Finance Technology

Binary Options on the Market Extremely Popular – Risks and Opportunities in the Test

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With binary options could be fast and especially easy to make money. Settled they would within hours, sometimes minutes, or seconds, the profit was encouragingly high, the risk low. The reason for these euphoric descriptions is especially the simplicity of the procedure for a Binary Options Registry. The trader has to decide between two possible scenarios and it put his money.

Binary Options: Explanation of terms

The term binary option (also known by the English term Binary Option) refers to a form of investment; the relatively new to the online broker market is in its approach.

A trader puts on a given market behaviour in order to make a prediction, when they apply, there is a payout. In the case that the statement made is not the case, the investor loses the offered deposit (or only receives a very small proportion of the investment return).

The term binary option is made up of the two words:

Binary: consisting of two units, characters or parts

Option: alternative, choice [option], choice [option]

Based on these semantic analysis can already be clearly seen that it is in a binary option is a speculative form in which you have two choices. For this reason, even “two options”, a common term when speaking of binary options.

In practice, it means that the dealer have two options to choose from. “Digital Options” and “fixed payback Options” and “Forex Options” also refer to the same thing and refer to the fact that the payout is determined by the actual trade.

Furthermore, you know the term “all or nothing” option. Although the term itself gives an idea already, what is important in a binary option, but the question arises: What is it actually exactly when speaking of binary options on the Internet, and how can you deal with them?

Trading with Binary Options

When trading binary options the dealer makes a directional decision, which relates to the development of a course (underlying are usually forex currency pairs – such as euro / dollar – equities, indices and commodities).

Are especially popular speculations on the price movements of major currencies (euro, dollar and pound sterling). Even commodities such as gold or oil offer interesting trading opportunities. Leading Broker (such as bank or Swiss De any option) usually offer a wide range of Forex currency pairs. Bought be trading call or put options at binary Options.

Call option: If the dealer from a rising rate of, he buys a call option.

Put option: If the distributor of a falling rate of, shifts to falling prices and buy a put option.

Reputable and rogue broker – how to go safely?

Brokers offer trading on binary options on the Internet. The broker has posted to its website the trading platform, on which the dealer can give its orders. For some brokers, it is possible to operate mobile commerce or to use a demo account.

The services of a broker, however, also include the support and the provision of latest news. The opening of the account is free with Binary options brokers and account management fees or order costs are not incurred, the trading is thus free. Some cash receipts or payments, there should be noted charges.

In practice, you open an account with the broker of your choice and pay a minimum amount of this one (this will vary from broker to broker and is between 100 and 250 euros). With the money in this account you can then start immediately with the trade.

To make sure that one does his business with a reputable broker; you should look at the choice of the broker’s attention to both the services and on the trading conditions. Does the broker on a demo account and mobile trading? If the trading platform and support in German? Check the number of tradable assets and determine how much is the minimum deposit and how much of the bonus.

Strategies for binary options trading:

To avoid being thrown into the deep water, it is also important in a simple form of investment as the binary option to pursue a strategy to minimize risks and maximize profits.

Simple strategy: follow the trends

The simplest strategy and thus also popular strategy is the trend following strategy. This is especially recommended during persistent price movements in one direction.

The dealer follows this strategy a certain development and the assumption that there is a broad mass of investors and traders are in trading, speculating either falling or rising rates. This mass is followed by Trader. Their popularity owes the strategy of the high success rate. Statistically, it can be demonstrated that existing trends tend to continue on.

For restless markets: Volatility Strategy

A volatility strategy is mainly used for very unsettled markets with high price fluctuations for use. Serve as a basis these strategy ad hoc responses of firms.

It happens that change rate movements namely within seconds. Generally it plays in the volatility strategy not matter whether rates raise or fall, very well, but the fact that there are major price movements (in one or even several directions). These variations are called volatility.

Since the direction of price movement is irrelevant, the dealer must speculate on a strong decline as well as strongly rising prices.

Thus the trader must acquire both a put and a call option with the same underlying and with the same maturity. Because the trader will suffer with one of the two options definitely a loss, the odds must be greater than 100 percent to make a profit at the bottom line.

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