BINARY OPTION
New Opportunity
You can start binary trading with low minimum deposit of just $10. Demo account ($1,000 virtual money) is completely free - no need to deposit money first.
Opening an IQ Option account offers you the opportunity to invest with a regulated and transparent broker, and on one of the most advanced trading platforms. The attractive bonuses and high payouts are unmatched and are especially valuable for traders.
BUT FIRST LETS UNDERSTAND WHAT IS BINARY OPTION TRADING & HOW IT WORKS?
One may ask what is Binary Option? Binary option in a simple definition is type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money.
In other words, it is a type of derivative option where a trader place a bet on the price movement of an underlying asset in near future for a fixed amount.It is also known as exotic options, asset-or-nothing option.
It can be explained as an investment type with a fixed return in a predetermined period of time. With only two possibilities to choose from, will asset price rise or fall. If for example you predicts that price will rise and unfortunate if fall, you will lose but mostly if one understands how to use indicators, you can win continuously.
In binary option trading is somehow straight forward because it is just a matter of put or call and wait for your time to expire, if it goes in your way, you win and at same time you can lose your money if the option you chose fail.
Beginners like binary option trading because it is straight forward but everyone has to bear in mind that this is not a game, but a real type of trading where money can be lost. Binary option holder just bets on a proposition whether certain security price will rise or fall in future date basis that he/she buys/sells certain kind of option either call/put. If trader sees bullish trend then he/she will go for call option if he/she bearish trend then automatically will go for put option.
In other words, it is a type of derivative option where a trader place a bet on the price movement of an underlying asset in near future for a fixed amount.It is also known as exotic options, asset-or-nothing option.
It can be explained as an investment type with a fixed return in a predetermined period of time. With only two possibilities to choose from, will asset price rise or fall. If for example you predicts that price will rise and unfortunate if fall, you will lose but mostly if one understands how to use indicators, you can win continuously.
In binary option trading is somehow straight forward because it is just a matter of put or call and wait for your time to expire, if it goes in your way, you win and at same time you can lose your money if the option you chose fail.
Beginners like binary option trading because it is straight forward but everyone has to bear in mind that this is not a game, but a real type of trading where money can be lost. Binary option holder just bets on a proposition whether certain security price will rise or fall in future date basis that he/she buys/sells certain kind of option either call/put. If trader sees bullish trend then he/she will go for call option if he/she bearish trend then automatically will go for put option.
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Binary options trading being simply making a true or false prediction about the direction of a market and main benefits being short-term expiration, straight-forward risk or reward profiles, defined risk and low collateral required for one to trade. Binary option contracts always settle between (0 and 100) at expiration but remember traders can liquidate the contract at any point before expiration if they can feel market might not go into their side hence limiting losses or locking in gains they have already make. This is one advantage of binary option.
Most Investors find binary options attractive because of their apparent simplicity, since traders only predicts whether something specific will or will not happen. For example, a binary option may be as simple as whether the share price of XYZ Company will be above $50 on December 30th at 11:45 am. If XYZ’s share price will be $51 at the appointed time, the option automatically exercises and the option holder gets a preset amount of cash because of correct prediction.
Another example can be one below.
Assume the futures contracts on certain company is trading at 1,040.50. An investor is bullish and feels that the economic data being released at certain time will push the futures contracts above 1,050 by the close of the current trading day. The binary call options on that assumed futures contracts stipulate that the investor would receive $ 300 if the futures close above 1,050, but nothing if it closes below. The investor purchases one binary call option for $150. Therefore, if the futures close above 1,050, the investor would have a profit of $150 ($300 - $150).
I advice you to open an account here and just practice with virtual money. They give up to $1000 on practice account
I advice you to open an account here and just practice with virtual money. They give up to $1000 on practice account
How To Open an IQ Option Trading Account
With a simple and intuitive platform and a potential payout of up to 91% in case of correct prediction, opening an IQ Option account is certainly a good place to start for an investor. This article will show you how to open an IQ Option trading account in five simple steps:
Step 1: Begin the registration process
Registering for an IQ Option account is free. To begin the registration process, head over to the official webpage at www.iqoption.com and click on the tab ‘Register’ at the top far right corner of the page.
Step 2: Fill out the registration form
Completing the account registration form will take you just 1 minute. Fill out your name, email and login password. After accepting IQ Option’s terms and conditions, you must choose your preferred account. Assuming that you have tested the platform using a demo trading account, you can elect to open a real account.
Step 3: Activate your account
Before you can sign in to your trading account, you need to activate it first. A link will be sent to your email inbox; click on this link to be able to active your account.
Step 4: Sign in to your account
You now have an active IQ Option account! To sign in, use the email address and login password you inputted in Step 2 above. You will be welcomed with a video that shows you how to navigate and trade on the platform.
Step 5: Fund your trading account
Before you can start trading on the IQ Option platform, you need to fund your account. A minimum deposit of $10 is required to fund your account. Most traders opt for the more popular $100 deposit amount, which offers a welcome bonus of up to 20%.
To deposit funds into your account, click on the ‘Deposit’ tab in your personal account. Choose your preferred payment method, currency and the deposit amount you would like to fund your account with. Once you click on pay, the funds will be immediately available in your account.
