How To Trade Binary Options Successfully

Transcription

How to Trade Binary Options SuccessfullyA Complete Guide to Binary Options TradingBy Meir LirazRevealed At Last! The Best Kept Secret Among Successful Binary Options andForex TradersThe Easiest Way to Make Money Trading OnlinePublished byBizMove Binary Options Trading CenterCopyright Meir Liraz. All Rights Reserved.Our Preferred Binary Options BrokerWe currently trade at this broker. After testing several Binary Options andForex platforms we find this one to be the best. What made the difference isa unique feature that allow us to watch and copy the strategies and trades ofthe best performing traders on the platform. You can actually see each movethe "Guru" traders make. This method works nicely for us. Since we startedtrading at this broker we noticed an increase of our successful trades andprofits when compared to our former brokers.Having said that, please note that all trading involves risk. Only risk capital you'reprepared to lose. Past performance does not guarantee future results. This post is foreducational purposes and should not be considered as investment advice.

Table of Contents1. The Single Most Critical Factor to Binary Options Trading Success2. What are Binary Options3. The Flow of Decisions in a Binary Options Trade4. Advantages and Disadvantages of Binary Options Trading5. Binary Trading Risk Management6. What You Need to Succeed in Binary Options7. How Much Money You Need to Start Trading8. Technical Analysis As a Tool for Binary Trading Success9. Developing a Binary Options Strategy and Entry Signals10. A Few Trading Tips for Dessert

1. The Single Most Critical Factor to Binary Options Trading SuccessMay I suggest that prior to reading this book you make yourself familiar with the lookand feel of a real life Binary Options trading platform, this will help you to betterunderstand the guidelines and concepts described here. You can simply register to anonline broker; it is free and without any obligation on your part. Which broker?. This isthe broker that we trade at, we chose it based on an extensive research and find it to beone of the best out there. I suggest you first tour its features and flip through the trainingresources in its extensive education center and just then commence with reading thisbook.Now, there is one critical issue regarding Binary Options that I want to address right atthe beginning of this guide and that is broker scam. In my opinion, the single mostcritical factor to your Binary Options trading success is that you trade with a honest andreliable broker. Why? Because once you fall into the hands of a scamming broker, nomatter how effective your strategies are, you are bound to lose all your money.Now, the word must be said - Binary Options are a legitimate and a viable financialinstrument and most binary options brokers are honest and reliable - however, there area few bad apples out there that give others a bad name.So how can you avoid falling prey to a scammer? here are some ideas to help you withthis.For starter you can choose a broker from a list of safe brokers. Such a list can be foundat the BizMove Binary Options Information Center (http://www.bizmove.com/binaryoptions-trading/), you can also find it by running a Google search for 'BizMove binaryoptions'. The brokers on this list were checked and confirmed to be honest and trusted.What if you want to trade with a broker that is not on the safe list? Here is a simplestrategy that will help you choose a good broker. Once you decided to trade with a newbroker, start small and watch for any irregularities in the behavior of his trading platform(see below). Trade with small amounts of money, test the waters first, once everythingfeels OK and you are more confident with the broker, proceed with your planed amountsand strategy.Now, How can you spot a scamming broker? I'm going to reveal to you now how abinary options scam works - once you know how it works it will be easy for you toidentify it when it is being tried on you.In a typical scam the broker manipulate the movements of the underlying asset, usuallyupon the expiry time, in a way that the outcome will be in favor of the broker. For

example, If the binary option is supposed to expire at, say, 11h30 and at that time it is"in the money", the option is manipulated to remain open until, say, 11h31, and that lastminute may be just enough for your option to expire 'out of the money'.According to one of the traders that was a victim to a scam, the broker has a systemwhere you place a trade and a clock begins to count down to the expiration, when theclock ticks to zero you should be awarded a win or suffer a loss - until here this is astandard binary options trade, but listen what happens next. After the clock ticks to zero,you see this, "Expiring." for at least another 30 to 60 seconds. During that time, if yourtrade was close, the stock move just enough for you to lose your money.The scammer uses a trading platform where the trader has no way of having an exacttime for the trade to expire because the clock goes to zero, but the broker keeps it openuntil it moves to where they get the investor's money.Since this particular broker features the Reuters logo on its site, one of the complaininginvestors has been spoken with Reuters who has informed him that they are looking atopening a case against the scamming broker as he is a risk of being fraudulent and isusing the Reuters name to big himself up.Another complaining investor stated regarding this system of scam: ". I noticed that theweb site used to track my trades was having issues with the trades actually expiring 30to 60 seconds after the time had run out to zero. During this extra expiry time is whenthe strike amounts would move and I would not be awarded my winnings if they movedjust enough for me to lose. Then the site started slowing and freezing so that I could notsee my trades, track anything, or see information regarding possible trades."In addition to observing the expiry time behavior of the brokers' trading platform youshould also examine the behavior of the broker's asset's price movements during thecontracts' time frame. You want to make sure the broker's chart follows the marketaccurately. You do this by comparing the broker's chart movements to a real-time chartof the same asset.Now you know what to look for and how to identify a broker that uses scam techniques.On a final note - there is one misconception about how binary options brokers makemoney that needs to be cleared. Some traders voiced concerns that they are trading“against the house” thus the brokers have an incentive to alter the data towardsfavorable outcomes for the broker. Well, this is not the case, a honest broker will derivehis income from the difference between the total sum he pays to winning trades and thetotal sum that he gets from the losing trades.

