There’s a lot of talking going on among online investors about the binary options trading system and all the trading platforms providing it. This financial instrument emerged from high-frequency trading method several years ago, and it has been gaining impressive popularity ever since. Due to its simplified and effective way of functioning at the market, it has attracted many new traders who don’t have actual knowledge about trading at the market or experience in this field.
At the same time, seductive advertisements and proposition coming from various trading platforms present binary options trading system as the method that will truly make you a millionaire within few months. All of this raises suspicions and skepticism, making it hard to pull the right move whether to get involved or not.
The most realistic answer to the question would be – yes. The binary options trading system can truly make a difference in your life in a positive way, but only if you do it in the right and smart manner. You have to make the right call when it comes to choosing trading software, associated broker, and trades to place.
Are there some solutions proven to be successful?
Experienced market traders are familiar with trading software and broker companies that are trustworthy and provide a high level of quality professional services. Of course, dozens of new trading platforms are emerging in this field every once in a while, but experienced traders know how to recognize whether the system is truly solid or just another fraudulent organization.
Since the binary options trading system works as a signal provider for traders, you need to have accurate, fast and precise software that will continuously search the markets for winning opportunities, generate a signal when one shows up and execute the transaction via associated broker as soon as the opportunity is in the air.
This, also, means that you have to have a reliable broker that offers lucrative trading terms, profitable returnings, affordable deposits and convenient account settings. In short, you will need the trading platform, and working environment where investing your money will have a great chance of paying off.
Partner with a trade system if you want steady trading ground
It uses complex algorithms in the background to keep an eye on all ongoing fluctuations at the market, trends of the prices and moves of the other investors. Based on the accurate wide picture of the market, it alarms you every time a winning opportunity show up, and if you set it to work completely automated, it will place the winning trades on behalf of you.
Profitable terms of trading
Truth to be said, your profit depends on the amount of money you fund your trading account with. Usually, this trading platform doubles your money within few days taking no extra charges or fees on your profit. The money you deposit initially when creating account is your starting investment, so you won’t lose it.
The application itself is free. Returning rates are around 90%, dozens of assets are available for trading, all markets are covered and it is all very smooth and user friendly.
The title of this article might be misleading so let us clarify it. Even though the stock exchange is called a trading market, basic stock trade is just one form of the presence on the market. Different investment strategies define the way a trader makes a profit, and thus their presence differs.
The difference between various strategies may be slight, and it also may be so different that you can’t compare two approaches to the stock trading. The risk is another aspect that differs between the strategies and it is the best way to compare them.
Investing and speculation approach to the stock exchange
These two terms stand on the opposite sides of the trading strategy spectrum. While one strategy focuses on one asset and the dividends it offers, the other focuses on speculations of the future price movements of the assets and active trading.
Investing is mainly done by rich individuals and mutual funds. It’s quite simple; you buy all the stocks from a company and gain a big portion of the ownership. You earn dividends and wait for the breakthrough in the enterprise. Once the company succeeds and the value of their shares skyrockets, you sell them and do that again with another company.
The catch is to find a company that just entered the stock exchange. They also need a high probability of success in the future. This means that you will buy their shares for a pocket change and once the make a breakthrough their shares will gain value, and you will be able to sell them for enormous profit.
Speculation is the opposite of the investing, and it carries a huge risk. Traders that speculate on the stock market use little to no data in their trading strategies. They hear rumors about a company, and they buy their shares. The majority of speculators lose their money in the first week of trading. Some of the give up while others go through online courses and come back to the market as traders with some basic knowledge about stocks.
Those that give up after their initial loss either give up on trading as whole or turn to binary options due to their simplicity. Binary options come with software that helps them in trading. There is software that analyses the info and comes up with trades that have a high chance of ending in profit.
The primary form of trading on the stock market
A speculator that comes to his senses has to go through education and practice to become a standard binary options trader. This process may last for several months, but once an individual goes through it, they gain necessary skills to make money through stock trading.
A trader has to do their research about the company and its shares before they invest their money in it. This research phase may last several days, and in the end, it might yield nothing. A good trader knows when to give up on a stock and when to go against logic and invest in it.
You can also use robots (ranked by their customers at Top 7 Binary Robots) to make things even easier.
Even though binary options have limits that prevent significant investments, it still has risks that follow this kind of trading. You won’t be able to lose hundreds of thousand dollars in individual trades, but you can lose it over some time. Like any other form of exchange, binary options also have good and bad things.
We will focus on advantages and disadvantages of binary options trading, and we will try to cover as much as possible. Even if software offsets some of the drawbacks, we will mention it. Click here to find out more about binary options software.
Advantages of trading options
Conventional exchange trading is complicated and requires a lot of involvement. Binary options are simple, and you can trade them with very little research. You will still need to do some basic research on the underlying assets, but it won’t take hours to decide whether it is smart to trade or not.
When you trade binary options, you have full control of the potential losses. That isn’t true for regular trading. If for example, you buy some stocks, their value may go down, and you might lose more than you invested (leverage). An option has a fixed price, and you can lose only what you invested in it. You also know how much you might earn so you can plan future trades with full knowledge about the resources you have for them.
A trader has complete control over the amount of potential loss when they trade options. If you don’t want to risk more than (for example) 500 dollars, then you just enter five trades. If you win some of them, you can enter new trades without risking more than the original amount. This controlled risk is unique to this exchange market.
