Simple Moving Average

In technical analysis the most commonly used type of moving average is the simple moving average (SMA), which is sometimes called an arithmetic moving average. It is referred to as ”simple”, because it uses a simple way of averaging. A SMA is usually constructed by adding a set of data and then dividing it by the number of observations during the period, which is being examined.
How to estimate the value of a simple moving average?

In order to estimate the value of a simple moving average, we need the following:

First, to define a number of trading sessions (periods), which will be used in the calculation. Let us use the 10 most recent trading days (sessions).

Second, to decide what type of prices we shall use. Most moving averages of prices are based on closing prices, but these averages could also be estimated with the use of highs, lows, daily means etc. Let us use the closing prices in our case.

Third, to calculate a simple average value of these prices.

Let us look at the following graph (graph 1).

On the chart above we can see a 10-day simple moving average (the black line), with its value shown in the red rectangle (0.8921). The marked candles represent the periods (10 days, because we use a daily chart), which closing prices take part in the calculation of the SMA. We count the candles in the opposite direction, because moving averages take into account the most recent number of periods. The most recent green candle has no SMA, because the trading day is not over yet and, respectively, there is no closing price. Therefore, it cannot be used in our calculation. Tomorrow, in order to estimate the SMA value, candle 10 will be replaced with the current-day candle, which will already be closed. It is how the moving average indicator moves across the graph.

Now, let us present the close prices of the 10 marked candles. We have to sum all the close prices and divide the sum by the number of periods (days).

Trading Day	Close Price
1	0.87777
2	0.88196
3	0.89143
4	0.89649
5	0.90522
6	0.89942
7	0.88975
8	0.88993
9	0.89257
10	0.89665
10-day SMA	0.89212

So, the 10-day SMA has a value of 0.8921, exactly the same as shown in the rectangle above.
What do we mean when saying that the SMA is moving across price action?

Let us move one day back and imagine the same situation as above. Now candle number 1 on graph 1 will not be taken into consideration when calculating the new SMA, as it has not yet closed. At the same time, we should take into account the candle, which stands before candle number 10 on graph 1.

Trading Day	Close Price
1	0.88196
2	0.89143
3	0.89649
4	0.90522
5	0.89942
6	0.88975
7	0.88993
8	0.89257
9	0.89665
10	0.89450
10-day SMA	0.89379

So, the new 10-day SMA has a value of 0.8938. What can we observe in the table above? It seems that all the close prices remain the same with the exception of just one – that of the 10th day. Tomorrow, when calculating the SMA, the trading platform will replace candle number 10 on graph 1 with the most recent candle, or the candle for the current day.

Beginner traders should note that simple moving averages can be calculated for different time frames. In case we use a 15-min chart, where each candle stands for a 15-minute period, the SMA indicator will show the average closing price for the past 10 periods, or 150 minutes. If we apply the SMA on a 1-hour chart, it will show the average closing price for the past 10 hours. This, of course, will be valid, if we keep the period number unchanged.

Simple moving averages may differ in length

We can construct moving averages of different lengths. On the next graph we can see another moving average, a 20-day SMA (the red line). It is calculated by adding the 20 most recent closing prices and dividing the sum by 20.

Some of the most popular daily moving averages are for the periods of 200, 80, 50, 30, 20 and 10 days. These periods are considered as arbitrary and were chosen in the days before the invention of computers, when calculations had to be done by hand.

The 10-day, 20-day and 80-day moving averages represent approximately two weeks, one month and four months of trading data respectively.

Longer moving averages usually pick up changes in a trend more slowly, but yet, it is less likely that they will give a false signal for a trend change, because they represent a greater number of data observations, or more information. The more data we include in the calculation of the SMA, the less important each day’s data becomes in this calculation. A large change in the value of data during one day would not cause a large impact upon the longer-term moving average.

If we look again at the graph above, we can notice that the 10-day SMA demonstrates more variability than the longer, 20-day SMA. The latter is said to be the slower, the lazier moving average. It provides more smoothing, but it is also slower at indicating trend reversals.

SMA and the trend

Moving averages are valuable, as they smooth daily fluctuations, allowing the technical analyst to see the underlying trend without being distracted by the small (daily) movements. A rising moving average usually signals an uptrend, while a falling moving average indicates a downtrend. Some analysts have adopted the following approach, when it comes to relating the SMA with a particular trend: If the close price of a tradable instrument is above some simple moving average, then the trend must be bullish. If the close price is below some simple moving average, then the trend must be bearish. However, choosing a period for trend estimation is a matter of personal preferences. The period of the SMA will depend on one’s trading style and time frame for trading. Thus, choosing the appropriate period comes with experimentation and, of course, experience.

Despite that simple moving averages provide help when identifying a trend, they do so after the trend has begun. Therefore, moving averages are lagging indicators, as they are based on past prices.

Stock Trading Binary Options

The popularity of Stock Trading is growing higher and higher within the traditional market and binary options market. More and more binary options traders depend on stocks, because it’s easier than you think to determine their own short-term movements. Needless to say, this doesn’t mean easy money; because you can risk and you will be prepared to lose some profit in case this trade doesn’t close as part of your favor.

One of the simplest strategies of which binary options traders use is finding a stock which has gained some momentum and betting that it will reach a certain price before this expiry. Of course, this sounds way too simple, but it is the most fundamental strategy to win money by trading stock in binary options platform.