Let's look at an example - this is simplified to make the point. Say there are only 2trades, same asset, same time, same expiry time. One trader chooses 'Put' the otherchooses 'Call'. Now the broker is indifferent as to what will be the outcome of the tradeand which of the two traders win the trade, the broker's profit will come from thedifference between what he gets from the loser and what he pays the winner.You see, binary options brokers have a viable business model that is not dependant onthe outcome of the trades. That's not to say that there are not a few dishonest brokersthat are willing to defraud their customers for a dubious short term gain that willeventually cost them their business.

2. What are Binary OptionsThe purpose of this guide is to show you how to make money trading Binary Options. Inthe first several chapters we will deal with the in and outs of binary options while later onwe will go into the strategies needed to achieve success in trading binaries.So what are Binary Options (also referred to as 'digital options', 'fixed return options'and 'all-or-nothing options')?A binary option is In fact a prediction of which direction the price of the underlying asset(a stock, commodity, index or currency) will move by a specified expiration time. WithBinary Options, an investor doesn't purchase the asset - he is merely predicting thedirection that the underlying asset moves. There are actually just two possibleoutcomes. A fixed gain if the option expires “in the money”, or a fixed loss if the optionexpires “out of the money.” The price of the asset is not important. The only thing that ismatter is whether the prediction is correct or incorrect.A binary options trade usably involved three steps:First, you choose a trade expiration time, this is the time you want the trade to end. Itcould be any time period between a minute and a week - usably it is within the day.Second, you choose Call or Put. If you think the price will end up above the currentprice: you click the buy/call button. If you think the price will end up below the currentprice: click the sell/put button.Now that the trade is placed, you simply wait for the outcome. If the trade expires 'in themoney', you make a profit. If it expires 'out of the money' , you'll lose.Now you can see where the "binary" comes from, it stresses the fact that there are twopossible outcomes to a binary option, both of which are set and understood by theinvestor prior to placing a trade.Now here is an example:You purchase a Google binary option for 25, with the opinion that within 2 hoursGoogle's shares will be higher than they currently stand. If you are correct you get apreviously set percentage return on your investment (e.g. 82%), should the shares golower you lose your investment (some brokers will give you back a small amount as a"refund").A number of factors distinguish binary options from regular stock options.

Typically the short-run expiration time suggests traders could make an immediate profiton the binary options and therefore are way more versatile in their option investments.In regular stock options, a trader will pay per contract. Therefore the investor may profitor lose a sum based on the quantity of points difference between the expiration leveland the strike price. In contrast to binary options in which the two outcomes are actuallyset from the beginning.An investor in a binary option needs to hold onto his option until the expiry date. Hemust consequently take more care when ever buying his options as he is unable to sellthem after they are purchased.Binary options are categorized as exotic options, however, inside financial markets theysometimes are termed as digital options. While digital options are quite simple tounderstand and easily traded, the mathematics behind the pricing is complex. It isbecause of this that digital options are referred to as exotic options.For years Binary Options were traded by large institutions and their clients in the overthe counter market (OTC). In 2008, the Securities and Exchange Commission in the USapproved the listing of binary options with continuous quotations and now binary optionsare also available to individual investors.Most binary options tracings nowadays are performed online thru private brokers thatuse sophisticated trading platforms.

3. The Flow of Decisions in a Binary Options TradeA Binary Options trade calls for several decisions to be taken by the investor.Deciding on the Underlying AssetThe first decision is choosing an asset. Based on which broker you decide on, you willhave a selection of assets from different financial markets. Some traders elect to focuson one particular asset, or one market, while others trade several optionssimultaneously. One consideration as to what asset to trade has to do with the openinghours of the various world stock exchanges. Currencies are usably available for trade24 hours a day.Most brokers offers four classes of assets:Commodities - e.g.: Gold, Silver, Wheat, Coffee, Oil, Sugar, Platinum.Stocks - e.g.: City (US), Apple (US), Gazprom (Russia), BP (British Petroleum), Google(US), SberBank (Russia), Coca Cola(US).Forex (Currencies) - e.g.: GBP/USD, USD/JPY, USD/CAD, EUR/JPY, EUR/GBP,USD/TRY, USD/BRLIndices (Indexes): - e.g.: DOW (US), S&P 500 (US), NASDAQ (US), DAX (Germany),CAC (France), FTSE 100 (U.K).Deciding On an Amount to InvestBinary options brokers allow for a low minimum so you can be flexible as to theamounts you can invest. The amounts you devote to trade should be dictated by yourrisk management plan (more on this when we talk about risk management later on).Deciding On the Desired Time FrameBinary options are short term investment instruments by definition. the time frameavailable can run from one minute to a week, depending on the trading platform.So what time frame should you choose? The problem with selecting very smalltimeframes like one minute, or 5 minutes is that you could possibly experience a lot of“noise” which is a result of hedge funds activity, scalpers and automated trading. Youcould think that you observe an emerging trend only to realize that it was only a briefmanipulated move and that the trend is over once you enter the market. Therefore Isuggest you use at list a 15 minute time frame. This is small enough for you to capturethe nice moves, but it‟s big enough to eliminate the noise in the market and correctlydisplays the “true trends.”

While preparing a trading strategy (we will cover this in a later chapter), it is best toexperiment with various timeframes. A trading strategy that doesn‟t work on a smalltimeframe might work on a larger timeframe and vice versa. Start developing yourtrading strategy using 15 minute timeframes, and if you‟re unhappy with the resultssimply experiment with other timeframes.Deciding on the Type of TradeBinary Options Trading Platforms allow for several trading types:Above / BelowAbove / Below is the most popular type of binary options trade, most traders will use thistype the majority of the time. Above/Below options expire in-the-money when

The purpose of this guide is to show you how to make money trading Binary Options. In the first several chapters we will deal with the in and outs of binary options while later on we will go into the strategies needed to achieve success in trading binaries. So what are Binary Options (also referred to as 'digital options', 'fixed return options'