Welcome To Binary Trading
For many, binary options is more than just an exciting fad hitting the web, it’s a way to make an income or a second income. Done right, binary options trading can be very rewarding. Most binary brokers pitch their offering at absolute beginners, and while it is essentially very simple to grasp for anyone, here’s the kicker, the more you learn, the better your outcome will be. Binary options have opened up the gateway to trading so that literally anyone can get involved. With the right broker to partner up and with a growing knowledge base perhaps you can take a trading advantage over the markets.
This website is your objective guide on how, what, when, and who to trade with. You’ll find educational articles, videos and objective broker reviews. We wish you a successful trading journey!
What are Binary Options?
Have you come across binary options on the internet yet? It’s likely that you have at some point. The reason that Binary options are such a popular online trading type is that they are extremely simple to understand. A person with no prior knowledge can literally sign up for a new broker account and begin trading within a matter of a few minutes.
Here’s how it works. In short, a binary trade is where you have to decide if the price of an asset like Google stock or Gold will go up or down by the expiry time. Expiry times can range from just 30seconds right up to a year. If you think the price of the asset will go up by the expiry you will simply press UP or PUT on your trading platform, if you think the price will go down though, you’ll press DOWN or CALL. Simple so far? In honesty, it doesn’t get much more complicated than that.
There are alternative options contracts though like:
One Touch/ No Touch
Where you select if the asset price will touch a certain strike price by expiry or not.
Where you need to predict if the asset price will stay within a certain range by the expiry or whether it will move outside of that range.
Exactly the same as the classic binary trading type, except with contracts that close after just 30 seconds or 60 seconds.
Again works the same as the classic options, just with an extended time period. The contract can end after a month, or six months.
Some brokers platforms give you the chance to extend the option further if it doesn’t look like its going your way, or even to close it early, if it looks like your doing well. These come for a small premium.
Why Binary Options over other trading types?
- A lot of people favor binaries because of their simplicity, even beginners can grasp how to trade almost immediately.
- Unlike with Forex trading, you can’t get into a negative account balance. You can only trade with capital that is sitting inside your account.
- Unlike other trading types, you know the risk and reward you face even before you make a trade. Every option contract specifies the payout you stand to receive, eg, 80% payout means if you trade correctly, you will get back your original investment plus an extra 80% profit on top.
- With some brokers, you’ll see up to a 90% yield. Which other areas of the financial markets can you see such a high return on your investment?
- Binary options are also more affordable than say, stock trading. With stock trading, you will actually need to purchase the stock. With Apple stock currently at around $145 you might not be able to afford too many! With binary options you never actually own the stock, instead, you are speculating on the price movement.
Pros and cons of trading binary options
- Simple to learn, quick to grasp and fun to trade
- Risk and reward known upfront
- Not expensive to trade as you aren’t buying the underlying assets
- High reward payouts – sometimes up to 90% per trade
- Often bonuses and promotions offered on your deposits
- No worrying about when to close the options, they close automatically!
- Trading tools and education provided by brokers to help you master it.
- High rewards also mean high risks
- Some scam brokers permeating the industry – learn more below
- Odds are always in the brokers favour
Binary Options Regulations
As you’ll come to learn as a regular visitor at BinartyTrader.org, working with a regulated broker is one of the most important decisions you’ll ever have to make as a trader. A regulated broker must comply with the local regulatory authority to provide a service that is fair, transparent and one which protects your interests in every eventuality. Many regulatory licenses come with a level of trader compensation, which protects your deposits up to a certain level, should the broker become insolvent or expose himself to more risk than he can handle.
“Different jurisdictions are monitored and authorized by different regulatory bodies. If for instance you are a U.S. based trader you will be required to trade only with a U.S. licensed operator. As a trader that works with a European licensed broker you will have the option to trade with brokers from any other member state, where EU licensed brokers may passport their services.”
The main regulators you’ll come across again and again are the FCA in the UK, ASIC in Australia and CySEC in Cyprus.
While it is recommended to trade with a regulated broker, that’s not to say that non-regulated brokers are all scams. Not at all, but it does mean that your best interests are not protected and you will find it very hard to lodge a complaint. Additionally there will be no one to turn to should the broker not be forthcoming in processing your withdrawals.
If you are trying to decide between a regulated and non-regulated broker, we would always say go regulated. If however you like the facilities and service of a non-regulated broker you can start by depositing a low amount to test out their product and service first.
Recommended Forex Brokers
Binary Options Scams
With trading platforms becoming more easily available over the internet, it has now become harder than ever to tell a legitimate brokerage from a scammer.
What is a scam and how can I identify it?
