Contents:
1.Step 1.Figuring Out "Essence" of Binary Options!
1.1.The Structure of the Financial Machine
1.2.What Is an Option or Why to Buy Opportunities?
1.3.Binary Options – Exotics or Essentials?2.Step 2.Choosing a Reliable Broker – a Myth or Reality?
2.1.What Factors to Take into Consideration?
2.2.What to Remember Opening a Trading Account?3.Step 3. Choosing a Trading Strategy – How to Make Money Trading Options?
3.1.Scalping Strategy to Impress You for Sure
3.2.How to Make Money in Long Terms?4.Step 4. Insure Yourself from Losses!
5.Step 5. Motivation as a Stumbling Block on the Way to Success!How to avoid mistakes while trading?
6.TOP-5 Mistakes of a Novice Trader
7.Tips for a Novice to Stay Safe at the Exchange
8.The Conclusion
Greetings, friends! It's John Foster and in this article we'll talk about how to make money trading options. But I will start my today' story with a "dreadful secret". This secret holds the hand of your success. And having realized its essence, you will get a chance to really change your life and make it better.
So, do you know what we are best in? Idleness! It' shy far easier to argue about the injustice of fate than make concrete steps toward success. But while you doubt on should you try to improve your life, it just comes by you!
One of traders I'm acquainted to often compares trading binary options with driving an automobile. As long as you don't have basic knowledge, you just tease your steering wheel and press pedals. But you can never know the structure of the car! So, driving ends with the first disrepair. That's why I recommend you clarify each and every term initially and recognize regularities of price movements.
Learn to understand market psychology and you will find the answer to how to make money trading options! And you can find basic information in the article "Trader's Encyclopedia".
You should allocate special time for studying technical and fundamental analysis. These methods let you understand behavior of the chart better and make market entrances more reasonable.
Financial world is getting more complicated year by year. And some time ago, trading basic assets (currency, stocks, raw) was popular. And nowadays, market met derivatives of them - these tools are exactly called this way - "derivatives".
Derivative is the kind of securities, standard civil contract, which obliges both sides to purchase or sell basic asset in future.
Main types of derivatives:
To explain the difference between derivatives, I give you an illustrative example. You open your bakery and you will need much flour in 3 months.
A classical option is when you purchase opportunities. It lets you buy in advance the right to purchase or sell some asset with the fixed price. It looks quite complicated, doesn’t it? And why do we need to buy chances? Isn’t it better to buy the asset itself – gold, oil, currency or stocks? Yes, it isn’t!
Let’s figure out the term of an option with a simple example. Just imagine for a second that you are an oil tycoon. Sounds great, doesn’t it? As experienced in this business, you realize clearly the extent of risk in this activity. And, for sure, you are eager to cut this risk. But how to do that? Easy enough – just buy an opportunity to sell oil with a price profitable for you for the period of half-year or a year.
You can see the chart of oil price movement for the last 5 years. Let you buy a 1-year Put option every year on December 24 instead of eating Christmas pudding. In this option, you set the price you want to sell oil with in a year (Strike price) and exact expiration date.
Scenarios:
Hedging is the process of opening orders having opposite direction at one financial market (e.g., option exchange) in order to compensate potential losses at another (e.g., goods exchange). Engaged to hedge trading risks. And though profits are not that enormous in real life (nobody will make an unprofitable deal with you), they still give you an opportunity to reduce trading risks significantly.
Now trading options doesn’t seem silly stuff, does it? After all, proper purchase of an opportunity can lead to profits that would be 10 or 100 times more.
So, we’ve made the term “option” clear. But here’s the consequent question appears – why to complicate everything, engaging so-called binary options? Isn’t one kind of this financial tool enough? It turns out it isn’t! Trading classic options requires great investments and extremely complex calculations. That’s why the world knows few successful classic option traders. So, if you are not an oil business tycoon yet with your own board of analysts, forget about classic options for a while. But is it possible to simplify this system? Surely! For that, there are binary options, which were called exotic financial tool some time ago.
Trick or treat, all or nothing, up or down… Binary option always contains the struggle of two contradictions. What is the essence of this maximally predictable financial tool?
1.If earning at Forex directly depends on the way the price has come, how to make money trading options? It makes sense with the correct calculation of time. What does it mean? You don’t need to count how much pips there are of rise or fall of an asset price. The main goal is to define price movement direction correctly and for fixed time. For example, according to your strategy, you make a forecast that EUR/USD chart will go down and open a 60-second option. If the price falls for just a pip in a minute, you will be in profits (“Won”), if it doesn’t change – this is “Tie”, and if it rises – you lose (“Lost”).
2. You know the amount of forecasted profit and extent of risk before opening the order. And this is the primary advantage of binary options! You always know for sure how much you can lose and win. Never a one more financial tool gives such a privilege to a trader!
