Digital options trading is referred to by some as “all or nothing” investing. The reason for this is simply that with each trade you either earn a pre-determined profit amount, or lose the exact amount of your investment. For many, such a setup is much more appealing than the varying profits and losses offered within the traditional markets. This is one of the reasons for the explosion in the number of individuals who trade binaries.
If you are one of the thousands who are just getting started, you’re likely to have some questions. Below are some of the most common questions asked by new traders, along with detailed answers for each.
How Do I Trade?
The basic digital options (Call or Put) trade is extremely simple. Your goal is simply to predict whether the price of your selected asset is going to be higher or lower than the entry price when the trade expires. “Call” will be a prediction of a price increase. “Put” will be a prediction of a price decrease. You only need to select your asset, enter your prediction, select an expiry time, and decide upon an investment amount. Enter these selections in the trade box, submit your purchase, and you’re done. When the expiry time ends you’ll know immediately whether you earned money or not.
How Do I Forecast Price Movement?
You never want to guess future price movement. What separates digital options trading from gambling is the ability to influence the outcome of the trade by performing analysis. There are plenty of resources that will help you to forecast the upcoming price movement. Live price charts and market news are the best tools for beginner level traders. There are more complex charts and technical tools that can be used, but there is no need to worry about these when first getting started. Asset prices are influenced by a number of factors, so stay on top of market news and then watch how each report impacts the price of related assets.
How Much Money Will I Earn?
There are many different factors that will determine how much money you earn while trading digital options. These include variables such as return rates, investment amounts, trade volume, win/loss ratio, whether you complete analysis, and more. Some choose a slow and steady approach to investment, which allows for stable profit growth and easy to absorb losses. Others are more impatient, entering into large trades and taking on more risk. At the end of the day, what really determines how much money you earn will be the decisions you make.
Are Digital Options Right For Me?
It is not uncommon for individuals who have participated in various other forms of trading to question whether or not they want to try to trade digital options. It is important to remember that Forex, CFD, spread betting, and traditional market trading are quite different in what they offer. Even though previous trade experience is not required, many current and former traders who have used other forms of investment often find themselves at an advantage when trading digital options.
For those who have never traded before, you’re in the right place. Digital options are by far the simplest investment tool available today. Anyone can learn how to trade in an hour or less and anyone can profit if they only take the time to perform accurate analysis. If you want to earn money quickly without coping with fees, commissions, and a massive learning curve, then yes, binary options are right for you.