Binary Options Beginners Guide
- Published: Wednesday, 01 February 2017 16:37
- Written by Stephan
Even if there are numerous variations in trading; beginners can work out the essential basic rules for binary options in a few steps: The comparison between the final and initial market price always counts. To give a short introduction to binary options, we shall use the gold base value as an example:
Beginner’s guide: Binary options – Trading explained in a few steps
Getting started with binary options – step 1: The selection of a suitable binary option
Classic call-put options are initially suitable for binary trading newcomers and these rely either on a rising or a dropping market price of a base value. The duration should be rather clearly chosen, so that sufficient time remains for the handling but does not delay the output for too long. The extremely fast 60 second trade is indeed very amusing and exciting, but requires a sense of routine and especially concentrativeness and discipline. Longer-term binary options are indeed thoroughly interesting because the performances of a market price on a bigger scale can be well estimated for base values, but these are not suitable for the training.
Getting started with binary options – step 2: Gold price – the crucial point
As a beginner in respect of binary options, you should initially monitor the current price actions of the chosen base values. Based on various indicators and signals, the trader assumes that the gold price will rise on a short notice.
He chooses gold on the trading platform, sets his input amount and opens a call option of a duration of 30 minutes. With this, he bets on a rising market price. So in the opposite case, he would open a put option.
With the completion of the business, the current gold price of 1,262.1234 US Dollars is fixed per fine ounce with the start of the binary options.
The profit rate is at 72 percent from the beginning. The gold price now determines the expiration of the option. If the gold price is at least at 1,262.1235 US Dollars, the option is gained and flashes green on the screen – it quotes in-the-money. If the exact same market price is retained, the option quotes at-the-money and the input amount is reversed to the trading account.
If the gold price drops below the initial market price, the option quotes out-of-the-money and the input amount is lost.
Getting started with binary options – step 3: Chances and risks
The chances are enormous, since already with an input amount of 10 Euro, the trader can in this case earn 7.20 Euro. Binary options beginners in particular should however, not make the mistake of grossing up possible hourly earnings on this basis.
The risks are namely likewise high: The market prices of the base values move permanently in more or less big bars. So it can be stated, that the income opportunities are enormous, but also the danger of loss. However, it is important that the possible loss is limited to the input amount.