Global Stocks Trading

Trading stocks might sound like the simplest way to invest your money in the binary options market, but there are some things you should know before taking this step. First of all, stocks are different from nearly all assets that is usually traded on the binary options market. You should understand that some foreign stocks and shares, for example U.S. stocks, are only available for investing during specific hours. This means that you won’t be able to trade 24/7 and your trading activities will likely be limited to a specific time window.

Another significant fact is that brokers have taken some measures to make sure that trading stock binary options isn’t simple. As we stated earlier, trading stock binary options is available at certain times. However, many brokers won’t enable their clients create a trade at least half an hour before the market opens – in this way the traders are not able to trade stocks during the time in which they may be the most volatile.

Trading Stock Binary Options

Trading stock binary options can be a powerful way to gain your profits, especially if your trading portfolio has room for brand new assets. Of course, you must approach these options very cautiously, because it is essential that you select the right stocks and create a fool-proof-trading plan that you’ll follow closely. There are four principal factors, which have a great impact on the value of the major stocks:

Market Sentiment – if the markets are miserable and the global economic climate is humble, investors won’t spend their money on stocks and therefore their value will fall.

Earning Reports – Good or bad earning reports often cause a rapid movement of the value of certain stocks

Mergers & Acquisitions – These events typically lead to positive results, so you should always expect a stock’s price to increase when one of these two events happens.

Government Policies – Some stocks may be influenced by different government policies.

How you can Trade Stock Binary Options

The 1st step is to identify with what direction the stock will head after a news release affecting the share price on the company in question. Via there, the trader is free to choose any binary options trade type to install his trade profile. As an example, an earnings report can result in a sustained response that lasts for a lot of days. In such a scenario, the trader can decide to trade the Touch/No Touch option, using a correct price barrier while having into cognizance any latest supports or resistance levels. If there is a very strong news release that will cause the share price of any company to spike in different direction, the trader can decide to trade any of the high-yield option varieties. For example, the sudden announcement by the CEO of JP Morgan around the trading losses recently sustained on its positions is the kind of news release that can result in a move so hard which it could breach the price barriers on the high-yield option types. It is ultimately nearly the trader to determine what type of trade will suit this news release he wants to trade.

Final Word of Stock Trading

Trading stock article takes some understanding of how stocks behave in order to profit from it. Stocks constitute one of the asset derivatives that can be traded on the binary options market. Usually, a trader will have access to trade hundreds of stocks, as brokers will list several stocks from the different stock exchanges across the world.

A good spread will include stocks from the three American Exchanges, the London Stock Exchange, and the Stock Exchanges from Germany, Spain, Switzerland, the Eurostoxx Exchange (which contains stocks of companies in the Netherlands, Belgium, and other central European nations) as well as stocks from some selected Middle East exchanges. This gives traders and unbelievable spectrum of stocks to change.

Support and Resistance Strategy for Binary Trading

In which the breakout strategy required you to identify levels of support and resistance and wait for a breakout point, the support/resistance strategy will need you to identify them and then utilize pattern in the levels. How can you are doing that? Read on and discover.

What is the support/resistance strategy?

The support/resistance is a short-term strategy that can help you utilize the levels of support and resistance to your great merit. How is this particular possible? It’s rather simple, really. When the price tests the actual support/resistance, it can go in and the opposite direction. This is where by you enter the actual trade – following the price features tested the levels. Of course, this particular doesn’t guarantee anything, but it leaves you using a nice chance connected with winning.

60-second binary options tend to be fast-paced trades so you should be quick about it but not let yourself fall in a pattern of just waiting and looking at the charts as you might miss as soon as and enter the trade in a very wrong time, when the price is just about to reverse directions again. You need to be really quick so as to utilize this strategy in order to improve your chances of winning. Speed isn’t everything, though. It’s also crucial that you study the chart and establish previous patterns prior to enter a trade. The more information you have, the more likely you can be successful.

What do you need to realize to make this strategy work?

The required skill set here is pretty in the same as the one required through the breakout strategy. You need to find out at least basic technical research. You will have to examine charts, so you need to know the type of chart your broker is using. The most popular today are the candlestick and bar charts and they are the ones you should utilize since they show you lots of information and ensure it is easy to establish a support and resistance level. Of course, you also need to determine what support and resistance are and how you can establish them.

When the price can’t go below a certain level, we call that a support level. In order to establish support, the price has to consistently be unable to breach that level. In the case of support, it’s the same, but the price can’t above a certain value. Once more, this phenomenon has to be observed several times in order to establish it.

The best thing about this strategy is that it gives you a great chance of success if you’re quick enough. Usually when the price tests the level of support/resistance (which means reaching it without breaking it), it goes in the opposite direction, which is when you should enter the trade. You need to be quick, though. Enter too early and you may hit it right when it tests the level, which means that it will be at its highest/lowest and you will lose (unless you’ve made the right call, which is not likely if you screwed up your timing). Enter too late and you may hit the reversal when the price had changed direction, gone up or down, and now is reversing it again.

It’s important to note that levels of support/resistance are established when there are relatively small price movements. The price will move between the support/resistance levels and these movements can be quite fast, albeit insignificant in the long scheme (because there is little trading of the underlying asset, the price is stable in the long run which means that these fluctuations aren’t relevant for long-term investors).

