Investing in binary options
What is binary options?
In today's world, trading refers to dealing in the international financial markets; literally, the term "trading" means buying or selling any kind of commodity. In other words, trading is the conduct of any financial manipulation for the purpose of increasing capital or saving money.
This type of earning is also equivalent to owning your own business. Everything depends on the ability, skills and level of knowledge which in its turn depends on the ambition to reach the goals. By treating trading as your own business, you can be very successful.
Binary options trading is an extremely popular form of online commerce. Essentially it is a case of determining, with great accuracy, whether an asset will move in one direction or another over a set period of time. A successful forecast, in this case, provides the trader with the return of the invested sum and, accordingly, the proceeds. An unsuccessful forecast, accordingly, entails the loss of the investment. During trading, the software platform displays the profit that the trader can make.
Online binary options can allow you to make money easily without putting up much capital.
What is the binary options market?
It is generally accepted that investing in binary options is one of the easiest ways to make money in the stock market, as it involves trading with a short-term outlook and high profits. It is no wonder that such operations are so popular among traders around the world.
In order to start earning on options, it is necessary to determine the asset on which the forecasts will be made. Predictions can be made for various indices, securities, commodities, currency pairs and others. At some exchanges, even a bet can be made on weather forecasts.
You have to know very well what factors influence the price formation for the selected instrument in order to make a correct forecast and to find yourself in the position with profit and not in a loss at the moment of expiration.
What is a binary options broker?
The importance of options has increased considerably and the number of trades has increased after reputable brokers entered the market. It is very important to do your research before you entrust your money to a broker, so as not to fall for scammers.
A binary options broker is a company which mediates between the trader and the market by providing a web platform through which the broker's clients can execute trades.
A good trading software will offer you not only a trading room but also the related functions, which will help you in your commerce. These are especially the real time quotes, the possibility of learning on the platform, the analytical section, live chats and so on.
What is a binary options trader?
When you wonder how to become a trader from the scratch and earn money on it, you must first find out who is a binary options trader and what he/she does. So, a trader is a direct participant of the financial market, who makes deals with buying and selling assets in order to make profit. In simple words, a person who speculates on price changes on the market.
The profitability of the trader - a stock market player, depends almost entirely on his activity, which is derived from his level of skill, the analytical services used and the amount of capital, which is under operational control.
Simply put, a trader's main task is to analyse the general market picture and open binary options contracts based on the results.
What is binary options trading?
To get a better idea of what is trading binary options, trained players will advise you on the ins and outs of all the different options. Every dealer offers different binary options - there are dozens of them in all. But experienced players will advise you to start with the simplest and classiest options. Let's look at a few of them, which you'll find on almost every web dealing platform.
- Call and Put options (Above and Below, Up and Down). The idea is to identify whether the price of the basic product will be higher or lower than the strike price (i.e. the value of the asset at the time the contract is entered into) at the end of the contract period.
- “60-second” contracts. These contracts are a type of Up/Down options, with the difference that they expire in just one minute.
- The "Border". These contracts are also called Range. The essence of these contracts is that the trader is offered a certain price range marked on the chart. It is necessary to determine whether the underlying asset will move out of this range or stay in it.
- “One Touch”. The contract also assumes a certain price level of the asset. Knowing this, the trader must predict whether the price will reach this level in the allotted time frame. It does not matter which price will close the contract, as long as the asset touches a fixed level.
- “The Ladder” option is the most complex type of contract. There is a set of price levels, the achievement of which within the specified time of option's execution can bring up to 600% of profit.
So, the classification of binary options reflects the interests of traders with different investment objectives and also meets different criteria for commerce tactics and strategies.
Beginners in binary contracts are recommended for the simpler ones, which can be changed over to more profitable options during the process of getting profitable trading.
Analysis of Options
There are many types of strategies for work with binary options. They all include some kind of analysis.
Fundamental analysis is a strategy for long term planning of trading. It is of primary importance for option investment. Rising and falling prices in stock markets depend on the level of supply and demand, which depends on the reality of the sector, financial and economic indicators, so analysing actual events to predict market fluctuations is called based economic analysis. It can be your way of making money in uncertain market conditions and can help you profit even if the market is in a downturn at one time or another.
On a broker's site, you will use fundamental analysis by looking at the economic calendar and the news feed.
Technical analysis studies how the value of an asset changes over time. It uses charts to analyse price point movements. An investor simply needs to know the trend and then use tools such as moving averages and volume indicators to understand how binary contracts will change over time.
The platform will offer you many charts and indicators.
Some of the most commonly used include Stochastic and moving averages, RSI and MACD. These indicators can be used to determine the direction and trend of assets. The indicator used to trade binary options is usually determined by the level of volatility of the asset.
When you learn how to use and combine different types of analysis, you will be able to base your strategy on it. Some traders use a "news-based" strategy and work only with the economic calendar, while others use indicator strategies, where one or more signals must be used at the same time.
If you do not know where to start, then try out a demo account, which will help you get started without any cash risk.
Where to trade binary options in the UAE?
So, if you are planning to invest in binary options in the UAE, here are some tips on how to get started. First, as you may have already realized, you need to choose a good broker who will provide you with a flexible and functional broker site, with different assets and tools for successful trading.
Make sure the platform has a downloadable mobile app to make it easy for you and a service centre to help you in case of emergencies.
Then you need to create a trading account. Signing up is easy and won't take much time. Click on 'register' and simply follow the instructions.
To get the most out of registering on the trading platform, you should open a demo account before you open a real one. You will then be able to test the trading site and see how it works. The whole point of a virtual account is that you will be credited with the money when you sign up, but it's also virtual, so you will not be able to withdraw it from your account. You will need it to make trades and learn to trade.
Once you're confident in your skills and knowledge and want to try real trading, you'll have to choose the menu to make a deposit into your account, and this way you can follow the instructions to open a live account.
You will deposit it in any way convenient for you. You will withdraw your profit. Do not rush to immediately invest all your capital, start with a small amount of deposit, and then gradually expand your portfolio.
Use leverage in case you need to make a trade, but you don't have enough money in your account. This is a popular service among traders, and once you learn how to use it, you will be able to earn more!
Once you have learnt how to set up your platform and start trading binary options, you should follow any developments in the financial news. Brokerage software offers a wide range of information, including news about shares of investment institutions, stocks, commodity prices, etc. If you follow the news, you can make informed decisions and avoid making bad decisions.