What is binary options trading after all?
You always wondered what those smart guys with pads, several screens and tons of graphs are doing all day long? Or maybe you want to become and trader and now seek for the information about the world you are about to enter?
In this article we will tell you all you need to know to start your path towards becoming a great trader!
What is the first thing that comes to your mind when you hear the word "trading"? - It's probably numbers, constantly changing indices, quotes and profit which is extremely hard to calculate. Another word for it is "complex". And it was, until binary options came to market. You don't have to be an expert in economics to trade profitably in binary options. As it is a form of investing, it is obviously still not a piece of cake - you'll need to spend some time learning how it works and how to make accurate predictions in order to be able to make substantial profit. However, the process itself is much easier than, let's say, Forex. The success of your trading depends on whether your prediction is correct or not, hence that trading is called “binary”.
Binary options, also known as all-or-nothing options, requires the trader to correctly predict the movement of quotes on a certain asset for preset time frame. Initially the main idea of that type of trading was to sign a contract with the particular company to be able to buy their goods/shares much later (month, half a year, year) for a preset price which is written in that contract. So after the year has passed you have to buy shares/goods for the price that has been negotiated. If at that point the price on the market for such assets are higher than you’ve set with the company, you have a chance to earn on that buying and then selling it by much higher price. If, however, the price has fallen down during the negotiated period, you have to buy it anyway, but you’ll sustain losses.
With the time passed, that kind of trading has become available for a wide range of traders with the help of binary options broker. The main point is still the same, but timeframes are less. That way you don’t have to sign any contracts or actually buy or sell anything. All that quite a time-consuming process has evolved into a click on the correct button and the deal is opened! With Ayrex you have a choice of several expiration times (timeframes during which the option is opened): from 30 seconds to 5 minutes on Short term and from 15 minutes to 60 minutes on High-low and One touch. Most forms of trading imply that an investor is actually buying an asset and his profits or losses depend on the changing value of the asset over various periods of time. In Binary Options trading, on the other hand, no real product is bought. Basics of binary options are fairly simple: based on market tendencies and influential news, a trader makes prediction about movement of prices of various assets, which most commonly are currency pairs, precious metals and stock.
To sum it up in a simple way:
- analyse the market (we will help you with that)
- make correct predictions
- open trades
- wait until the expiration comes
- get your profit and use it to acquire even more
There are plenty of trading secrets that Peter Lynch can share with you and the majority of them can be found in his 3 famous books “One Up on Wall Street”, “Beating the Street” and “Learn to Earn” and many articles that he had written over the years.
If you are still new to the investment world and looking for the teacher, Peter Lynch can be the best choice. What makes him really different from the other financial gurus is simplicity and the way he sees it. “Invest in what you know” is actually his most important mantra and really, what can be easier than to work with what you know the best.
Even the most successful traders make mistakes, but only the best of them learn their lesson from it.