What this means is that you need to be precise and make quick decisions, as well as enter trades at the right time. The safest time to enter is right after the support/resistance has been tested. This is when the price is sure to be in the opposite direction at least for a little while. If it’s tested the support, then place a call trade because it’s likely to go up. If it’s tested the resistance, place a put because it’s likely to go down.

In order to minimize the risks, you shouldn’t trade more than 5% of your capital. All in all, there is no such thing as a “sure strategy” so you need to always be prepared for the possibility that you will lose.

Call and Put Options

Binary Options – Win or Lose?

As we have already mentioned at an earlier stage in our tutorial, the concept of binary option trading is quite simple, because the trader doesn’t have to make many choices. In fact, your job as a trader is to choose whether to play your money on a Call option or on a Put option.

Call Option

Let’s say that you’ve picked an asset that you want to trade and you’ve already read the data provided by the technical tools. You’ve analyzed all the information and recent financial news and you’ve reached to the conclusion that the asset’s price will go up in the next hour. In this case, you’ll have to place a trade on the asset and select the Call option. SelectingBinary Options – Win or Lose?

In fact, your job as a trader is to choose whether to play your money on a Call option or on a Put option.You’ll learn when to play with a Call option and when to play with a Put option just in a few minutes. Call/Put options are some of the simplest ones and they are currently one of the best ways to begin your binary option trading career due to their simplicity and easiness.

Choosing the Call option means that you are predicting that the asset’s price will go up before the expiration time comes. Here’s an example how trading with a Call option works. A trader selects the USD/JPY currency pair which is currently valued at 99.147. The trader predicts that the pair’s price will go up in the next hour, so they places a trade at 12:00 by selecting the Call option and sets an expiration time of 1 hour.

If the price of the USD/JPY currency pair is above 99.147 at 12:59, then the trade will expire in the money and the trader will receive his payout. Respectively, if the price is below 99,147, the trade will expire out of the money and will lose their investment.

Put Option

Remember the scenario we mentioned above? This time we will make the following change – let’s say that after selecting the asset and performing technical analysis, you’ve decided that the asset’s price will go down in the next hour. In this case, if you want to place a trade, you’ll use the Put option. Selecting the Put option means the trader is predicting that the asset’s price will go down before the expiration time.

A trader has selected the USD/CHF currency pair for their next binary option trade. Currently, the pair trades for 0.922. After performing technical analysis, the trader has reached to the conclusion that the price of the currency pair will go down in 2 hours. Due to this reason, the trader places a trade at 14:00 on USD/CHF pair using the Put option.

In this scenario, the trader predicts that the price of the asset at 15:59 will be below the strike price of 0.922. So, if at 15:59, the price of the USD/CHF pair is below 0.922, then the trade will expire in the money and the trader will collect the pre-determined payout. If the price is above 0.922, then the trade expires out of the money and the trader loses their investment.

Conclusion

Call/Put options are some of the simplest ones when it comes to binary options. They are also the best way to make your first steps in the world of binary options trading. We suggest you to stick to this type of binary options until you gain some experience and confidence in your skills. When you feel you are ready to make the next step, you can try trading other types of options by using real money. Don’t forget to always use a demo account when trying out new types of options!

Creating a Real Money Account

If you think you already have sufficient knowledge to start trading binary options using real money, then it is time to teach you how to register a real money account. Some brokers have combined accounts which allow you to trade with both fake and real money, but some binary options operators will require you to register separate accounts.

If this is the case with your broker, then you probably know that registering a demo account is an easy process that doesn’t require much information. However, registering a real money account can be a bit more complicated, because you’ll be asked to input additional information about yourself, as well as some extra payment details, etc.

Requirements: 

- Username
- Password
- Email
- First & Last Name
- Country
- City/State
- Postcode
- Preferred payment method
- Account currency
- Phone number

Payment Methods & Payment Details

Some brokers will require more information than others, but in most cases you’ll be asked to provide the following information:

When you register a real money account, you’ll have to choose what the primary currency of your account will be. Usually, you can choose between EUR and USD, but some brokers will allow you to choose from other currencies as well. Make sure all the information you fil in is correct, because you may be asked to verify your identity or the information may needed for other purposes such as phone support, email support, recovering a lost password, etc.

One of the main things you should keep in mind when choosing a broker is the payment methods accepted by the binary options operator. Make sure there is at least one payment method, which is available in your county. Almost all brokers accept withdrawals and deposits via credit/debit card and wire transfer. Of course, the most reputable ones also provide their customers with additional choices such as depositing/withdrawing money via check, Skrill, Neteller, WebMoney, etc.

Another thing you should always check is whether your broker has any fees for withdrawing and depositing money. The best brokers won’t charge you anything when you deposit and withdraw money, but in some cases you may find yourself using the services of a broker which will charge you $10-$15 for withdrawing money.

Don’t be worried if your broker has a fee for money withdrawal – this isn’t a major problem, especially if you are trading with large amounts of money. Of course, if your bank balance is smaller and you are working on a tight budget and every dollar is important for you, then it is probably a good idea to choose a broker that has smaller or no fees at all.

In most cases your money will be instantly deposited in your account, but depending on the payment method you use, the broker may need a few days or even a few weeks to validate the transaction and to make the money available in your account. For example, depositing money by check can sometimes take 3-4 days. In the meantime, depositing money via credit/debit card will almost always result in an instant transaction.

Opening Binary Options Account

I’ve Chosen a Forex Broker, What’s Next?

