How to Trade Binary Options

learnBinary options trading involves predicting whether the option’s price will be higher or lower than the current price level within a certain time frame.

The standard options that most traders are trading is the call/put trade that is also known as high/low trade. Many people think binary options is a scam because they trade without first understanding the basics.

Educate Yourself on Binary Options Topics

The key to success in binary options is to educate yourself by reading a variety of books and tutorials on different binary options strategies. It is important that you don’t invest in an asset that you don’t know because this always result in losing money.

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You must know how to perform fundamental/technical analysis and read the charts. You can also attend webinar and read daily market reviews to improve your knowledge in the area. A good broker will offer an education center that is filled with basic tutorials to guide newbies in binary options trading. They make it easy for you to learn the basics of binary options trading through video tutorials.

Don’t Be Controlled By Your Emotions

It can be easy to succumb to your emotions and make the wrong decision when it seems that you are losing the trades. In this situation, you can try to make use of the rollover feature on your trading platform to extend the expiry time. This will give you more time to make decision on the trading and reduce your worries. Another reminder is to never place a trade size that is more than you can afford.

Evaluate the Brokerage Firm’s Customer Support Level

Before you join a broker, make sure to call their customer support and ask them to explain to you how their platform work. If you need more understanding about binary options trading, you can ask the representative to clarify it to you. Although live chat support offers quick response, being able to talk to the representative on the phone is better because you know you are speaking to a real person. You should take down the name and direct phone number of the representative so that you can call him back afterwards.

Doing Research on the Binary Options Broker’s Background

It is worthwhile to spend some time to do research on the company and find out where it is headquartered. You should look for another broker if the country where the broker is based does not have a good regulatory. To determine whether a broker has good reputation, you can search online to see if there is any recent news on the broker published at a reputable news site. Even if it does display a logo from a famous news site, you should do a search online to find the article just to confirm that it is real.

Three Steps to Placing a Binary Options Trade

Placing a binary options order with a broker can be as easy as following the 3 simple steps. The first step is to do research on the type of asset you want to trade. There are four main groups of assets that you can trade in binary options including indices, forex, commodities and stocks. You should trade on the asset that you are most familiar with if you want to increase your chances of making the correct prediction on the fluctuation of the price.

When you have made the decision about the asset type, the next step is to predict whether the asset’s price will go up or down. The Call option is to be selected if you believe that the price of the asset is going to rise. On the other hand, the Put option should be selected if you predict the price of the asset will fall.

The third step is to select the expiry time of the asset, from as short as 5 seconds to 1 week depending on the expiry time frames your broker offers.

You must always be careful with the money you want to invest in binary options trading. If the broker site does not look trustworthy, it is wise to only make a small amount of deposit when opening an account. To reduce the chances of losing money, you are advised not to spend all your money on a single trade at once but invest only a small portion each time.


In conclusion, it takes a lot of practices in order to generate consistent profits from binary options trading. Binary options is more safe compared to forex trading because you won’t lose more than the amount you invested in each trade.

Page Updated: July 20, 2016

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