How to Manage Money While Trading Binary Options

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    Perfect For Beginners!
    Free Trading Education!
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  • Binomo
    Binomo

    Good Broker For Experienced Traders!

Is It Possible To Make Money Trading Binary Options?

Trading binary options online has become possible in 2008. It was a new way to make fast profits online for financial speculators. Trading binary option is open and available to anybody over 18 (one should check local government regulation before trading BO).

Binary options allows the user to speculate and place trades, which are essentially bets, on the direction of financial assets from a basket of currencies, stocks, commodities and indices. In binary options your losses can never exceed your deposits and your return is clearly defined at entry.

It is no secret that trading on the world’s financial markets by buying and selling positions has made many millionaires. It is also a fact that the markets bankrupted many more. The line between winning and losing can be very subtle. While trading may not be for everyone, the unprecedented ease of access to financial trading online has certainly made a lot of people happy about new possibilities.

Is it really possible to make money? If so, how much?

The big question is can you really make money trading binary options? Short answer is yes, but it’s not that simple. Whether you make money or lose money really depends on a number of factors including your risk management, trading strategy, the options that you choose when you enter the trades, your broker fees, your trading psychology, etc. There are simply too many factors to consider but of course it is possible to win and make money, but it’s not as easy as binary options advertising has us believe.

Brokers will often entice people with all types of bonuses and ads that suggest making money trading binary options is very easy. Although the actual act of trading binary options is easier than Forex it is not easier to win and make money consistently in binary options.

Here is a mathematical formula to calculate break even ratio in binary options:

  • B – Break even ratio – (shows how many times you need to win to break even)
  • I – In the money ratio – (shows broker payout for winning trades)
  • Ot – Out of the money ratio – (shows your losses for losing trades)

Using the above formula you can calculate the break even ratio assuming a set of fixed parameters. Assume your broker pays you 90% for wins and takes 100% for losses.

B = 100% / 90% (in the money) + 100% (out of money)
B = 100 / 190
B = 0.5263

What this means is that in the case of a payout rate of 90% and 0% rebates on losses you will have to accurately predict 52.63% of your investments in order not to break even. This break even calculation can change quite significantly with different options. A 90% payout is very generous and rarely seen in binary options.

Let’s look at the numbers and for the purpose of further illustration let’s assume that we are dealing with a trader who has a trading strategy with 75% of wins. (There are numerous signal providers that achieve those levels.) 75% of wins is quite high for most standards. He also uses a binary options broker who offers only 70% of profit on each winning trade.

In one month he takes 52 trades and on each trade he puts $100. His total investment will be $5200. It averages out to about 2 trades per trading day. Let’s also assume that each trade has a payout of 70% and a return of 0%, as is the case with many binary brokers.

When we divide the total sum of his investment of $5200 between the 75% of winning and 25% of losing trades we split the working capital between $3900 which was spent on the winning trades and $1300 spent on the losing trades. Now let’s take the $3900, the 75% of his total trading capital, and add 70% of return payout on the winning trades which will produce $2730 of profit. His losing trades, the 25% of total trading capital, cost him $1300.

*The end result is wrong, it is $6630 which makes it 27.5% increase

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  • Binomo
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So now that we know how much profit was made, let’s take those numbers and put them into the mentioned breakeven ratio formula to see how many times he actually needed to win in order not to lose any money at all.

This financial calculation is quite modest because it assumes a return of only 70% on wins where many brokers offer payouts over 80% and some brokers also offer returns on losses, only about 5-10%, but this will change the numbers significantly.

In addition, there are a few binary options signal providers who consistently achieve higher percentage of wins than 75%, which would also drastically improve profits as well.

So, only for the purpose of further illustration of what would happen if the overall wins were 80% and the return payout also 80% we’ll continue with our calculation. In this case $4160 is our winning capital, namely the 80%, and the remaining $1040, the 20%, is the losing capital. The winning capital of $4160 generates $3328 of profit (80% of payout for wining trades) and the losing capital of $1040 is simply lost, we’ll also use 0 return for losses in this calculation. So, out of 52 trades for $100 each the profit is $3328 and loss of $1040. Remember, that’s only in one month of trading.

As you can see the difference in earnings is huge between the first and the second example. A 24 percent per month as opposed to 2.5 percent per month is a world of difference. This is why it is so important to understand your risk exposure in binary options. Let’s see how many times he needed to win to break even:

Professional traders understand that and seek options and ways to keep the odds in their favor. For example trading with brokers that offer 85%-95% on wins and some return on losses. In addition there are ways to trade binary options to receive even higher payouts, as high as 200%.

