Becoming a binary options trader is easy to learn if you have experience as a Forex trader. For people with no financial trading experience, the learning curve in binary trading is shorter compared to Forex and other types of trading.
Most of the rules and regulations related to stock and binary options trading are quite similar. Knowledge of marketing is an added advantage for a novice binary trader.
The binary options trader chooses between two scenarios – yes or no, hence the term ‘binary.’ Binary options trading is a simply way to bet on whether an outcome is going to happen. The trader bets on whether an asset will be higher or lower than a certain level at a specific point in time.
While trading binary options, some risks are involved. However, there are also significant benefits.
Below is some information you should find useful if you are thinking of becoming a binary trader:
Free accounts for trading with select brokers
Most binary brokers offer free trading accounts. All you need to do is enter some personal information, fund the account, and set up a password and username. It’s as simple as that.
When you have a free account, all the money you deposit will be directed to the trades. However, for you to trade, there is a minimum amount you must deposit.
This trusted binary options review has a comprehensive list of the best brokers available today.
Fast Turnover Rate
In binary trading, the most intriguing factor is the ability to have a quick turnover. It, therefore, means that you will have a quick payout.
Even though they differ according to asset type, expiry times are less than one hour. For you, this means more options for trading each day.
Binary options have a relatively high risk. So they tend to yield higher returns compared to other investments.
A Forex trader, for example, might expect a return of 10%. With binary options, however, returns of between 60% and 90% are common.
Expected returns after losing trade
The best thing about binary options is their significantly higher payouts. However, as with most investments with a high return potential, risks are high too.
In order to make the whole process more appealing, there are brokers who may offer some returns even when you suffer a loss.
If an option does not go your way, you might be given a return of 5% to 15% on your investment rather than losing all of it.
Known risks and rewards
One of the greatest advantages of binary options is knowing the risk. You know how much you are risking and what kind of profit to expect after trading and winning.
You cannot lose more on a trade than what you invested in the first place. No matter what occurs in the underlying market, a binary option never goes above 100 or below zero. Even during a crash, it may go to zero, but never into negative numbers.
Binary options are significantly simpler than Forex. For the novice investor especially, binary trading is much easier to learn.
Most brokers’ website have a demo account option in which you can practice without using real money. The demo account simulates various scenarios that happen in real life.
You use virtual money on a demo account, which means you do not risk any of your own hard-earned cash. However, the profit you make in a simulation is not real either. Most demo accounts are free of charge and fairly straighforward to open.
Video – Definition of Trader
This Market Business News video explains what a trader is.