The most important thing to thing to do before putting your money into binary options is to know the most attributes that tell it apart from a scam. Here’s our top tips for spotting a scammer.
- A scam or the ‘facilitator’ of the scam will not provide proof of regulation by any authority in the country where it operates. Trading binary options is illegal in quite a number of countries therefore it is important to first find out the policies around the country you wish to trade from.
- The scammer will promise unrealistic returns and will in most cases assure you that you will make these returns within a ridiculously short amount of time; and of course with very little effort on the ‘investors’ part.
- Scammers will often ask for upfront payment of unnecessary fees and sometimes even go as far as asking for private financial information. So it is also important to know where to draw the line between a broker requesting for KYC (know you customer) information and phishing which could ultimately result in identity theft.
What can you do to avoid scams?
As an investor, it is important to do a great deal of due diligence to avoid blindly exposing yourself to unnecessary risk. Everyone seems to be looking for a quick fix solution out of the rat race and this makes for a more gullible audience ready to sell a kidney for a taste of financial freedom. A lot of seasoned investors encourage that you look at every investment opportunity with a hint of cynicism so that nothing sneaks under your nose without scrutiny. Desperation coupled with too much optimism and high expectations makes one subjective and you can be sure that scammers can smell these qualities from a mile away!
Also keep in mind that trading binary options is anything but easy. It requires the investor to collect a huge amount of information before deciding where to put their money in the hopes that the market will head in a certain direction. If you are doubtful of the broker’s credentials, do not hesitate to request for proof of a license from the regulator in that particular country.
How can I identify a good broker?
With more websites collecting personal information through subscriptions, internet users are now leaving their digital footprints all over the web therefore making it easy for brokers to use cold calling/emailing to acquire new clients. A good broker can easily be identified from the initial steps of engagement.
“Accredited brokers will take the time to explain the concept of trading binary options to the client without promising to over-deliver or downplay the risk involved. In an attempt to win over clients, most brokers will often use past data to indicate their success. This data may be stolen therefore misrepresenting the history of that company. A good number of these risks can be mitigated by requesting for authentic proof. “
A lot of brokers will also use a trading bonus as bait and attach it to an unrealistic goal such that it would be virtually impossible for a novice or even an intermediate trader to achieve the goal. Stay clear of brokers who insist on forcing you to accept trading robots until you can fully conceptualize how the various markets work and the whole binary trading process, including factors that affect the markets. You can also perform a background check on different brokerages by visiting online forums. Often you will find that some brokers are consistently blacklisted across numerous websites. With this information, it is easy to stay away from scams and protect your hard-earned investment.
Some quick tips on finding a good broker
- Regulation, regulation, regulation – can’t be said enough!
- Good trading conditions, low initial deposit, low per trade minimum, high payout of around 90%
- Someone available to talk to throughout trading hour
- If the broker tries to push you into depositing more money, steer clear
- A company that lets you withdraw funds whenever you want
- Proprietary trading platform built especially for that broker – a very good sign
Binary options making the news
Binary options are becoming celebrities in their own right, and often not for the right reason. You’ll hear stories of scam brokers that simply refuse to give traders their money back. You’ll hear other stories about people losing their entire life savings. That’s simple to remedy, never trade more than you can afford in the first place and fully expect to lose your capital. That way if and when you start seeing profits it will come as a nice surprise and not the other way round. Trading in the financial markets always comes with a level of risk. But like all things, with enough practice and work you can master the art.
“So how do people view binary trading? That really depends on who you’re talking to. Some call it gambling and others say its skilled trading. It can be both. When you simply guess on UP or DOWN, this is a pure gamble. When you start incorporating trading strategies, like analyzing price charts, implementing trend lines and trading news events, suddenly you’ll come to understand where the skill is involved.”
You’ll find many review and scam websites talking about different brokers. In fact most brokers, whether good or bad will have a scam review somewhere on the internet. Don’t believe everything you read as some scam review websites are scams themselves, set out to destroy brokers who wont pay them money in advertising! Additionally bad reviews and good reviews can be created to suit the publisher’s interest. When you see a broker with awards its worth considering that actually the awards are often bought in exchange for advertising. It’s hard to find a good broker based on what you find on the internet. That’s why you can consider a site like BinaryTrading.org your friend in the Wild West of the internet.
In order to decide for yourself, you will be required to conduct due diligence to the variety of brokers available. This can be time consuming though which is why we have conducted all the research for you as you will discover in our recommended broker table above. If you also want to do some research yourself, here are the factors you should look out for:
- Trading conditions
- Account types
- Customer support
- Platform usability
In order to “try before you buy” there are currently a handful of brokers offering demo accounts. Well worth trying a demo to both test out the broker and also to test out your own trading strategies.