You can find more information about the true essence of binary options in the article “Who Gains from the Statement Binary Options Scam? Professional Opinion of Financiers!”
So, you’ve drilled literature about trading and figured out each word there. It’s time to open your own trading account! And this is the great seduction for a novice trader. Maybe to fall for persuasion of a broker offering minimal deposit? And use the opportunity to trade for free at the demo-account? It would seem there is nothing bad in this stuff…
Remember: demo-account can’t teach you anything! Moreover, such “trading” gives you excessive self-confidence, which you may pay much for further. Pay much literally. But what could a novice trader do? The answer is simple – one needs to trade at the real account, opening minor positions. But before – choose a reliable broker which may let you make money.
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To break doubts about the broker, analyze the following information:
As for me, I was looking meeting all these criteria for long. But for last years, I’ve never regretted about my choice. You can read about the company I trust in the article: “TOP-5 Facts You Didn’t Know about UTRADER: Reviews, Feedbacks and Proven Ways to Make Money”.
If you wish, you can try to find your perfect broker yourself. But get ready it will take much time.
Each reliable company will request scans of specific documents for verification, when you open a trading account.
Verification is a process of user’s personal data validity confirmation.
The most common list of confirming documents contains:
1.Scans of bank card used by a trader to top up trading account of a broker. Important: only 4 last digits of a bank card’s number and the signature on the opposite side must be clearly seen in the photo. For your own security, conceal first digits on the front side and CVV-code on the opposite!
2.Scan of trader’s ID card with a photo. It may be a passport or driver’s license.
3.Scan of bank extract, check or receipt of payment for public service of not more than 3 months standing.
Verification is the important stage for every trader who is wondered how to make money trading options. I strongly recommend provide your broker with valid personal data from the very beginning! Especially your phone number. Otherwise, there can come a situation when you won’t have access to your own account for a while.
The primary rule of a successful trader is to trade themselves. That’s why, I advise you to forget about robots and wonder indicators giving fabulous profits. If you wish, you can test this rule with your experience. If you don’t care about your deposit, of course.
I recommend starting with “The Bullet” strategy. Its name says for it. With this very tool, you can scale your deposit and boost it. The algorithm is built on price bounces off resistance and support lines. Rules about how to make money trading options are quite simple, so “The Bullet” suits for novice traders perfectly. For successful trading, you will have to analyze the economical calendar and draw simple figures at the chart.
You can trade with this strategy for at least 2-3 times a day. And accuracy of entrances provides stable and swiftly growing income. As you can see, it’s possible to get $100 of net profit for less than 24 hours, using this algorithm.
If you don’t have much time to spend while trading – nothing to worry about. “Secret Ally” strategy will neatly solve this problem. It’s based on the analysis of candlestick patterns and lets you spend just half-hour a week for trading. You will have to enter the market twice a week: on Monday – to open the order, and on Friday – to close it and estimate its result. In case when there are no patterns letting open an order according to a strategy, one may use news scalp as for an additional method. After all, all the pairs with yen are characterized by strong impulse movements when important news are published.
Important! Main news about yen are published in Asian trading session – from 1 AM to 7 AM (GMT).
Profits here are not that great, but the advantage of “Secret Ally” is that it teaches you feel the market. By the way, this strategy can be used as an additional one. Having chosen the trading session, make it a rule to stick to principles told in it. The opportunity to carry out experiments will appear further. And now, any “initiatives” can turn in wasting the deposit.
Each trader makes mistakes in the beginning of their way. Just accept it and try to minimize their consequences. How to do that? It’s easy – just pay attention to studying rules of money management, and stick to them. It turns that90% of novices break those rules. And the result won’t be surprising for you: wasting deposit and whining that binary options are the scam. Want to join those novices? Then close this article and follow your path.
But if you still read these lines, then, you have a good chance to insure yourself from serious losses.
Let’s figure out how to do that:
More information about how to make money trading options with minimum risk can be found in the article: “Money Management: Keystones of Successful Trading with Binary Options”.
It may sound banally but until you believe in yourself, success will miss you. Know why? You will push it off! You may wonder whether it’s possible. It’s simple. When you believe in your own helplessness, you are programming yourself to make helpless and hopeless actions. And conversely, a confident person chooses those way which will lead them to success for sure.
But how to develop this indispensable confidence? Let’s make it clear:
According to the well-known statistics, in the very beginning of the way, 95% traders get wasted. What does it mean for us? Only that because of this number, we can specify the main mistakes of traders and finally realize how to make money trading options.
How to make money trading options? Here is my personal list of tips for a successful trading:
So, today we’ve figured out how to make money trading options. Now you have a ready-made instruction for doing – your compass in trading thunder! It is the clear plan what will let you not only stay afloat while trading, but also reach any top. Remember: there is nothing simple in this life. And one must work hard to get what is wanted. But you must make your first step, and the way to success will be a bit shorter! Get successful in trading!
Best Regards, John Foster.
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