We hope the previous two articles were helpful enough and you’ve managed to choose a binary options broker that offers a good rate of returns, a wide list of technical tools and a flexible trading platform that is accessible from any device. Now that you are finished with this task, it is time to register your account. Registering an account is usually a pretty simple process, but it make take you some time to complete the process depending on the requirements and security measures of the broker.

Account Requirements

The details you’ll have to type in during the registration are usually pretty simple and quite common, because they are usually required by most websites. They include your first and last name, country of residence, preferred currency, password, email and preferred payment method. In some cases you’ll also be asked to leave your phone number which will be used to either confirm your identity, or get support over the phone when needed. Support over the phone has become a rather popular thing among binary options brokers and nowadays many operators take advantage of it in order to provide the traders that use their services with a quick, convenient and easy way to contact the support staff. Some brokers will ask you to input payment information when you sign up, but this is not so common due to the fact that many traders prefer to use a demo account first.

Account Type

Most brokers allow you to register two types of accounts – one with real money and one with fake money. The one using fake money is the so-called demo account. We strongly suggest registering such an account, because it is the most convenient and safe way to learn binary options trading, to get familiar with the trading platform and test your first trading strategies. If you opt for a demo account, then you won’t be asked to input any payment information and you’ll be most likely redirected to a page where you’ll be able to access the trading platform either by download or via your browser.

Verifying Your Account

Most brokers have very strict security measures when it comes to account registration, because they need to prevent several things:

- Money fraud
- Prohibit people under 18 years of age from trading

- Identity theft

This is why some brokers will require you to verify your account via one of the following methods:

Call back

Sending a picture or a scanned image of a personal document (driver’s license, passport, etc.)

Many traders hate the long verification process, but it is currently the best way to improve the safety of both the traders and the broker. Naturally, there are some brokers who offer a much easier sign-up process where you’ll only need to verify your account via email.

Conclusion

Depending on the broker you’ve chosen, the registration process may range from several minutes to a couple of hours or even a couple of days. Keep in mind that if a broker doesn’t require specific verification method, this doesn’t necessarily mean that the operator isn’t trustworthy enough. In fact, most binary options brokers are very reliable, so it isn’t likely that you’ll register an account with an inimical binary options broker.

Choose the Best Broker

As you know, trading on the financial markets is becoming increasingly popular, and it is completely normal for products, involved in this business, to evolve. Every day new virtual markets are being created and that is why it is hard to keep track on the reliability and sustainability of those products. Such market is the binary options market, which is so huge, that it actually looks a lot like the Forex phenomenon. Believe it or not, binary options have been here for 5 years now (they were publicly introduced in 2008) and they managed to become truly popular for a short period of time.

It goes without saying that when there are so many different assets that can be traded, new brokers should occur on the horizon. Actually, there is no official number of the brokers known on the binary options market and this comes here to prove how huge it is. If you are sure that you want to start with your binary options career, then sooner or later you will face the problem of choosing the most appropriate broker, to meet your needs.

Of course, there are many more basic questions that you will have to confront and answer to but we will try to give you a brief idea about how to make the right choice. This guide will be divided into a few sections pointing out some of the important features you should be looking for, while choosing your broker.

Company capitalization

The market capitalization is an important factor every future trader looking for a broker should take under consideration. You better make sure the broker you are going to choose is well capitalized simply because this will decrease the risk of bankruptcy, which automatically means you will lose all the money you have invested. The easiest way to find out whether a company is well capitalized is to check if it is regulated, or not. If yes, then you can be sure the company has millions of dollars, because this is one of the conditions you must meet if you want to apply for regulation. The requirements are monitored by the NFA (National Futures Association), so you can be sure everything is legal. However, you should know that many binary options firms are having problems meeting all the requirements for regulation, even if they have the necessary amount of money.

It is a good idea to ask the broker you have chosen about their capitalization and whether they hedge themselves. Making sure that the capitalization of the company is good is the first step that will make you closer to your goal – choosing the right broker.

Payouts

The offered payouts are also an important feature you should bear in mind, especially if you are about to invest lots of money into your account. Right from the start you must check for the sufficient returns on the money invested. As you know, the binary options trading is all about predicting whether the asset’s price will go higher or lower in a certain expiry time. If you make the correct determination – you win, if not – you lose. It is that simple. However, the return percentage might vary depending on the broker. Some brokers calculate this return based on the current market situation. If we have to speak in numbers, then we recommend a return of at least 70%. The highest returns you can make can go as high as 85%.

There are payouts offered for “out-of-the-money” situations, which means that you can be compensated, even if you lose. As you know, one of the biggest disadvantages of the binary options is the fact that you lose, even if you are one cent below/above your forecast – you lose. So, apart from looking at returns it is always a good idea to also look at the payout rate, when the trades are not successful. Some brokers might offer you a 15%-payout of the sum originally invested.

Assets

When it comes to binary options, it is important to try everything. This is why, you must make sure that there is a great variety of offered assets when choosing broker. Perhaps you might want to try trading currency pair or commodities, or even indices? In such case, this is one of the most important requirements you should look for.

Customer Service

This is also a key factor. For starters, you need to check the number of languages, which the broker chosen by you offers. Then see what the available ways to contact a customer service representative are and check how quick their response time is!
The customer support level is probably one of the most important key indicators, because if something happens during the trade, you will need to know who to contact. After all, there are money at stake and you need to make sure there is someone, who can help you, on the other side of the line. You can get an overall idea how serious the current broker is, judging from your interaction with the support.

