Start trading binary options. Important Rules

Binary options trading today has become the only or main source of income for many. At the same time, about 20-30 years ago it was difficult to start trading binary options and financial assets. In particular, ordinary people could not buy and sell stocks, currency pairs , futures ( cryptocurrencies did not exist at all), since they did not have direct access to exchanges and brokers. Now these and other difficulties have been eliminated, but some beginners still do not know how to prepare to start trading binary options, which we will talk about later.

The right start in binary options for beginners

Despite the growing popularity of stock trading, few people know where to start and how to trade binary options. To solve these issues, it is necessary to delve into the essence of the concept of “stock trading”, but, as practice shows, many people diligently avoid this method of earning money for fear of the unknown or losing money.

You can get rid of these fears by starting to trade binary options on a demo account or in small amounts (the minimum deposit with most binary options brokers is $5):

As they learn to trade , gain experience and deepen their knowledge in the field of exchange trading, each beginner will learn to develop their own effective strategies that will allow them to earn income from transactions with trading assets.

When figuring out where to start trading binary options and how to make a profit from it, beginners should pay attention to special tools that are adapted for inexperienced traders. In particular, not only a demo account, but also free binary options tournaments help you gain your first trading skills. Brokers such as Pocket Option and Binarium provide the opportunity to participate in such tournaments.

Binary options trading today is available wherever there is an Internet connection and most brokers offer clients mobile versions of their trading platforms . But the beginning of binary options lies not in finding a company through which the client will trade on the stock exchange, but in becoming familiar with the essence of digital contracts. The beginning of binary options is different for each trader. Some of the players who started trading digital contracts already had experience working with securities and other assets. It is easier for these traders to understand the features of binary options, where to start and how to make money on this type of activity. However, even such players must go through several steps to learn how to make a profit from digital contracts. However, novice traders must go through at least nine steps in order to gain the necessary knowledge and experience to trade binary options.

Basics before you start trading binary options

Unlike other financial assets, binary options start with practice. That is, to make a profit from trading digital contracts, you need to engage in trading, and not waste time studying the specifics of this type of activity. However, in this case it is impossible to do without training completely. To start trading binary options, it is recommended to understand the following topics:

• What are binary options ;
• How do binary options differ from the Forex market ?
• Why binary options can bring high profits;
• How high profits affect trading risks;
• How deals are made.

You should also pay attention to books on trading and additional training formats such as webinars, online courses, feature articles, and so on. But books for binary options traders act more as a source of necessary information, rather than as a guide to action. All the knowledge, skills and experience you get from real trading, when you have to risk your own money. This is what forces a person to competently build a trading strategy, so in addition to books, it is worth practicing on the broker’s platform in order to better begin to understand the trading process and how the terminal works:

All information about binary options, where to start and how to trade, is freely available. In particular, open sources make it possible to understand the terminology used by professional traders. This information can be found in the Trader's Dictionary .

Choosing a broker to start with binary options

The right start to binary options also lies in issues related to choosing a broker. This is explained by the fact that traders work with digital contracts exclusively through specialized companies. The broker provides its own platform with the tools necessary for trading binary options.

The effectiveness of trading largely depends on how correct the choice of broker turned out to be. For example, this allows you to minimize the risk of losing money. When choosing a broker, you should focus on several criteria:

1. Reputation and experience (term) of work. Before registering on the site and transferring money to a broker's account , you should check the information about the company. In this case, it is also recommended to pay attention to customer reviews left on third-party resources. The information about activities that the broker posts on its website does not always correspond to reality;
2. Company characteristics on regulators' websites. On these sites you can find out, for example, that a particular broker was previously blacklisted as fraudulent brokers due to illegal manipulations. An example of such a regulator is the organization TsROFR :

3. Trading conditions. To begin with, it is recommended to open binary options with a minimum bet ($1). In this regard, when studying brokers, you should pay attention not only to this parameter, but also to the size of the minimum deposit that the trader must make;
4. Methods and terms for withdrawing money from the deposit. It is optimal if the broker allows you to transfer money not only to bank cards or accounts, but also to electronic wallets such as Yumani, Webmoney and Qiwi. Also, the withdrawal period should not last longer than one week (with the exception of bank transfers);
5. Types of binary options supported. The most popular type of binary options are Call/Put contracts (that is, a game for up and down). Such binary options, considered optimal for novice traders, are offered by all brokers. But some companies provide the opportunity to work with other types of digital contracts. In particular, the Deriv broker and the Alpari broker offer a very large selection of options;
6. Platform type and interface features. To begin with, it is recommended to buy binary options on sites with a simple and clear appearance. As you gain experience, you can move to platforms with detailed charts like MetaTrader 4 or TradingView . In the image below you can see an example of a binary options broker's trading platform :