Disadvantages a binary options trader has to face
One of the biggest disadvantages of this form of trading is the imbalance between win and loss percentage. Most of the trades that have a high chance of profit offer around 50 percent return rate. This means that you will earn 50 dollars for a trade that ends favorably. If the end of the trade is unfavorable, then you lose entire investment (100 dollars). The broker has the advantage in every trade you make, and that is something that will never change.
Many brokers will offer you software, but only a few will supplement you with trading tools. Only a few big brokers provide some basic trading tools, which is a sad thing. The solution for this is to download trading tools from third parties and use them. It will complicate a whole thing, but that is the only viable way to analyze assets and find good trades.
Only a few brokers will give you free demo account for practice. And when you enter that account you will find that it has a limited amount of virtual currency. This means that you can’t practice trading before you invest real money. Supplement yourself with knowledge before you invest your money to offset this inconvenience.
There is no kind of online trading that does not involve learning and effort. Although it is simple to learn and access, binary trading is no exception. No matter if you make decisions on your own, use binary option robot, it is necessary to know how to perform market analysis if you want to be a successful trader.
Why is financial analysis necessary?
Financial analysis is absolutely essential in any type of trading. It does not matter whether you trade on stock or Forex market, or trade some of these assets through binary options. What financial analysis enables you is to be aware of the changes in the market. It allows you to predict the market movements based on different factors. This further leads to understanding how the market works and making the correct decisions while trading.
There are several types of analyses binary traders can use. Some of them are suitable for other trading types as well, like stock and Forex trading. Some of the most common types are technical analysis, fundamental analysis and quantitative analysis. Each of them has its benefits, drawbacks and applications, but all of them can be applied to binary trading to some extent.
This is the most commonly used type of analysis for binary trading. It relies on the presumption that every movement of the market in the past is likely to repeat in the future. Technical analysts believe that the market movements repeat in cycles and form patterns, from which they can conclude the future market fluctuations. This analysis does not take into account any fundamental aspects of the market, but only deals with statistics.
It is most commonly used for day trading style, because it allows predicting short-term movements rather than the long-term ones. Since binary traders are often considered to be day traders, this is particularly applicable in this case.
This type of analysis takes into account all the fundamental events in the market and society. It pays less attention on historical movements, but tries to predict the future movements based on other criteria. For example, if you want to predict the value of a certain company’s stocks, you will consider the current value of the company, the geopolitical situation in the country and the like.
Fundamental analysis is not directly applicable to binary trading, since it predicts movements in much longer terms. However, it can provide the traders with substantial amount of knowledge about the market’s behavior and help them make better trading decisions if they start trading on long-terms.
Quantitative analysis presumes simple financial ratio calculations. In stock trading, for instance, this includes calculating earnings per share, discounted cash flow and the like. It is in a way similar to technical analysis, because it only deals with statistics. However, it can rarely be used on its own. What’s more, it is applicable mainly to trading stocks on binary platforms.
Binary traders combine this with technical analysis to get better insight into historical data, identify the patterns and try to predict the future movements. All in all, when all three methods are carefully combined, there is a high chance that you will achieve great success in binary trading.
The stock exchange was once reserved only for brokers on the Wall Street. That changed with the rapid progress of computer technology, and thus the market opened up for anyone who has an internet connection. It’s possible to become rich through stock trading, but it’s also possible to lose everything you have earned in a matter of hours.
A successful trader needs to have some understanding of the theory of trading, as well as to be familiar with tools of the trade.
Every serious stock market participant needs to be able to read daily reports and understand what info they provide affects and in what way.
Choosing a right stock at just a right time
The crucial part of the trading happens before the actual buy or sell action, and that is an analysis of various stocks and choosing which one to trade. Two distinct approaches to the stock exchange exist when we consider the way traders gather info about stocks and their value and its movement.
The first school of thought uses fundamental analysis to come up with stocks whose value should increase in the future. This kind of analysis uses statements from the company (earning reports, balance sheets and so on) to calculate the state it is in. It’s quite easy to find those reports, and the most important thing is to know how to read them. Other factors that play a significant part in the fundamental analysis include market trends, the state of the economy and country of origin, media publications and so on.
The use of various indicators and charts is the basis for technical analysis, a less known and utilized approach to stock trading. The theory behind this type of analysis states that asset price follows a pattern which can be recognized and abused through various tools, including charts. This works as long as there isn’t an event that disrupts the normal movement of the price.
Both of those approaches have some good points, and it’s hard to decide which one of those to use. A new wave of traders uses the combination of those two methods to come to viable positions. This new approach seeks stocks with an excellent fundamental basis, and then they use charts to confirm the state of the asset. Once all lights turn green, a trader has a high chance of making a profit on a trade like that.
Stock exchange brokers
The first step every trader does is to pick a broker to whom they will be bound and through which they will trade. This is a significant step as it will determine the future of the trader. Every broker has a list of third-party software they will allow, and thus beginners should check what kind of software their broker will allow.
Fintech LTDis a company that offers brokerage for the stock market as well as other exchanges. They also provide software that aids in trading. Be sure to visit their webpage and check what they have. You might also want to check binary options offers they have, and that might suit you and the way you trade.
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