Deposit Bonuses and Conditions

Often, you will probably be tempted to join a certain broker because of the sign-up bonus. There might also be some trading promotions. In order to find out more relevant information to this topic, you might want to contact the support once again. However, don’t rush into hasty decisions and to sign up for a certain broker only because their bonuses and trading promotion are great.

Trading Platform

There are several different types of trading platforms on the market. Most of them are web-based, which is great to some extent, because you don’t have to install any software on your computer. Internet connection and a browser is all you need. Basically the binary options brokers offer different types of tools on their platforms. And since the user interface might vary a lot, it is better to try a couple of them and see whether they meet your needs, or not. If yes, then you can be sure this is a big plus, because you will be using the platform on a daily basis.

Psychology of Trading Binary Options

Nowadays people look for ways of revenue other than their consistent jobs and this is why many people turn to one of the newest financial trading forms, the world of binary options trading.

Many people say that trading generally is not for everyone, but it is also true that if you obtain the essential knowledge and your moves on the market are reasonable enough, binary options can appear to be just the right thing for you.

In this article, the primary topic is the psychological side of trading. This is very significant not only for those who are new to the world of trading, but also for more advanced traders who treat their trading as business, and is also their foremost source of revenue.

The Trader’s Brain

It is a well-known fact that our brains are divided into two hemispheres. The left is responsible for the analytical part such as logic, science and other stuff involving logical reactions, while the right one is responsible for emotions, arts and creativities. Taking into consideration our final target, you as a trader need to use and develop more and more your left hemisphere of your brain.

Humans think in such a way that if they start confronting problems and issues, it is really difficult for us to remain calm and focus on the solution. So we reach the assumption that if something is affecting us emotionally, it is hard to use our analytical part of the brain. This is obviously visible when the traders are always following the profit – loss status bar, which can be troubling for more sensitive and emotional people. In such cases what you need to do is to beat your emotions.

The Way to Beat Your Emotions

Emotions are something that is tough to beat for many people. For an adult, it is hard to yet start changing yourself. That’s why there is a simple action that you can use in order to prevent your worries over the profit-loss status – just remove the bar. It is as simple as that. Almost all platforms have this option so it might be a very wise decision to do so.

In order to be reliable in your trading you need to go for the bottom line and if you are continuously checking what is going on with the price of the underlying asset you have already purchased, you might take a decision to change your primary strategy, and therefore end up with a loss.

As you know in this type of trading binary options, it is very important to stick to your initial idea and don’t be affected by middle results.

Key Point of Being Calm

As many of you may know, one of the most important things during trading is to remain calm and to act rational no matter of the situation. If by any chance, you need to make a change in your strategy, if you do it after rethinking everything carefully and check all possible outcomes first, there is nothing wrong with it.

Sometimes losses are difficult to accept and therefore they can’t move on to the next trade. Everyone needs to learn to accept losses and thus to move on. Use them and learn from them. Just like in sports - analyze what have you done wrong and remember it in the next round.

Being Successful by Obtaining Certain Qualities

Other factor that will be transmitted to your trading, just like the rest of your personal qualities, is your attitude. Of course, in the beginning many of us don’t have the right attitude. Luckily, you can always change that by following some rules of your own, and this way you could boost your profits, or at least reduce losses.

If you were soft in nature, emotional, spontaneous or uncertain when it comes to making decisions, it would be much better if you do not let these qualities in your trading. You should learn yourself patience, discipline, motivation, knowledge of money management, and of course, you need to learn how to enjoy trading itself.

Don’t Make Greed as Your Friend!

All people get greedy at some point. It is in our nature, but you need to be able to control that if you want to be a successful trader. On Wall Street there is an old saying that "pigs get slaughtered" which tries to describe the investors who driven on by their greed play the same position as long as they can trying to get every last drop of success out of it.

This is self-explanatory: it is in our nature to always look for something more, always strives to achieve a little more. But in trading you need to be able to overcome greed, because in the majority of cases it will only bring you down.

Important Characteristics of Binary Brokers

Till you have read some articles above, we surely that you have some basic knowledge of how binary options work. Therefore, it is time to set the basic standard of your trading career. Obviously, the first step towards making your first binary options trade is selecting a binary options broker. This may sound like an easy task, but in fact it will probably take you more time than you have primarily thought it would. It is decisive to you to select the right binary options broker for your needs as making the wrong choice may lead to unproductive results, difficulties with the trading platform, low quality support, etc.

Luckily, we are here to help you and we are sure that you will be able to make a forthright decision that will meet your needs thanks to our help. However, before telling you how to select a binary options broker, we’ll make you familiar with some of the most important qualities and characteristics of binary options brokers.

Signing Up Process and Payment Methods

A good broker is the one who makes your job easier. Find a broker that offers an easy sign up process, so that you can get your account up and running in just a few minutes. Logically, you’d want to review some online recommendations of the broker you’ve chosen in order to find out whether the company is reliable or not. Also, you should pay close attention to the payment methods supported by the broker. Many binary options traders live in countries where certain payments are either unsupported, or not allowed. Make sure that the binary options broker you’ve selected will give you the opportunity to deposit/withdraw money via a payment method that is available in your area.

