If you have ever thought about trading in the stock market or investing stock options, there is an alternative that you may possibly wish to think about. This alternative is binary option trading. The way in which it works is that first you select an asset say for example a stock index, and individual stock, a commodity, or a currency pair.
Then you determine a time frame which can be anything from one hour, to the end of the trading day. Last but not least, you decide upon the direction that the asset will move. If you feel it will move up by the end of the time period,you will select a call option. If you think the asset will move down at the end of the time period, you end up picking a put option. After this you decide upon the amount of the bet or investment you are prepared to make, and you are done.
The nice thing about binary trading is you can trade with an exceptionally small amount– as little as $30. The other nice thing is that you simply always have a fixed amount of risk. You can certainly lose the entire amount you bet on an individual trade, but no more. This is distinctive from some type of options and commodities trading in that you are trading on a margin and may be subject to a margin call if the investment goes against you.
The return for binary options is usually in the 70% range. So after as little as an hour you may make 70% return on your investment. Since online brokers don’t charge a commission for trading binary options, you will not deduct that from your returns.
Although it seems deceptively an easy task to estimate whether an asset will likely be higher or lower one hour from now, the truth is that it is very hard, nonetheless it can be achieved, and with a 70% return you won’t need to be right very often to come out ahead.
Looking at recent trends is one way to approach the forecasting. Although trends can suddenly reverse, they can be a reliable way to predict prices in the short term. Needless to say there are various other technical analysis strategies which can be used besides trends. You’ve got to practice on paper before jumping in and risking real cash.
Be cautious about spending thousands of dollars for some system that you can’t verify the performance of, or that doesn’t have a performance guarantee.