“How to make money with binary options” is the most frequent question that new traders wonder about when entering the market. The answer is you need to invest your time and money to learn and experience the market. Thus, you will understand the binary options market structure and take advantage of it to generate profits.
To support new investors to shorten the researching time and save money, we provide the most basic indicators, criteria, and tips in this blog. So, traders can find useful guides as well as advice on how to make money with binary options trading.
What is binary option?
Binary options are one financial instrument that lets traders profit from market fluctuations. To support, the market fluctuations are based on changes in real currency pair rates. So, investors just need to predict the price will go above or below the market price after a certain amount of time.
As a result, there are just two possible outcomes: YES or NO for traders. On one hand, if traders correctly anticipate the pricing movement, they will win the betting money. On the other hand, it will cost all the trading volume that they have betted.
Investors can trade binary options via different brokers. Additionally, they will have different payout rates benefiting various currency pairs. Therefore, investors should wisely choose suitable brokers to maximize trading profit.
Can you make money with binary options?
Due to the price prediction, many investors misunderstood binary options trading as a kind of gambling. Besides that, brokers usually provide payout rates below 100%. Therefore, traders will be confused about really making money with binary options.
In fact, the number of traders is increasing rapidly in these 10 years. According to IQ Options which is a great binary options broker, the number of traders grows from nearly 1 million in 2014 to over 48 million investors in 2020. Moreover, the trading volume increased 2100% during the same period of time. Thus, it supports the answer that traders can make a profit from binary options! However, it requires hard work, smart and long-term strategies, commitment, and patience in consistently practicing with the binary options market.
How do binary options brokers make money?
The growth in the number of binary options investors also leads to more establishments of brokers. Moreover, brokers can make a lot of profits from managing trading activities in the market.
To support, they can earn money from failed orders. Besides that, brokers also challenge investors with a less than 100% payout rate. For example, even if you win, you will only receive, let’s say, 80% of your betting money. It means your winning percentage has to be above 50% to reach break-even.
How to trade and make money with binary options
Binary options for beginners are not too difficult to start. It just needs a little research and a clear guide to help you to understand the system. Herein, we will specifically answer your question of how to make money with binary options traidng.
Step 1: Choose trusted brokers
As we have discussed above, there are more and more brokers in the binary options market. Therefore, picking one in a thousand is not easy, especially for beginners. To explain, you may face losses and unreasonable trading fees if you trade with unscrupulous brokers.
Hence, you need to research carefully and choose brokers based on specific criteria. Here are some of them:
- Regulation
- Demo account
- Minimum initial deposit
- Ease of use
- Variety of assets
- High Payout percentage
- Fast withdrawals
- Multiple modes of payment
Moreover, one broker may not satisfy all of your needs. Besides that, your currency pair portfolio may be various that will be benefited by different brokers. So, you can trade with varied brokers that fit your preferences.
Overall, it is advisable that you should trade with trusted and well-known brokers in the market. Thus, their information will be released publicly and more secure for you to trade. Some great brokers are IQ Options, Binary.com, or BinaryCent.
Step 2: Research suitable binary options strategies
In the binary options market, research is the key leading traders to success and profit. Therefore, we highly recommend investors start researching appropriate trading strategies before jumping into the market.
Having a clear investing strategy can help speculators avoid bad scenarios while trading. For example, investors will know what to do after a losing streak, stop trading or raise the volume. Or, they can better manage emotions and wait for another period of time to trade.
Besides that, traders should incorporate new trading strategies to improve performance over time. To support, trading strategies should be flexible due to the effects of economic news.
Step 3: Practice trading strategies on demo account
After identifying appropriate trading strategies, traders should practice and improve them step by step. It is advisable that demo accounts should be used effectively by traders to test new strategies. Believe it or not, it is one of the best way to make money with binary options. To explain, practicing with demo accounts will help investors gain more experience and improve predicting market movement skills.
