What is the Binary Option and How Does It Work?

A binary option is a type of option that allows you to invest for and against two currencies. So when you bet on a foreign currency, you bet on its value in comparison with the value of another currency. The operation of the binary options is the same as the classic options.

Trading binary options

In the world of online trading, there is an impressive rise in the trading of binary options.

This includes three major elements:

The asset:It is a currency pair for example

The binary option contract prediction

If you have some experience in Forex Basics, you will have no trouble trading binary options after consulting our method explained below. If not, take the time to read our complete beginner’s guide and you will be able to get started.

Binary option trading method

The Trader-Online team unveils the method for trading binary options. The principle unfolds in 5 main stages:

Choice of Underlying Asset (or Asset): Binary-oriented brokers / brokers offer just about all the same assets that are current currency pairs, commodities, shares of large multinational corporations or indices. As a first step we advise you to choose a currency pair such as EUR / USD.

Choosing the Option Contract: This involves determining the life of your option. We suggest you take contracts of about two hours.

Choice of management: You must plan the direction, ie the trend, that your assets will take when the contract is completed. Do not hesitate to use extensively financial analysis (sometimes video) of your broker.

Choice of the option to buy among 3 major types:

The “Digital” or “High / Low” options are by far the most popular: probably because they are the easiest for beginners to use. Simply determine whether your asset rate will go up or down in relation to the price at which the asset can be purchased (strike price). Note that there is the possibility with our partner brokers to extend the life of an Extend contract or to cancel a contract before it expires. If you are still interested about this then you can study more from https://fraudbroker.com/review/easy-markets/now.

The “Touch” options are very close to the principle of Forex: the trader must determine whether the asset will reach a fixed exercise price at any time before expiry.

The “Range” options are for the trader to determine if the selected asset will be in a certain range at the end of the contract.

Choice of the amount of the trade: to you to determine, according to your possibilities and your expertise, the amount which you want to invest on this option and thus to open the trade. Do not take too much risk from the start. Never forget that you expose yourself to significant losses if your predictions are false. “Make your hand” with reasonable amounts and learn from your mistakes to refine your future analysis.

Comparative Binary Options

Keep in mind that most platforms have demo versions to compare binary options, they allow you to train safely without becoming familiar with the analysis and placement tools.

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