Of course were profits can be made in a such a quick way there is inevitably going to be more risks involved. You can make money trading binary options online, there is no doubt about that, but you can also lose money. Following a reliable binary options signals or strategy or a professional trader in live sessions can really help you succeed in trading binary options online. It could be the difference between winning and losing.

3 Ways To Make Money With Binary Options Trading As a Beginner

3 Ways To Make Money With Binary Options Trading As a Beginner

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Last Updated: Aug 30, 2020 @ 10:07 am

With beginners in mind, i am writing this article to explain how you can make money from binary options trading without ever learning how to trade!

Yes. Everything has been made really simple by other professional traders.

People, especially the newbies often think that binary options is “scam” especially after considering what other minority are saying about it but i can boldly tell you that trading options is not fake.

Needless to say, binary options is a new innovation in the world of online financial trading which came into existence about 3 – 6 years ago.

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Everything You Need To Know About Binary Options As A Beginner

In simple terms, Binary options are types of trade options where the payoff (reward) received is either all or nothing at all. This type of option has really gained popularity in recent years with more binary options brokers appearing day by day.

In this type of trading, there’s no need to worry about liquidity and volatility of assets any longer when executing digital option trades. It fixed payout and there are only two possibilities in this type options. First, either the price of the current rate of asset will rise or fall within a specified time frame. Your ability to predict correctly, the result of your binary option trades will determine the reward you’ll get after the trade has expired.

Terms like “In the money” and “out of the money” are binary options jargons often used to denote when a correct prediction has been made within a specific time frame or incorrect prediction made within the same time respectively.

It is very simple to understand and use because the most important thing you need to know is to predict correctly, the asset’s trend direction within a specific time frame.

Assets traded in options could be stocks, commodities, indices and forex. Since it have expiry times and dates, your fixed return price is also known as the strike price.

What i consider best aspect is that regardless of how much the instrument or asset has moved, you are paid a fixed return on expiry provided the correct prediction was made. On the other hand, a trader who predicts wrongly on the asset’s direction will end up losing a fixed part of his or her investment or can even lose it all at expiration.

If a trader believes the market trend of an asset will go higher at a specific time, the trader would purchase a “call” while traders that believe the market trend of the same asset will go down for that specific time frame would purchase a “put”.

In both directions, you can make money by earning a fixed return on your investment provided the correct prediction was made.

For a call to make you money, the current price of the asset must be above the strike price at expiration. In the same vain, for a put to make money, the current price of the asset must be below the strike price at expiration.

One major advantage of trading options is that both the risks involved and reward are known. This simply means that it doesn’t matter how much he trade moves in favor or against the trader. One the factor is always certain, win a fixed proportion of your investment or lose a fixed proportion of the same investment.

Because of the high rate of return on investment often witnessed ( e.g 70%, 80% and up to 90% returns), one would think it’s a quick way to become very rich overnight. Don’t think that way because the major demerit is that the reward is always less than the risk staked on a trade.

3 Ways To Make Money With Binary Options As a Beginner

As a newbie, you have little or no knowledge of the various strategies used in predicting whether the price of an asset will rise or fall within a specified time frame.

As a result of this, we need the help of signal providers to make money with binary options trading.

As a result of our extensive research, we’ve come up with three genuine binary options signal providers you can use to make money online with binary options.

#1. Super Simple Bot (Best for Automated Trading and Perfect for Beginners!)

If you don’t have the time to trade but still desires to make consistent monthly profit, then binary option robot software is for you! It works just as its name sounds. It is a robot that trades binary options automatically on your behalf even when you’re asleep in the deep hours of the night.

This robot saves your precious time because there’s no more need to perform extensive fundamental and technical analysis before trading.

The robot trades by using the most important trading strategies which are the classic system, Fibonacci system, the martingale system and a combination of some other advanced binary options trading strategies.

Best of all, it is free of charge and works as well. Generally, i don’t consider the cost of some of these robots when purchasing them because the profit they make for me will usually surpass their cost in just a few hours of usage depending on my account equity.

With the Super Simple Bot, you’ll get access to the following:

  • Access to a variety of binary option brokers.
  • 89% Average Winning Trades
  • Many simultaneous trades
  • 100% Automatic Robot Trading Software
  • Different currency pairs
  • Amounts vary from $5 to $500 per trade for the different brokers
  • Variable time frames
  • Free upgrades
  • No Secret Fees!
  • Multiple Signal Providers
  • 100% free automated robot trading software

#2. Binary-autotrader (Best Signal Provider)

Binary-autotrader.com is a professional binary options signals service that generates 100+ signals per day and automatically applied to your account with a 65-70% win-rate. Signals365.com is developed by a team of professional traders and developers with no affiliation to a broker. All of their signals are delivered on an intuitive signal interface with sound alerts, warnings and countdowns of when to take a trade.
Unlike other signal services, Binary-autotrader.com also published all of its results for full transparency.
You can get unlimited access for free by signing up to a broker on their site now.