Broker’s Trading Platform

Since you are a beginner, you are probably not familiar with the types of trading platforms that can be used for trading binary options. However, there are still options you should consider before you register an account and deposit some money. Are you planning to trade via a mobile device such as a tablet or a smartphone? If the answer is positive, then check whether your broker supports a mobile or a web-based trading platform. The best trading platforms are compatible with all kinds of devices and they can be accessed from anywhere. Apart from this, good platforms will provide you with access to educational tools that will make the learning process lighter and easier.

Broker’s Trading Assets

No matter how good a binary options broker seems to be, you won’t be satisfied if the broker doesn’t give you the opportunity to trade with a wide range of assets. Check the assets that brokers offer and make sure they allow you to trade the most popular currencies, indices, stocks and commodities.

Rate of Returns

This is one of the most significant points to check, since it will determine the amount of money you win from your trades. Of course, the rate of returns isn’t always a decisive factor for your final choice, because the other characteristics are important as well. Keep in mind that usually binary options brokers offer a rate of returns between 65% and 85%, but in some cases the number can be higher. Some special types of binary options can offer returns up to 500%, but these are not regular options and we’ll talk about them at a later stage. In short, you should always check the rate of returns offered for Call/Put, One touch, Digital and Range options before registering an account.

Technical Tools

Technical tools are essential for every binary options trader because they could help you execute your strategies and perform proper technical and fundamental analysis of different assets. It is rare to find a binary options broker that doesn’t provide access to the most important technical tools, but it is always a good idea to stay safe and check whether the broker you’ve selected will allow you to use the tools needed for technical analysis.

Demo Account

Demo accounts are an important part of your education and you should never use the services of a binary options broker that doesn’t give you the opportunity to trade via a demo account. Demo accounts are a great way to try different strategies, to get familiar with the interface of the trading platform and to learn more about binary options trading without risking your money.

Customer Support

Since you are a beginner, it is very likely that you’ll need to use the services of the support team at least 2-3 times a week. This is why you should make sure your broker’s employees are skilled, experienced, helpful and polite enough in order to answer your questions and help you improve your trading skills.

All in all, selecting a broker can take some time, but we guarantee that the time you spend reading reviews and characteristics of different brokers won’t be lost in vain! Making the right decision in such a situation is one of the keys to start a successful binary options trading career. In the next article, we’ll teach you how to use the information above in order to choose a trustworthy and convenient binary options broker.

Expiration Out of the Money

The Term That Traders Hate to Use

In the next part of our tutorial we’ll talk about another popular term which is, however, despised by most traders. Expiration out of the money is the situation in which the asset’s price goes into the wrong direction when the expiration time comes, and you end up losing your investment. We have already explained what it means for a trade to expire in the money and we sincerely hope that throughout your entire trading career you’ll use this term more often than the expiration out of the money. Let’s get back to the topic what expiration out of the money is and why traders hate it so much.

When Does a Trade Expire Out of The Money?

As you already know, when trading binary options there are only two possible outcomes of the trade – you either win or lose. In the last article of our tutorial, we explained the concept behind expiration in of the money as well as the meaning of this term, but now it is time to take a closer look at what happens when you lose a trade.

You already know that some of the main characteristics of a binary options trade are the strike time, the strike price and the expiration time, so it shouldn’t be a problem for you to understand what expiration out of the money is. Let’s say that you are planning to place a put option at 14:00 on the EUR/USD currency pair which has a current value of 1.335.

Therefore, the strike price is 1.335 and the strike time is 14:00. The next step is to choose the expiry time of your trade – in this case we’ll assume that you’ve selected “1 hour”. This means that your trade will expire at 14:59 and you’ll find out if you’re prediction was right or wrong. At 14:59 you see that the current price of the EUR/USD currency pair is 1.336 which means that the asset’s price went up. Since you placed a Put option, this means that you predicted that the price will go down after one hour. However, it is not unusual for the price to go up, so the trade expires out of the money and you end up losing the money you placed on this bet.

Conclusion

In short, when a trade expires out of the money you are on the losing side. This is why most traders hate using this term, because it usually means that their prediction didn’t turn out to be correct. Now you are aware of some of the binary option trades’ main characteristics, so it is time to move further with your education. In the next two parts of our tutorial we’ll tell you about binary options trading hours and make you familiar with the most important qualities and characteristics of binary options brokers.

Expiration In the Money

This tutorial continues with the part where we pay more detailed attention to some of the terms you will often encounter while trading binary options. It is always better to be prepared and know what a certain term means, rather than just looking at it and wondering whether it is important, or not. Remember that everything in binary options is important and the greater your knowledge is, the better. As a matter of fact, there are many traders, who lack any trading skills and this is why they have been on a “black” row. This term is used when a loss after loss is coming and sooner or later your initially invested funds will come to an end.

Of course, there is hardly a person, who would want this to happen; so, in order to make everything right and be sure that you have everything it takes to become a successful binary options trader, you must make sure that you've learned and mastered every single one of those terms. Then, and only then, you will have what it takes to start with your first trade – otherwise, your binary options trading will be nothing more than pure gambling; and since binary options trading is an art and there are lots of strategies, it is everything else, but not a gambling!

New horizons for trading

The next term we would like to explain is expiration in-the-money. We guess that those two – the words “expiration” and “in-the-money”, are terms you already know, but in case you can’t remember, let us refresh your memory. The expiration time is the time when the asset will close, and it is one of the key factors because it determines your outcome. You win, if you have guessed the right moment of the asset when the expiration comes and the bid is closed. Respectively, you lose if you haven’t done that. The “in-the-money” term is used in binary options trading pretty often, and it means a win, while “out-of-the-money” means a loss. Now let’s see what the combination of those two factors means.