Advantages of opening an IQ Option trading account
Sophisticated trading platform- IQ Option has one of the most advanced yet simple to use platforms in the industry. While offering many unique features, the platform is useful to navigate, giving you a seamless trading experience.
Low Deposit- With just $10 in your trading account, you can start trading on the IQ Option platform.
High payout- IQ Option offers some of the highest payouts in the industry, with a maximum payout of up to 91% in case of correct prediction. Few brokers come close to offering such payout ratios.
Customer service- Reliable customer support is a good indication that a binary options broker is worth it. IQ Option has built a reputation for having an efficient customer support team that is available 24/7 and can be reached easily via email or telephone.
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Technical indicators commonly used to determine Trend direction
What is an indicator?
An indicator is a tool that helps you to predict future market movements. This definition might sound generic, but it excludes many of the things many people commonly consider to be indicative of future market movements.
Remember you can also predict the market with News events and also using economic data.
Remember you can also predict the market with News events and also using economic data.
- News events are not indicators. Many people think that the market will rise or fall in reaction to news events, but this connection is as fragile and unreliable as the connection to economic data.
- Economical data is not an indicator. Many people think that the market will rise or fall in reaction to good or bad economic data, but these events are less connected than they seem. The market often rises in reaction to bad news or falls in reaction to good news, and even if the market reacts in the way you expected, you are unable to predict how far the market will move. Economic data is a bad tool to predict market movements.
There are many more aspects we could list that are widely believed to be indicators but actually say very little about what an asset’s price will do next.
To predict what the market will do, you need a tool that helps you to understand what traders think.
- The market does not rise in reaction to positive news events or economic data; it rises when traders feel good about a news event or economic data.
- The market does not fall in reaction to negative news events or economic data; it rises when traders feel bad about a news event or economic data.
The only thing that determines market movements is the relationship between supply and demand. To predict how this relationship will develop, you have to get inside of the head of the other traders; you have to understand whether they are currently more willing to buy or to sell, and how these actions will affect the market price.
Indicators help you with this task by analyzing past market data and displaying it in a way that helps you to predict what will happen next.
To understand the basic principle behind indicators, consider this example: If you knew that a person has been stopping at a gas station every weekday and that today is a weekday, it would be reasonable to predict that this person will stop at a gas station today, too. You might not be right all of the time, but out of 100 predictions, you would win at least 90. This is how indicators work.
It is essential to follow the trends and check on the technical currency crosses that could say “Strong Buy” or “Strong Sell” (Hourly/Daily), which in binary trading means “Strong Call” and “Strong Put”.
In other words, when the trend is Up, you are buying a Call option, and when the trend is going down, you can buy a Put option.
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Technical Indicators
1. Bolling bands
How to use it?
- Choose the “Bolling bands” from the list of indicators.
- Without changing the settings, click “Apply
To check on the trend you can use exponential moving average (EMA) or simple moving average (SMA) with 100 period. This is the maximum at IQ Option.
You must set the Bollinger Bands indicator with Period: 6 and Deviation: 2. You can use same color for Top line and Bottom line.
Ensure You are trading with candle sticks method.
Call Trading(Buy)
- EMA shows an up trend
- A red candle breaks the bottom band
- You can buy a call option
Put Trading(Sell)
2. RSI
The RSI is one of the most popular oscillators which perfectly works on different market conditions and help us to define exact entrance points.
Why do we need it?
- Defines the reversal/pullback points.
- Defines the trend strength.
How to use it?
- Choose the “Relative Strength Index” from the list of indicators.
- Without changing the settings, click “Apply”
How does it work?
The RSI (Relative Strength Index) is a technical indicator and an oscillator following the price movements that ranges between 0 and 100. The RSI belongs to a group of the most popular oscillators. It is equally good for the market trends and the sideways moves. The RSI compares the latest asset price rise to the price fall and provides this information as a figure in the range from 0 to 100.
Overbuy (the indicator level is above 70%) – the market went up above the normal level and we are expecting the price will move down soon.
Oversell (the indicator level is below 30%) – the market went down below the normal level and we expecting the price will move up soon.
The RSI Strategy
- Apply the RSI indicator to the chart and choose a 26 period setting.
- Wait for a moment when the indicator clearly shows overbuy or oversell:
- Overbuy – the indicator level is above 70% a trend reversal signal for buying the put option. .
- Oversell – the indicator level is below 30% a trend reversal signal for buying the call option.
What is Candlesticks, Trend and Resistance in Trading?
Candlesticks
The most fundamental type of indicator is candlesticks. Candlesticks are a form of displaying market movements in a price chart. Each candlestick aggregates an adjustable period of market movements. Candlesticks form simple and complex candlestick formations that allow you to anticipate what the market will do next.
Trends
The market moves in trends. Trends are zigzag movements that take the market into a certain direction by creating consecutively higher (in an uptrend) or lower (in a downtrend) highs and lows. By recognizing these trends and profiting from them, either as a trend follower or a swing trader, you can make accurate and reliable predictions about future market movements.
Resistance and support levels
Resistance and support levels can set strong limitations to the market movements: They work as barriers the market cannot break through. Recognizing these barriers can provide you with great insight into what will happen next.