Binary options robot (binary-option-robot) is an automated trading software for binary options. It is an executable file that can be freely downloaded to your computer. It generates signals and as well trades on your behalf using those signals.

The signals are generated based on the technical strategies that are integrated into the robot. The robot works by analyzing the market trend in real time and calculating the live value of each indicator (MACD, RSI, Stochastic oscillator, William’s percentage and Commodity channel index). The indicators that gives best signals are MACD and RSI.

With this robot, you’ll get access to the following:

  • Access to 4 binary option brokers (TopOption, OptionWeb, SetOption and StockPair)
  • Up to 5 trading indicators
  • Up to 83% Winning Trades
  • 7 maximum simultaneous trades
  • 100% Automatic Robot Trading Software
  • Up to 7 currency pairs as opposed to 2
  • Amounts vary from $5 to $500 per trade for the different brokers
  • Variable time frames
  • Free upgrades
  • 60 days Money back guarantee

This kind of robot is best for beginners as well as traders who don’t have time to study the market and execute the trades by themselves.

General Note:

If you a total newbie and don’t even know where to begin in your binary options trading journey and career, i strongly suggest you use the Super Simple Bot for trading as most beginners have seen amazing results and tremendous success with the robot.

How to minimize the risks of losing money when trading binary options?

Despite all the advantages of trading binary options in this mode of working with financial assets, like any other direction of trading, there is an indicator that has a critical impact on the end result of any trader’s work – it’s about financial risks! It’s the risks that do not allow you to achieve the goals set by the market participant and lead to a loss of investment capital. Most beginners and experienced traders faced such a problem. Today we offer for beginners of binary trading a list of recommendations – how to minimize the risks in trading binary options. We do not offer supernatural approaches or methods to reduce losses, but only recommend certain rules of conduct on the market that allow us to obtain the optimum risk regime.
So, let’s start from the very beginning and talk about the risks from the position of knowledge and experience. Most potentially successful investors lose their money in the first week of trading only because of excessive self-confidence. A familiar situation – I can, like that guy, earn fabulous money! I learned the instruction on drawing up options – what else do you need !? Yes, I can earn as much as I want! Well, other conclusions of this kind! Yes, with this start-up, the risks are simply incredibly high and the loss of the deposit is only a matter of time. Hence the first recommendation for minimizing risks – before completing your first real contract, thoroughly study all the techniques and approaches to option trading, as well as the very algorithm of the contract itself!

We go further, we will consider the statistics of trading operations. Many know that the growth of capital and the volume of profitability of trading depends on the number of issued rates with a positive outcome of the expiration. There is such a thing as a negative mathematical expectation, so in binary trading it is -15% with a maximum payout rate of 85%. It is these 15% of the difference between loss-making and profitability of contracts that eat up your deposit. Therefore, the main recommendation of professionals in effective trading is the use of highly efficient trading systems or forecasting (as you like more). In order for the investor’s capital to increase steadily, it is enough to execute more than 60% of contracts with profitable expiration. All is simple, so you will block losses from unprofitable rates and create conditions for the growth of investment funds. For example, a simple and uncomplicated system based on standard analysis indicators gives more than 80% of profitable contracts, which allows you to increase capital with high dynamics and always be in the positive area of ​​the account balance:

This will be the second recommendation on risk reduction techniques – always use the market valuation strategy – this will give you the opportunity to work in the market without critical losses of capital.
And finally, the financial indicators of trade. Here we are talking about the rules of money management and, directly, financial risks. Heard “Risk management” or “Money management”? Yes of course heard, but only if you have already merged your deposit, you just did not use these rules. Here everything is extremely simple and long calculated! To minimize risks, professional traders recommend choosing in each individual case a certain indicator of the value of options, which will have an optimal correlation with the efficiency of the strategy with the volume of trading capital. Standard values ​​of money management are considered to be the value of options, which is no more than 3-5% of the amount of capital. This mode of trading gives a completely normal level of risk, which allows you to earn earnings consistently, and not lose money. It is for this reason that most professional brokerage platforms set financial requirements for starting capital and the cost of options at a low level. For example – the best brokers, who are considered to be market leaders and technically advanced trading platforms, set a minimum deposit amount of 10 USD, and the value of contracts at the level of 1 USD. Thus, even on a minimally available trading account, it is relatively safe to trade options.

Let’s sum up. To minimize risks in binary trading, you need only a few logical things:

• Professional knowledge and experience in trading
• A working strategy with a good performance indicator
• Discipline in terms of financial management in the process of trading

If you follow these recommendations, your deposit will be safe!

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Broker 2020!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Get Your Sign-up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

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