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Simple Guide to Binary Options Trading

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When you are first getting started with binary options trading, it can seem a bit overwhelming if you have never traded anything before. Something that makes binary options different from other types of trading is that it is relatively simple to get started. By following a few simple steps, you will know everything that making your trades entails.

Choose the Asset

The first thing you need to do after putting your funds into your account with the broker is to choose an asset. You can choose from currency pairs, indexes, commodities, and stocks. Most of the time, you will benefit most from trading in assets that are volatile. If you are trading an asset that doesn’t have frequent movement, you will not be gaining the real benefits of binary options. The price won’t move and you will never finish in the money.

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Choose to Put or Call

Once you have your asset, you will then need to determine what you think will happen with the price. Do you feel that the price will go up, based on your research or evidence? If so, then you will put in a call. This means that you feel the price will go above the current strike price. If that happens, then you will be in the money. If you feel that the price is going to drop below the strike price, then you would use a put. If you are correct and the price dips, then you would finish in the money.

How Much Do You Want to Invest?

You then need to choose the amount of money that you want to invest with the binary option. One of the mistakes that new traders make is that they overinvest when they are getting started. Binary options are a win/lose proposition, and too many losses means you will be losing too much of your capital. Start small and get your bearings before you make larger trades. One of the good things about binary options is that you will always know exactly how much you are risking.

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The Expiry Time

You also need to choose the expiration for the option. With binary options, this can be as low as 15 minutes, half an hour or an hour, a day, or a week, for example. Research of the assets makes it easier to know the best expiry times to choose.

Learn the Markets

As you can see, getting started with binary options trading is easy, and it only involved a few steps. However, you should never invest without knowing more about the assets and the market in which you are trading. If you don’t know about the assets, you will not be able to predict their movement, and it will be impossible to make accurate trades that actually put you in the money.

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