In fact, demo accounts are offered by brokers and they are free. Besides that, you will not risk your capital while using these demo accounts. Moreover, you can apply your strategies in the real binary options market. So, it is a perfect free tool to test your predictions and trading strategies. However, many brokers provide demo accounts while some do not.
Step 4: Start live trading
When you are confident with your trading strategies which are proved by demo account practices, it is time for some real orders! You need to choose your preferred currency pair, set expiry time as well as the trading volume. Then, you will have the outcome after the time has expired.
However, you are trading in your real money. Thus, you need to be aware of risk management and profit optimization. Furthermore, you can suffer from emotional stress which may not happen while you are trading in demo accounts. As a result, we will provide some tips that can help you trade binary options flourishingly and productively.
Tips to trade binary options successfully and profitably
1. Choose the best time to trade
A major difference between binary options and the stock exchange is the trading time availability. While investors can only trade stock from Monday to Friday, they can trade 24/7 with binary options. Thus, understanding the best time to trade binary options during 7 days a week will help speculators optimize their profit.
In detail, the best time to make money with binary options depends on your time zone. To explain, currency pairs are mainly affected by the four greatest stock exchanges. Due to their differences in opening and closing times, traders will have more or fewer currency pairs to trade. Moreover, during the opening time, the trading volume of certain currencies will increase. As a result, it is perceived as a good time to trade and make money with binary options. If you find the best time to trade, it means you have discovered the best way to make money with binary options.
You can discover specific times to trade in the morning or afternoon in our blog: When is the best time to trade binary options? 4 Critical criteria.
2. Find a good market in binary options
Each individual will perceive differently about what is a good or bad binary options market. However, there are some common market’s characteristics that can be considered as critical signals to identify the market conditions.
For example, it can be a bad market if there are too many Doji candles. To explain, there are a low number of traders in the market. Or, there is a tug-of-war between buyers and sellers. On the other hand, long wick candles are also a signal of a bad market.
Besides that, the financial news releases can warn of great market fluctuation. Therefore, traders should be careful to make an order during this period of time.
Even experienced traders will find difficulties when answering the question “how to find a good market in binary trading”. However, if you want to make money with binary options, you need to figure out important signals to start trading. Hence, you can take advantage of the market conditions as well as optimize your trading strategies.
3. Choose the right currency pair
Different brokers will have limited currency pairs to trade. However, the number of currency pairs are too many that traders should not expand their portfolio too much. But it does not mean you cannot diversify your investments. To support, focusing on some specific currency pairs and mastering the market will help them optimize winning percentages.
The trading availability of certain currency pairs are also based on the opening and closing time of the four exchanges above. Additionally, they are called minor currencies and have high trading risks for investors. On the other hand, the major currencies which are more stable, are more preferred by traders.
Besides that, to master one currency market, traders should understand fundamental factors affecting it. In detail, there are four main factors including interest rate, economic data, politics, and market volatility. These elements often cause the greatest fluctuations on both major and minor currency pairs.
In order to choose the best fitted currency pairs to trade, you can see more in the article: “6 Tips to Choose the Best Currency Pair in the Binary Options Market”. Herein, we provide an in-depth analysis of the effects of those factors above. Moreover, you can find a clear guide on how to find suitable currency pairs to trade with detailed examples and strategies. Crucially, it shows how to make money with binary options by choosing the right pair to trade. Please bookmark and spread the article to your friend if it helps!
4. Apply appropriate money management strategies
As we mentioned above, a wise trader will not jump into the market without preparations and strategies. In fact, money management strategies play a crucial role in guiding and optimizing the trader’s profit. However, which strategies will be best fitted with your trading style?
The answer is you need to do research about all possible strategies. Then, test them in demo accounts to determine whether it is suitable for you or not. There are seven trading strategies that are commonly used by trading experts. They are:
- The classic money management strategy
- The Percentage Balance Account strategy
- The Martingale strategy
- The Snowball (Anti-Martingale) strategy
- The Fibonacci strategy
- The Revert-Fibonacci strategy
- The Custom strategy
In fact, each strategy will have its own pros and cons. Thus, it will be suitable with various traders who may be conservative or aggressive.
