What is Binary Options Trading?
A binary option is a type of options contract with a fixed payout that will depend on the outcome of a yes/no proposition. If your prediction is correct, you receive the agreed payout. If not, you lose your initial stake, and nothing more. It's called 'binary' because there can be only two outcomes either win or lose. The only thing that is matter is whether the prediction is correct or incorrect.
A binary option is In fact a prediction of which direction the price of the underlying asset (a stock, commodity, index or currency) will move by a specified expiration time.
For example: If you predict the next candle will be the bullish candle, you will place a call option trade with an investment of x amount. if the candle closes above the price of your order, you win with a fixed payout otherwise you lose your invested amount.
Suppose your per trade investment is $10 and the payout percentage is 85% if you win that trade, your final reward would be 10+(10%85) = $18.5.
The payout percentage depends on currency pairs and market hours.
How to start binary options trading?
For your information, binary options trading has high reward potential as well as a high risk involved. To start with binary options trading below are the requirements:
- Mobile phone or Laptop (Laptop highly recommended).
- High Internet Speed.
- Open an account with a legit binary option broker.
- Strong technical analysis & candlestick knowledge.
- Trading discipline.
- Money Management & Risk Management Skill.
- Passion for trading.
How to open an Account:
There are many binary options brokers operating in India, my personal experience is only with Pocket Option for the last four years.
click on this Once your trading account is activated, you can start trading on a demo account and live account but I would highly advise you to practice on a demo account till you get familiar with this platform and gain some more trading knowledge from this book.
If you are a beginner, you must follow each and every step mentioned in this book with demo practice for better results. The more you practice on a demo account better your trading skill level would be.