The flexibility of binary options trading provides numerous opportunities for trading, because there are always markets open, no matter what your local time is. By having such a range of options you also have the chance to generate huge profits and respectively, to have expiration in-the-money.

When you trade binary options, there are only two possible outcomes. In this scenario, your part as a trader is to predict whether the asset’s price will fall or rise by the predetermined time, which is also known as expiry time. For example, if you think that the price will go higher by the time of the expiry and you turn out to be right, then the option will achieve “expiration in-the-money”, because you will win. Respectively, if you assume that the price will go lower, the option will get “expiration out of the money”, but we will provide you with more information on that topic later.

We know that theory might be found a bit hard to understand by beginners and this is exactly why we would like to give you a brief example. It will make things easier and you will get an idea how things are done with binary options trading. Let’s say you want to place a bid and after analyzing the situation you have decided to pick up the Nike stock (NYSE:NKE).

Its current price is 75$, but you think that after 1 hour (your expiration time), it will close above its current value. In such case, you will want to place a call option. The call option is a strategy in binary options when the investor believes the price will go higher. If you are right and if the price is actually higher after 1 hour (your expiration time), your outcome will naturally be expiration in-the-money.

Simple and yet, effective

This is how simple it is! You might encounter some slight difficulties until you master the techniques of analyze, but once you do so, you will not have any problems with binary options trading. Keep in mind that it is always recommended for new traders to invest as much time as possible in learning more about binary options. This will give you the knowledge necessary to help you gain enough confidence and start trading with real money. Is it possible to trade without making an investment of real money? Yes – it is! This topic will also be covered later. All you need to know at the time being is how you are supposed to tell when your expiration is in-the-money and when out-of-the-money. Remember that by having good background knowledge you are making the first step towards becoming a successful binary options trader. After all, this is exactly why you are here, right?

Expiration Time in Binary Options

Introduction

Expiration time is not complicated to follow and in fact it is one of the simplest things you’ll have to learn as a binary options trader. Basically, the expiration time determines how long after you've placed the trade, you’ll learn the outcome of your bet. Depending on the type of binary options you are trading and the type of your binary option broker, you may see different expiration times when placing a trade. After you place your bet and pick the expiration time, the only thing you can do is wait for that time to arrive. When the expiration time comes, the trading platform will assess the value of the asset and determine whether your trade will expire in or out of the money.

Strike Time, Strike Price and Expiry Time Alternatives

There are several other terms that are closely related to expiration time. For example, when a trader places a bet, the hour at which the trade was placed is often referred to as strike time. The exact price of the asset at the execution time of a certain trade is called strike price.

At this moment, the trader is supposed to predict both the direction of the asset’s price and pick the expiration time. For example, if the trader thinks that the asset’s price will rise, then they have to select the Call option. Meanwhile, if they think the price will go down, then they have to execute a put option.

Don’t forget that your broker may offer different expiry times for different types of assets. In most cases brokers will give you the opportunity to choose between hourly, daily and weekly expires, but there are also things such as 60-second options which allow you to quickly execute trades with an expiration time of just one minute.

Expiry time is one of the most important aspects of executing a trade, because making the right choice is very likely to determine whether you trade will be successful or not. The larger the expiration time, the more likely it is for the asset’s price to drastically change under the influence of market changes. Of course, this doesn't necessarily mean that shorter expiration times are preferred – this entirely depends on the trader’s trading style and and their choice of analysis methods.

Example

The best way to explain why you should understand the concept behind expiration time, strike time and strike price is to give you an example. Let’s say that a trader has just placed a put option on the USD/JPY currency pair. The strike time is 13:30, the strike price is 99.147 and the expiration time the trader picked is two hours. This means that the trade will close at exactly 15:29 and the trader will find out if their trade will expire in the money or out of the money. If at 15:29, the price of USD/JPY currency pair is lower than the strike price, then the option will expire in the money and the trader will collect their winnings.

Expiration Rate in Binary Options

It is now time to start paying detailed attention to every single one of those terms we've briefly mentioned in the previous article, which can be considered as a really good dictionary for binary options terms for beginners. As you know, in order to become a really successful trader, you must aware of every single term in order to be confident enough that your knowledge is not just sufficient to generate profits, but is superior to the knowledge of other traders. In that way you will be able to beat them and of course, beat the system and become the binary options trader you have always wanted to be.

Binary options are not only a simple and effective method of investment, but they are also profitable and if you know how to play them, you will know how to generate huge profits without making any serious efforts. The first term that we will pay attention to is the so-called expiration rate. This element is considered to be one of the most important for investors, so make sure you read carefully and learn everything you can – this will only help you and improve your trading skills.

Get to know the expiration rate better

The market price of the underlying asset at the exact time when the respective option will expire is what binary options expiration rate represents. As you can guess, since we assume you've already been through the previous articles making yourself familiar with the mechanism of binary options trading, the expiration rate is considered to be the determining factor that will help you find out whether your bid is successful or not, and whether you are in-the-money or out-of-the-money, and respectively winning or losing.