Replenishing your deposit to start with binary options

To begin with, it is recommended to buy binary options with a transaction amount of $1. This threshold is the minimum for most brokers. However, despite the above recommendation for binary options on where to start trading, transactions even with a minimum amount should be made wisely. This becomes possible due to compliance with the rules of money management and risk management , which are mandatory for all traders. To understand this key feature of working with digital contracts, you can consider the following example, where the chosen strategy includes a transaction risk of 7% of the deposit. The trader opens trades with a minimum bet of $1. Based on these parameters, you can calculate how the risk changes in the event of a series of unsuccessful operations for different deposits:

For greater clarity, the results can be displayed graphically:

The presented results show that within the framework of the chosen money management it is impossible to use a starting capital of $15. In this case, when concluding two losing trades in a row, the third one will violate the MM rules. If the deposit is increased to $20, the number of unprofitable trades that a trader can enter into increases to six. And if you invest $50, this figure will reach 36 transactions. That is, the larger the investment, the less likely it is to lose the deposit. A trader will not be able to make 36 or more unsuccessful trades in a row. In such situations, users are more likely to stop trading and reconsider their chosen strategy.

Based on the data obtained, before starting binary options trading, you should immediately abandon trading with minimal investments, even if the trader has no experience with digital contracts.

The above example should show novice traders that working with minimal deposits is fraught with loss of money. Moreover, this can happen even if the requirements of the chosen strategy are strictly met. It is optimal if the deposit size exceeds the bet by 50-100 times (that is, with an investment of $50-100, the transaction should be $1). Under these conditions, the trader has many opportunities to experiment with the chosen strategy.

Verification of a trading account before starting binary options trading

Verification is not always mandatory, but an important procedure for confirming identity for many traders. To complete it, after registering on the website, the broker needs to send some documents, the list and format of which is indicated on the resource. Verification is most often necessary to prevent clients from opening multiple accounts and using fraudulent earning schemes. Also, after completing this procedure, you can get benefits from some brokers in the form of bonuses for binary options .

Choosing a Binary Options Trading Style

There is often a misunderstanding among binary options traders about where to start trading. More precisely, which binary options trading method to choose. It is impossible to solve this issue unequivocally. But there are a number of criteria that must be met when selecting a trading method:

• The type of binary options the trader will work with;
• The time that a trader is willing to devote to trading;
• Trading style - aggressive (high risk, but more profitable) or slow (less risky, but less profitable).

Before starting to trade binary options, many novice traders fall into a trap, as they begin to think that binary options are the simplest way to make money. As a result, they choose an aggressive trading style (usually binary options scalping , which involves trading with a very short expiration ) in the hope of making money quickly:

The image above shows potential trades that could generate very large profits using a very short expiration (30 to 60 seconds), but everyone would likely agree that it is almost impossible to guess every price reversal as done on the chart. and most often the situation looks like this:

When starting to trade binary options, you should choose contracts with predictable risk. That is, it is better to work with digital contracts on assets whose prices are not subject to strong volatility . Because of this, novice traders should avoid turbo options. This type of contract requires serious psychological preparation from users. This is explained by the fact that when trading turbo options, the trader must make a decision within a few seconds.

At the initial stage, you should not open trades on binary options timeframes of less than five minutes, since instead of accelerating the deposit , this will most likely lead to a “drain” of the deposit . Inexperienced traders should also not open trades on many different assets at the same time. It is best to start buying binary options on several currency pairs. In this case, the number of transactions, as well as the amount of earnings, will be relatively small. However, with this approach the trader will experience less stress.

Choosing a trading strategy for a successful start in binary options trading

Despite the fact that many Internet users compare binary options trading with playing in a casino , these concepts are in no way related to each other. It is impossible to make money on digital contracts by guessing the direction of price movement. The success of all transactions directly depends on the correct choice of trading strategy (TS). This is a mandatory condition for all traders, despite the fact that the essence of this type of activity comes down to determining the direction of movement of the price of a certain asset.

The apparent simplicity of binary options trading often leads to traders placing positions at random. But in most cases this approach is unsuccessful and the deposit is spent as quickly as possible. Therefore, it should be emphasized once again that the effectiveness of binary options trading directly depends on what strategy the trader follows.

There are many strategies for binary options. Moreover, trading strategies are constantly being improved and adapted both to current conditions and to the characteristics of a particular trader. The simplest and most well-known strategy is to use two moving averages with different periods:

Each chosen method should first be tested on a demo account. If the strategy has proven its effectiveness, then this TS can be used when working with “real” money. But even in this case, the chosen approach must be adjusted taking into account current conditions, since the market is subject to constant changes.