In the article The Best 7 Binary Options Money Management Strategies [Update 2021], we will show you the detailed advantages and disadvantages of each strategy. Furthermore, specific examples are applied to explain more clearly those strategies. So, you can define winning percentages as well as profit after every order.
5. Eliminate emotions while trading
Trading with real money will not only cause you financial pressure but also emotional stress. To explain, it is generated by the fear, greed, or excitement of investors during trading time. Importantly, trading psychology is one of the most important factors determining the investor’s success.
Let’s assume you already choose a great broker with a high payout rate, a potential currency pair with a fantastic trading strategy. You understand the market and be ready with good market conditions coming.
Suddenly, one order does not go as planned and you start to panic. Then, you forget everything about favorable conditions, trading tactics, or choose the best time to trade. Instead, your emotion is stimulated and orders are placed to avenge a loss. Consequently, you receive a bigger loss, lose confidence in yourself, and perceive the market structure as bad.
Human emotion is natural and you cannot totally avoid it during trading time. However, if you can understand your emotion, the reason why it comes to you, then, you can control and come over it. To make it easier for investors, we provide four rules to eliminate emotions while trading in the blog: Understand Trading Psychology and 4 Tips to Control.
6. Take advantage of auto trading tools
Even experts who enter the binary options market for a long time, always feel tired of calculating and trading sometimes. To explain, there are too many noises in the market that traders need to be aware of.
For example, they need time to analyze the market, test the right strategies on demo accounts, or read the news to anticipate the market. Then, they gradually realize the pricelessness of time. As a result, investors need an assistant who can manage and represent them to trade. That is how the auto trading tools play a critical role in the binary options market.
Synchronizing trading signals among brokers
You may choose various brokers to trade different currency pairs. It is because they will provide beneficial payout rates. So that you can optimize your profit by wisely choosing fitted brokers. However, you may notice there are some varieties of candles.
It leads to confusion and may redirect your trading strategies. Furthermore, it can cause losses although the differences are not too significant. But you already know how binary options work! If you fail an order, you will lose 100% of the betting money.
So, trading tools like [TB] SYNC IQ2MT can help you to erase your worries about differences among chosen brokers. In detail, the tool will support synchronizing trading signals and reduce trading confusion. It is an important tool for professional traders!
Automatically make orders according to your trading strategies
As we mentioned above, there are some favorable times that the exchanges open and benefit your preferred currency pairs. However, you do want to test the market at the same time. Furthermore, people who can multitask are rare, and to accurately make the right orders is a tremendous challenge!
Therefore, to reduce trading difficulties and investors can have more time to do market research, they can use auto trading tools such as the [TB] MT2IQOPTION. In detail, you just simply research and test your best trading strategies. Then, with the initial setting, the tool will automatically apply your strategies and manage orders. Furthermore, it connects with financial news sources to minimize trading risks for investors. This tool is suitable for speculators who already have profitable indicators and need trading support. It is how experts make money with binary options.
Copy orders from trusted signals
If you join the binary options market with your friends or other experts, you can take advantage of the group’s knowledge. Hence, you can share information and together trade profitably.
However, the disadvantage of this approach is the trading delay time. To support, one member in the group may identify a great trading signal at the last minute. So, he/she cannot deliver information on time. Consequently, only one or fewer team members can make that order. Besides that, it may cause doubts among teammates in sensitive situations.
In this case, the [TB] COPY IQ can help traders to copy orders of each other. In detail, once the main account makes an order, unlimited linked accounts can copy the same transaction accordingly and accurately. It is how to make money with binary options in a group.
Conclusion
Through this blog, we hope that traders will have more confidence in making money with binary options. Moreover, you can easily understand fundamental indicators in the binary options market. So that you can choose your best trading strategies and maximize the profit.
Undeniably, to make money with binary options is not a simple task. However, if you spend enough time to research and consistently invest in the market, you can achieve your financial goals quickly. Good luck traders!
This piece does more than just convey information; it opens up a space for contemplation and deeper thought.