The trader will be paid a predetermined, fixed amount, or maybe nothing upon expiration, if the movement of the asset’s price is the opposite to their suggestion. The very fact that the sum is a fixed amount and is already known by the investor means only one thing – you will be able to manage your risk, which is a really great advantage compared to other trading mechanisms you can use.

In order to clearify, here is an example. Let’s assume you want to trade using the index Dow 30. The binary options expiration rate is definitely a critical factor here in case you want to achieve success. Firstly, if Dow’s value is 12,13,144 and there is a 5-hour expiration rate, you have to analyze the recent price movements of the index and make your suggestion based on them. If you see that the index has been on decline with a higher of 12,14,144, then you might want to execute a call option. The logic here is that since the current rate is 12,13,144 and the daily higher was the previously mentioned one, the investor thinks that the current is fairly low compared to the market and this is why they believes the price is likely to rise above the current price.

The expiration rate plays a significant role in the binary options trading outcome as it is a key factor of determining the final result of your bid. Remember, to take a good look and decide what the movement of the asset during your expiration rate will be. This decision is a critical one, so spare no effort and time in order to make it right!

Importance of Expiration Rate

Most importantly, the binary options expiration rate will influence your payout. The reason for this is because it influences you – the trader – to select whether the price will fall (and place a put option) or whether it will rise (and place a put option). Once you predict the movement, then you can consider yourself a winner and “in-the-money”), because there is nothing better than experiencing positive financial results.

When placing a bid, there are a couple of important things you have to keep a close eye on. For example, you should always pay attention to the expiration rates listed on past expires of the asset you have chosen. This will help you analyze the movement and predict more accurately what the next movement might be. Invest as many time as possible to do so, because this might be considered as one of the greatest helpful tools you can use – the market movements are your helpers, so pay the needed attention needed in order to make sure you know anything about them.

The expiration rate should not be underestimated, because your profit depends on it. This is why, once again, you have to make sure you have analyzed the previous expiration times of the asset you have chosen. You will notice this will only help you, simply because you will be able to make up your mind and see whether the price is going to rise or fall, which will let you place the proper bid and generate profit.

Turn Your Knowledge into Profit

Binary Options Aren't Always Stress-free

Novice traders ask themselves one simple question – “Can I essentially make money from trading binary options?” Unluckily, it is difficult to give an accurate answer to this question, because this is something that fully depends on you! Binary trading has been around for decades, but it became available online just a few of years ago, and nowadays it is one of the fastest growing trends on the net. Though we can’t tell you whether you will or will not make money from binary options, we can provide you with more information about this type of trading and hopefully, by the end of this article you’ll be able to determine whether you are ready to become a binary options trader, or not.

If you've been reading about binary options in other websites on the Internet you've probably notices that there are many opinions about this type of trading. We are very sure that most of them are trying to persuade you that binary trading is a simple and stress-free way to make money. Unluckily for you, this isn't the truth, but don’t despair yet, because binary options are certainly a great way of earning money. However, becoming a lucrative trader is a long process and sometimes it may take you months to master the art of binary options trading. But one thing is for sure – if you are keen enough and you actually want to learn binary options trading, then sooner or later you’ll definitely turn your knowledge into profit.

Trust on Trusty Sources

There are some things you should know since you are reading out article about binary options trading. Initially, forget about the things you've read on other websites about binary options. Our experience shows that most websites that promote binary options trading are just looking for a way of making you sign up through an affiliate link. In order to do this, these websites’ owners will give you false promises for making some stress-free money in no time, but they won’t tell you that binary options trading is also an easy way to lose a lot of money in a short period of time. Before starting to trade binary options, you need to prepare yourself by reading enough about this type of trading, about its specific characteristics and some of the trading strategies that have verified to be resourceful and trustworthy.

Thankfully for you, all the information you need about binary options is listed in our Binary Options Review section, so you have a good place to start your trading career. Here you’ll find all the information you need in order to start-up your binary options trading career and develop it in the accurate direction. Our articles contain thorough explanations of every step of the trading process and you can rest assured that none of your questions will be left unanswered, because we've taken into consideration every aspect of the trading process.

Mental Challenge in Binary Options Trading

Trading skills aren’t the only thing you need in order to become a successful trader. The mental aspect of trading is also a significant part of our articles, but tragically we can’t teach you how to control your emotions. It is up to you to take duty for your actions and control your trades. Sometimes it is best to stop trading for a while if you’ve lost too much money in a short period of time, because most people find it difficult to make the right decisions in such situations due to the fact that they are influenced by the recent loss. Of course, we’ll talk more about the trader’s psychology in another part of our articles, so this information should be sufficient for now.

Assumption

In assumption, making money from binary options isn’t stress-free, but it isn’t so hard as well. Of course, don’t expect it to be child's play – there will be some disappointments for sure, but there will also be many happy moments when you’ll make more money than you’ve expected. Logically, it depends on you who conduct moments occur more often – the disappointing ones or the happy ones. The key to being a successful trader is to never stop improving yourself – so, make sure you are always in touch with the latest innovations in the binary options market and never stop reading about this type of trading. This is the only way to keep up with the latest trends and to make sure your trading skills don’t get worse. There are many ways to turn your knowledge into profit, but binary options trading is certainly one of the simplest ways to do this – all you need is some free time, access to a computer, the Internet, and at least $100 - $200 for an initial investment. These four things are all you need to read our articles, choose a binary options broker, invest money and start making profit from trading. Good luck with your trading!