It is recommended to select a strategy taking into account your trading style and timeframe. You should also consider your own skills and abilities. At the initial stage, you can pay attention to the following strategies:

1. Indicative. Indicators for binary options are convenient because they give fairly clear and timely signals showing the right moment to open a trade. However, this strategy has a significant drawback. The market is subject to sudden and sharp fluctuations, which can cause indicators to give false signals. As a result, an unprepared trader who starts trading binary options may start losing money. But indicators help novice players get comfortable in the market and understand the features of working with digital contracts. After this, you can start trading using technical analysis and other trading methods . Indicators for beginners can be considered: Stochastic Oscillator , RSI , MACD , Bollinger Bands ;
2. Strategy based on graphical analysis. Graphical analysis of binary options includes Price Action and candlestick analysis . In such trading, traders use Fibonacci correction levels, trend lines, chart patterns and other tools. Working within such strategies requires certain skills. In particular, a trader must be able to mark charts, which introduces a certain subjectivity into the analysis. That is, users can see a figure showing the direction of the price where it actually does not exist. This directly affects the efficiency of concluded transactions. To prevent this from happening, you can use special graphical analysis indicators like Price Patterns , which automatically finds patterns on the chart. To correctly identify candlestick patterns, you can use the Japanese candlestick indicator ;
3. Combined trading strategies. When trading binary options, many traders combine several strategies. For example, Bollinger bands help determine the moment of price reversal, and candlestick patterns are used as an additional filter that filters out possible erroneous signals. Also, any of the strategies can include determining the trend or levels, which can also be helped by a selection of trend indicators and level indicators . Combined strategies are mainly used by experienced traders, while beginners often focus on one instrument.

An example of a combined strategy, where a trend is first determined, and then an analysis of the found pattern and possible subsequent price movement is performed:

Starting binary options trading and analyzing results

You can find out the history of transactions by accessing the corresponding section in the trading terminal or personal account. However, when choosing a binary options trading strategy, where to start and how to behave in the market, you should also take into account your own experience. To do this, it is recommended to regularly fill out your own trader's diary , reflecting in it a list of concluded transactions and all the necessary information. This rule is relevant for both beginners and experienced users.

Such a diary can be kept in any form. The main thing is that the recorded information is detailed and understandable for the trader. It is recommended that the diary reflect the time the transaction was opened and closed, the characteristics of the transaction, the direction of the price and the reasons for purchasing the binary option.

The diary is convenient because it provides up-to-date data for market analysis. It allows you to find out:

• the type of currency pairs that will not currently generate income;
• the least effective days and hours to enter the market;
• the first signs that the chosen strategy is not bringing results.

The diary should be kept from the first day of trading binary options:

Trade data	Trade statistics

The tactics of a trader’s behavior in the market are determined depending on the prevailing conditions. If the chosen strategy brings positive results and the deposit is constantly growing, then you can:

• withdraw all money from the deposit (if the trader plans to continue making money on binary options, then this option is undesirable);
• invest part of the money earned in new operations;
• reinvest all earned money into trading.

Beginner traders are recommended to stick to the second option: invest only part of the profit in new transactions. This approach has a positive effect on the psychological state of the user. Thanks to partial reinvestment of earned money, the trader sees a positive return from trading and has the opportunity to increase the amount of income. At the same time, this approach limits the rate of deposit growth. At the same time, it is recommended to regularly adjust the chosen tactics. For example, if the deposit is constantly and steadily growing, you can reconsider the strategy and choose an option with greater risk that can increase the amount of income. In particular, this can be achieved by a stepwise increase in the rate in proportion to the growth of the deposit.

Recommendations before starting binary options trading

By following a few simple trading tips, a trader can reduce the number of losing trades. Also, thanks to these tips, it is possible to avoid many mistakes typical for novice users.

Asset volatility

Volatility is one of the main parameters that must be taken into account when working with binary options. This indicator changes noticeably throughout the day. Volatility directly depends on the type of open trading session . In particular, maximum price changes are observed during periods when American and European exchanges operate:

The nature of market behavior can be divided into two large groups:

1. highly volatile, when the value of an asset changes rapidly;
2. flat, in which the trend moves slowly.

Separate strategies have been developed for each case:

1. Using a trading strategy designed for a slow market, you should look for entry points on the chart after the end of the American session. In such cases, traders carry out most of their operations at night. However, brokers often reduce the interest on payouts in a slow market.
2. Strategies designed to work in highly volatile markets cannot be used at night.

It should be noted that low volatility is often observed during the European and American sessions.

