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Binary Options Trading For Dummies
Most investors today have many different investments in their portfolios. 

An increasing number are starting to invest in binary options

A binary option is popular among sophisticated investors because it's versatile. An investor can easily adjust or adapt his trade according to a current situation. 

However, options are not for a conservative investor because binary option trading is highly speculative means you must do various things to protect your trading from huge losses.
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Binary options trading is extremely risky but it can also be very prosperous. Thus, it's necessary to inform you that it's not for everyone.

You can lose a significant amount of money if you make a wrong trading decision. 

However, it's not good to be ignorant of it because it places you in a weak position.

Even if you are a conservative investor, it still pays to study binary options trading.
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If you are still a new binary options trader, you must first open a brokerage account with a reliable broker. Because of technology, it is now possible to open an online account. Prior to signing up with a particular broker, it is important to understand what a brokerage account is. 

A brokerage firm charges commissions for every transaction and the commission rate varies per broker. In fact, some brokers do not charge commissions. 

In selecting an options broker, we found that doing your own research is best.

To prepare you in options trading, you should read a few trading books on options to know about options types, terminologies, risks, tax considerations, and exercising and settling options.

Some common terminologies include call, put, holder, writer, strike price, expiration date, in the money, and out of the money.

You can trade binary options on stocks, forex, cryptocurreny and most other markets as well.

A call is a right to buy an underlying asset at an agreed price within a certain period. The buyer buys the call at a particular price, for example, a stock at $50 strike price. He predicts that the price of the stock will go up to $55, for example. 

However, because of the call option, he can buy the stock at $50. On the other hand, a put is the right to sell an underlying asset at a particular price within a specified period. This means that a buyer of the put option can force the put option writer to buy the underlying asset at the specified price. A put option is profitable for the buyer when he predicts that there will be a decrease in the price of the asset within the period.

A holder is the buyer of the option while a writer is the option seller. A strike price is the transaction price for the underlying asset.

If it is a call option, the strike price is the buying price. If it is a put option, the strike price is the selling price of the underlying asset.

The expiration date is the date when both parties agree to transact the underlying asset at an agreed price.

“In the money” means that the asset’s market price is higher than the strike price of the call option. In the case of put options, “in the money” means that the market price is lower than the strike price.

“Out of the money” means that the underlying asset’s market price is lower than the strike price of the call option. On the other hand, it means that the market price is higher than the strike price for a put option.

If you want to be an options trader, you must know technical analysis for you to earn money. Options trading is for short-term investing only; thus, it is important to be knowledgeable about the underlying asset’s price movements in the near future. You must be capable of predicting the movement of the asset price. You can only do so if you understand technical analysis.

If you want to try options trading, you should also know about resistance and support levels. A support level is that point at which the price of the underlying asset rarely falls below. A resistance level, on the other hand, is that point that the asset’s price rarely rises above. You can buy options near the support level. On the other hand, you can also sell options near the resistance level.

Furthermore, you must know candlestick chart patterns because you can use them to predict how the price of the underlying asset will move within a given period.

The moving averages, on the other hand, signify a continuation of the price movement towards a particular direction.
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To avoid losing a lot of money even if you are still a new options trader, you have to start trading using a demo account first.

In addition, you must review your trading regularly to determine how to improve your trading and returns.

Also, make sure that you have a balanced portfolio. It would be impossible for you to purchase call options all the time because markets are not always in uptrends. You have to ensure that you trade both call and put options.
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If you are still new in this venture, you should learn the basics first. When you know the basics you should start learning more advanced technical analysis strategies and techniques.


However, after you've learned new strategies you have to try them first in a practice account to avoid losing a lot of money.
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Johan Nordstrom Professional Trader Risk Management
I'm a family guy in my late 20's who learned how to trade the markets in a simple yet effective way. During university I studied investing and graduated with a master's degree in risk management. Quickly, I realized that I was onto something. I started helping friends and taking students. My students started getting results, spent less time in front of their screens, and their accounts grew consistently. Learn more about me here.
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