Binary trading can seem confusing to newcomers. However, don’t let this dissuade you from making a quick buck; binary trading really is quite simple. We’ve explained the basics below, but if you’re still confused, visit a binary trading website like onetwotrade for more information.
Binary options refer to market options that pay a fixed percentage of an amount that is traded upon expiration. Put simply, binary trading refers to when a trader attempts to predict whether the price of a certain asset will rise or fall. The trader will then attempt to take advantage of this prediction. Visit the one two trade YouTube channel if you require video tutorials or advice.
What is Binary Trading?
Binary options trading is a new method of financial trading where there are only two possible outcomes: it works on the principle that the trader must guess whether an asset will increase or decrease in value upon expiration of the position.
A correct prediction will reap the trader profit. An incorrect prediction will have you lose your investment as well as a small percentage in your account.
What are the advantages of Binary Trading?
The best thing about binary trading is that it offers the trader instant gratification. Binary options work in very short intervals, over minutes and hours. It is not restrictive in the sense that binary trading is allowed on multiple market platforms. Trading is relatively relaxed too, as you know you can make and lose a certain fixed amount.
Are there downsides or risks?
The only downside associated with binary trading is that without enough preparation and research, like with other markets, the trader will lose money. It shouldn’t be treated like gambling at a casino, and it’s essential to do your homework on the assets you’ll be making predictions on. The risks are relatively low and are dependent on the trader.
How complicated is Binary Trading?
The key advantage behind binary trading is its simplicity. If you think an asset will increase or decrease, all you do is say so. Monitoring the asset in real time, you wait for the position to expire to see if you were right or not. While you can make unexpected losses in other markets, with binary trading, it’s impossible. Profits and losses are known in advance, so you know exactly how much you’ll make or lose.
What are Call and Put Options?
A Call Option is one that gives the holder a profit when the asset increases in price (in comparison to what it was purchased for). A Put Option, on the other hand, is one that gives the holder a profit when the asset decreases against the purchase price.