There are a number of options that traders can use when entering Forex trading. One such method is binary options trading. Learning how to trade using this method, especially for beginners in Forex trading, is a great step to ensure that the business is profitable for them. The purpose of this article is to teach beginners in Forex how to trade using binary options, sometimes referred to as digital trading options.
What is binary options trading?
Before learning how to trade using this method, it is important to understand what this method of Forex trading means. Binary options trading, unlike traditional Forex trading options, involves a trader taking a “yes” or “no” position on the price of a financial asset. The method is direct or nothing with a fixed reward and a fixed risk, ie the end result (yes or no position). The different types of binary options include row options, touch or touch options, call counter options, and double touch options.
Key Elements Understanding the key items in this trading method is the first step to understanding how to trade using this method. Regardless of the type of binary option, there are three main elements that any Forex trader should consider. The items are the holiday price, payment offer and expiration date. The strike price refers to the current price of the asset at the time the trader enters trading. The strike price is the price used to determine whether a trader has won or lost.
On the other hand, a payment offer is the amount offered by a binary options broker to a trader and is known before the trader starts taking risks to make money. The expiration date refers to the period from the date of purchase of the option to the date of conclusion of the contract (varies from 60 seconds to one month). How to trade From a trader’s point of view, a digital trading option works by predicting that the price of a particular asset, whether commodity, currency or any other asset, will increase or decrease by a certain amount. time. In other words, the trader invests in this forecast.
The minimum trading money that a trader risks can be up to $ 10. From the beginning, the trader is shown the amount of money he will earn if the forecast is correct. The trader will pay for losing the trade using risky money. That is, if the trader’s prediction is wrong, he will lose the money he bet and risk. On the other hand, if the trader’s prediction is correct, he will receive a return on the money and the range he has risked, generally between 70% and 85%. An example of how to trade Suppose the current price of gold is $ 1,890.50, and a trader estimates that the price of gold will fall in two hours. The payout offer is 70% and the trader bets $ 100 on the forecast. Two hours later, the contract expires and the price of gold drops to 1890.25. This means that the trader makes the right prediction. Thus, a trader will earn $ 70, which is $ 170 and $ 70, regardless of the magnitude of the price change. How to trade binary options for greater profitability A combination of polished technique and an invincible strategy is essential for someone to trade successfully and make a large profit.
Some binary options trading strategies use price analysis in decision making, risk management such as bank management, and technical analysis such as reading candlestick charts. How to trade binary options safely There are significant risks associated with this method. This is because you will pay for losing trades through trading money. As a rule, you should never invest more money in a broker that you will never be able to lose.