How To Trade Binary Options: A Brief Guide

Binary options are extremely profitable trading instruments that can help you multiply your deposits in almost no time if used properly. However, high profitability comes with high risks, so you should really be careful when trading these derivatives: make sure you understand at least the basic information on how they work before you start looking for a broker. To help you build that understanding, we’ve made this short guide with everything you need to know about binary options and main aspects of trading.

What are binary options

Binary options are derivative financial instruments: they are based on the price of a certain real asset, and the outcome of every trade depends on how this price behaves. Basically, you make a prediction about whether the price will be higher or lower than a specific level at a defined moment of time in the future and stake some money on it. If you’re right, you get your money back and a special reward that can be quite high at times. If you’re wrong, you lose your money. That’s it, there are just two outcomes for every trade, and that’s why these options are called binary.

How to start trading

This absence of any middle ground is a crucial aspect of trading binary options that makes it relatively risky, so you need to learn several basic things before you actually enter the market. First of all, make sure you understand how buying and selling binary options work. Then, choose an asset and learn as much as you can about it: after all, your success here depends directly on how well you can predict all the price movements, so you must really know your fundamentals. Finally, it’s very important to find a reliable broker that supports such derivatives: some of them even have useful training programs about how to trade binary options and manage associated risks. Let’s check out a couple of them.

IQOption

Founded in 2013, this company is one of the most popular brokers with binary options support. There are also many CFDs to choose from, and the platform is designed to be especially novice-friendly, so it can be a great starting point. However, the broker lacks its own educational materials on technical analysis, so you will have to find them elsewhere.

VideForex

VideForex is another pretty popular broker for beginners on the binary options market. It features a lot of different instruments, passive income options, and quick withdrawals. The broker also has welcome bonuses for new users that depend on the size of your deposit.