Thousands of new traders enter the binary options marketplace each and every day. The appeal of this type of trading is quite clear, with the ease of trading and high returns topping the list of benefits. Each trade requires only a few simple steps. Once these are known, active trading can begin immediately. In fact, most traders begin to trade within an hour once they have selected a broker and setup their account.
Asset selection should always be the first step. Most binary options platforms provide traders with quite a large variety of currency pairs, stocks, commodities, and indices. There is never any obligation to trade within a specific asset class, or to select any specific asset. Traders will be able to make their own decisions, which means that preferred assets can be traded with as often as a trader wishes.
The next selection should be that of the type of trade. Basic binary options ask only that the trader decide which direction the price of their chosen asset will move in next, up or down. Long Term and 60 Seconds require the same thing, with the only difference being their longer and shorter expiry times. Boundary and Range trades require an estimation of whether or not the asset price will remain within two set levels while the trade is open.
Additional trade types include One Touch. With this trade, the objective is to determine whether the asset price will be able to reach a set level, or target price while the trade is open. There are also Pairs trades. These pit two assets against each other, with the objective being to decide which of the two is going to perform better than the other. Standard Forex trades are now showing up in some binary options platforms as well. When offered, these will be the only trade type that is not bound by an expiry time.
Every trade will have an expiry time. This is the total amount of time that the trade will remain live, or open. The actual position of the asset price at the time the expiry ends will determine whether or not a profit has been earned. Over the past few years, binary options brokers have begun to increase the number of expiry times that they offer. Within a solid platform, traders should be able to select from an expiry lasting only a few seconds to an expiry lasting months or even a year.
There is no doubt that some losses will occur, but beginner level traders need to remain mindful of the fact that they only need to win the majority of their trades in order for profit to be earned. This is not an extremely difficult task so long as trade selection is well thought out and market analysis is performed. Many binary options traders submit their initial deposit and never look back, continually building their profits from day one. This is a realistic goal for all who are serious about using this financial instrument to increase their income.