s why a lot of people think Binary Options are a scam. Definitely, it is not a scam if you trade with a safe company.

Basic trading checklist for beginners:

  • Choose an asset you want
  • Forecast the price movement
  • Choose a variable expiry time of the trade
  • Bet an amount starting 1$
  • Trade a call (long) or a put (short) option
  • Get profit
  • Payout the profit

On this site, I have shown you how the financial product is working. I think you can easily understand it now and start trading with more security. On my other sites, you can learn more about Binary Options. Happy trading.

How to avoid scams as beginner

The problem of Binary Options is that they are not a scam, but some brokers or financial educators are scammers. Every time before you start investing real money you should do a sort of research. You should pay attention to real reviews or advice from professional traders.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Sign-up Bonus:

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

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Best Binary Options Trading Guide For Beginners
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