Among the many ways to make money online, one of the most interesting is binary options trading. It’s simple, profitable, and most importantly — available with any education and financial capabilities. If you still do not know what option trading is and how much money it brings, we will answer these questions in simple words, and also give some recommendations for the most productive start of trading.
1. Binary options — how it works
As a separate type of exchange contracts, binary options appeared almost 10 years ago on the exchanges, allowing you to profit from fluctuations in the price of various assets (securities, stock indices, precious metals, oil, currencies). The trader does not need to physically acquire this asset, but should only place a bet on the direction of its price movement — UP or DOWN in the selected time horizon.
For example, if a trader bets 100 USD on the fact that in 5 minutes the value of the EURUSD currency pair will increase, and his forecast came true, he receives up to 90% of the income from the invested amount, that is, $90. If the forecast turned out to be wrong, and after the specified time the price of the underlying asset has decreased, then the trader loses the entire invested amount.
Despite such a simple format of work, binary options should be treated as a serious financial instrument and trading should not be taken as a game of chance.
2. Where does the trading process take place
The uncomplicated principle of this tool allows trading in the simplest format. If you want to become a binary options trader, you need to register with a reliable brokerage company and open a trading account there with a certain amount of funds. For example, through Binomo.
After that, you will get access to the trading platform, where quotes of various assets are broadcast on the chart and a manual is provided for performing trading operations. It is worth noting here that the process of registering and opening an account with a brokerage company takes several minutes, since for registration you need to fill out a short questionnaire, and to open an account — transfer the desired amount of funds by instant transfer via an electronic payment system.
You should open an account only with licensed brokerage companies, as this will guarantee that the company operates legally on the market and will not disappear with your money in a few days. Often, information about the availability of a certificate (for example, the financial regulator CROFR) can be seen on the main page of the broker’s website:
3. How to make money on trading
The format of using this tool is really very simple, but this does not mean that you need to guess the maneuvers of quotes — in this case, no one would really be able to earn money. The whole «trick» is that for forecasting a trader can use various trading strategies, with which you can get 50% -95% of profitable trades.
A trading strategy is a set of actions aimed at finding known patterns of price fluctuations in the market, the appearance of which informs about further developments. There are also strategies using technical indicators that can independently determine various price patterns on the chart and report them in the form of trading signals. For example, by applying the Moving Average (lines 3 and 10) and MACD indicators to the quotes chart, you can determine the future turn of the market with a high probability and make a deal in time with a correct forecast of the future quotes movement:
To get started, we advise you to study a set of simple and profitable strategies and read the article on how to make money on binary options.
For trading, you should choose only advanced trading platforms that are equipped with a large multifunctional quote chart and various tools for market analysis (technical indicators, graphical tools). For example, in this article, to display the principle of using the strategy, we have chosen just such a platform — from the broker Binomo.
4. How much can you earn
Binary options have, in fact, unlimited potential in terms of earnings, but it all depends on the amount of starting capital — the larger it is, the larger you can make trading bets and the more profit you get.
In trading, be sure to follow the rules of money management on binary options, according to which the maximum transaction amount should not exceed 5% of the total deposit amount. If you have a small amount to trade, then the size of the transaction should be as small as possible. For example, at Binomo, you can make deals from $1, which is optimal for safe trading with a small deposit.