Exotic currency pairs

Most inexperienced traders do not understand where to start trading binary options. More precisely, players cannot decide on the type of currency pairs for which they need to enter into a digital contract. Today brokers offer access to more than 100 types of assets. However, there are no universal trading strategies that allow you to enter into transactions with each of them.

For example, the selected TS gives 65% of successful transactions on GBP/USD and EUR/USD pairs. But the same strategy can bring losses when trading commodities or precious metals. This difference is observed mainly in cases where a trader uses indicators. Strategies based on candlestick patterns and graphical analysis demonstrate greater efficiency when working with different assets.

It is dangerous for novice traders to trade exotic currency pairs. Such assets are subject to the influence of geopolitical factors, due to which the price can rise or fall quite strongly in a very short period of time (in this case, the so-called gap is formed). On the chart, this is expressed as follows: the trend line does not change its direction for many days, but after the release of certain news it rises sharply up or down. The rise or fall in price in such cases is measured in hundreds of points:

The use of exotic currency pairs is also not justified due to the peculiarities of binary options. The amount of profit on BO does not depend on how much the price has changed. In this case, it is important to guess the direction in which the trend will move in a given time period. Therefore, there is no point in taking additional risks by trading exotic currency pairs.

Complex trading approaches

The list of trading strategies is not limited to those given earlier. This list is constantly updated with new vehicles, some of which can be classified as complex or professional. Similar techniques do not work with binary options. To make money on BO, it is important to determine the moments of entry and exit into the market and quickly process signals from indicators and other tools.

For example, when trading financial assets, some traders use wave analysis (Elliott waves). Within the framework of this technique, the following rule is applied: the main trend movement is shown by 5 waves, the corrective one – 3. But on a chart that changes in real time, such an analysis cannot be carried out, since it is not possible to identify a point for opening a transaction. That is, using this strategy, the trader will not be able to understand when to buy binary options:

When trading binary options (this is especially important for novice traders), it is important to adhere to simple and understandable trading strategies that generate income. By using non-standard approaches, the user significantly reduces the chances of earning money.

News and fundamental analysis

The economic calendar is an important fundamental analysis tool for all traders, which shows the date and time of news releases that can affect the state of the market. In particular, if it indicates that US GDP data for last year will soon be announced, then trading should be suspended for the time being. This information directly affects the dollar exchange rate and a number of other assets. Moreover, some data on GDP or other similar information can trigger a sharp rise or fall in the price of an asset, which interferes with making money on binary options.

The essence of trading on BO is to correctly determine the direction of the trend in a given period of time. How much the price changes does not affect the amount of earnings on binary options.

In the economic calendar, it is recommended to mark news related to the following topics:

• employment and unemployment rates;
• changes in interest rates set by Central Banks;
• inflation and GDP data;
• election results, decisions of regulators (central banks) and governments;
• comments from top government officials on the state of the economy.

The last point is especially important for traders who trade cryptocurrency. Negative and positive news related to virtual coins can lead to a sharp price change of 10% or more in just a few hours.

Signals for binary options

Considering the features of binary options and where to start working with these digital contracts, many experienced traders point out that you need to pay attention to signals when making decisions. This tool greatly simplifies trading. On our website you can find:

1. simple signals for binary options ;
2. signals based on candlestick patterns .

It is recommended to check each trading signal on the current chart. Moreover, this tool can be used as an additional hint. That is, the final decision should be made based not only on the readings of a specific trading signal, but also on the results of your own market analysis. But you shouldn’t give up such tools.

Trading advisors and robots for binary options

Trading advisors mean binary options robots , or special algorithms that use subtle filters and settings for market analysis. In practice, this tool can be useful for a trader. This is explained by the fact that such robots analyze changes in the market using the entire trading history of specific currency pairs.

However, you cannot blindly apply the signals that such algorithms provide. The information provided by trading advisors should also be verified on the chart. In particular, not all robots are capable of processing news that affects the movement of the exchange rate.

Conclusion

Trading binary options is a relatively simple way to make money. Transactions with digital contracts are carried out through special terminals that have a convenient and intuitive interface. The conditions for making a profit from binary options trading are simple. Essentially, the work in this case comes down to the fact that you need to determine in which direction the chart will move and the time during which this trend will continue.

But despite its apparent simplicity, the success of binary options trading directly depends on the effectiveness of the chosen strategy, the experience of the trader, the correctness of the analysis and other factors. It is also equally important to have appropriate psychological preparation and avoid typical mistakes of novice players.

See also:

Binary options are a scam

Educational videos

Indicators for binary options

Strategies for binary options

Best Binary Options Brokers