Step-by-step Guide to Binary Options Trading

Step-by-step Guide to Binary Options Trading

Binary options are a simple and effective means for traders to profit from commodities such as shares, assets and commodities. Binary options trading has become hugely popular in recent years as traders only have to make a Put or Call decision, but there is a range of steps, factors, tips and tactics for trading that should be taken into account to increase the chances of success.

Trades and choosing a broker

Begin by selecting a currency, asset or commodity you would like to trade on. You must choose whether this underlying asset will either go up or down, over a certain period of time. Binary option contracts feature three key factors – the expiry time, the strike price and the payout offer. The expiry time is the length of the contract and can be as little as 60 seconds. The strike price determines whether your Put or Call decision will succeed, and the payout offer is the percentage return offered to you by a broker.

There is a huge range of brokering options available to you, each offering a certain bonus, deposit and payout percentage. It is important to select a broker that is fully regulated and licensed and offers additional extras, bonuses and benefits for the volume of trades you are anticipating to make.

Other binary options

The Call/Put option is the most common type but experienced traders often choose alternative methods depending on market conditions. A Touch Binary option has varieties including Double Touch, No Touch and Touch, and features predefined rates. Traders must predict whether the asset value will touch or not touch a certain level.

There are also 60-second options for savvy traders who want to maximize profits by reacting swiftly to sudden changes in the marketing. Boundary options are also available and offer a Range or Tunnel option and payout if the trader is able to predict that the value of an asset will remain inside set limits.

Trading signals

Traders usually opt to trade on the stock exchange, currency, commodities or individual stocks. For each of these, there are trading signals and unique factors that can provide you with a better understanding of the trading environment.

Potential signals for a shift in currency value could be civil unrest, political changes and season changes. When following stocks and share price movements, keep an eye on profit warnings, share dividends and management changes. For commodity fluctuations relating to gold, silver, copper and oil, keep track of trade wars, new mining discoveries and currency volatility.

Making money

Making a profit is the name of game and you will need to conduct exhaustive research and execute a plan to succeed. There is no secret formula but traders can build a platform for long-term gains by diversifying their trades, conducting analytics via data history for the underlying assets you choose, following price trends extensively, and effective money management. You also need to be able to read candlestick charts as their patterns and trends can facilitate successful trades.

Other activities such as demo testing and backtesting your methods and setting realistic goals can also be hugely beneficial.


As always, be sure you make use of the available practice account to hone your skills and trading mindset.  Remember, practice as if you’re trading in real life, and trade like what you do in practice.

Good luck in your binary options trading endeavor!

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