How to Trade Binary Options | Beginners Learning Tutorial


In this guide, you will learn everything you need to know about trading Binary Options. We will introduce you to the basics, show you how binary options trading works, explain to you the best binary options trading methods, and answer all questions regarding how to trade Binary Options.

how to trade binary options

What are Binary Options? – Definition

A Binary Option is a financial product known as the “All-Or-Nothing” option where the outcome is based on two different options. You can win a high return or lose your investment amount. It is a simple “yes or no” option, which is why it is called “binary”.

Key facts:

  • A Binary Option has only a win-or-lose result.
  • Traders can earn a high return depending on the broker’s offer.
  • A Binary Option expires after a fixed expiry time and shows the result immediately afterward.
  • The risk is limited due to the whole investment amount.
  • Binary Options are regulated in the US but are traded mainly offshore in other countries.

The unique thing about Binary Options is that you have only two options: “Higher” or “Lower” (explained for dummies).

As a trader, you only have two options to choose from, and there are only two possible outcomes.

Traders will predict whether their asset’s price will increase or decrease, and they will either lose their investment or get a high, fixed payout between 75% to 95% of their initial investment.

As a financial instrument, Binary Options are very flexible – you can use different time periods and trade almost every asset. The time periods normally start from 5 seconds and go up to at least one hour. So you only have two possible ways to place a trade:

  • Call / Higher/ Up: Your forecast is a higher future price (rising market)
  • Put / Lower/ Down: Your forecast is a lower future price (falling market)

With just two options and two outcomes, binary options trading is an attractive venture for most individuals looking to earn money online. Find out more detailed information about how to trade Binary Options in our guide below. Proper Knowledge is the key to sustainable success. You also have to be aware of the risks that come along with trading a Binary Option.

➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

Step-by-step guide: How to trade Binary Options

The following section will show you how to trade in detail. Follow these eight simple steps:

  1. Find a trustworthy broker
  2. Register your binary trading account
  3. Deposit money or use the demo account
  4. Choose the asset to trade
  5. Make a forecast: Price up or down?
  6. Choose the expiration time.
  7. Choose the investment amount.
  8. Start the trade and wait till it expires

Let’s go into detail for every single step.

1. Find a trustworthy Binary Options broker

The next sections will further explain how Binary Options trading works. But first of all, let’s answer which broker is the best to trade with. Not every online or Forex broker offers binary options trading, so you have to look out for a broker offering this financial instrument.

In the table below, you can see three of our most recommended binary options brokers. These brokers fulfil many different requirements we’ve set when testing all brokers. They are safe, give a high return to you as a trader, and operate worldwide. With every broker, you can open a free binary demo account to get started risk-free.

Broker:
Review:
Advantages:
The offer:
Yield: 97%+
12345
5.0/5
  • Welcomes international clients
  • Offers high payouts: 90% – 97%+
  • Professional-grade trading platform
  • Swift deposit process
  • Enables Social Trading
  • Provides free bonus incentives

$ 5

   Visit broker

(Risk warning: Trading is risky)

Yield: 95%+
12345
5.0/5
  • Min. deposit $10
  • $10,000 demo
  • Professional platform
  • High profit up to 95%
  • Fast withdrawals
  • Signals

$10

   Visit broker

(Risk warning: Trading is risky)

Yield: Up to 100%
12345
5/5
  • $10 minimum deposit
  • Free demo account
  • High return up to 100% (in case of a correct prediction)
  • The platform is easy to use
  • 24/7 support

$10

   Visit broker

(Risk warning: Trading is risky)

Broker:
5.0/5
12345
Yield: 97%+
Advantages:
  • Welcomes international clients
  • Offers high payouts: 90% – 97%+
  • Professional-grade trading platform
  • Swift deposit process
  • Enables Social Trading
  • Provides free bonus incentives
The offer:

$ 5

Visit broker

(Risk warning: Trading is risky)

Broker:
5.0/5
12345
Yield: 95%+
Advantages:
  • Min. deposit $10
  • $10,000 demo
  • Professional platform
  • High profit up to 95%
  • Fast withdrawals
  • Signals
The offer:

$10

Visit broker

(Risk warning: Trading is risky)

Broker:
5/5
12345
Yield: Up to 100%
Advantages:
  • $10 minimum deposit
  • Free demo account
  • High return up to 100% (in case of a correct prediction)
  • The platform is easy to use
  • 24/7 support
The offer:

$10

Visit broker

(Risk warning: Trading is risky)

2. Register your trading account

After selecting your binary broker, register for your trading account. You will need a secure email and a password. You can also sign up via accounts on other applications such as Facebook or Google.

➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

3. Deposit money or use the demo account

You have two choices: take the demo account for a spin or jump into trading with actual money. It’s generally a good idea to start with the demo, given that binary options trading comes with its fair share of risks, and it’s easy to see your investment vanish. The good news is that switching between your real and demo accounts is a breeze, letting you move seamlessly from practice to live trading whenever you’re ready.

You don’t know what a demo account looks like? They are retail investor accounts that have (mostly) all functions of a live account – but they have only virtual money in it which you can add for free any time you want.

4. Choose the underlying asset

Binary options trading gives you the freedom to explore a variety of markets, from the hustle and bustle of the Forex scene to the dynamic world of stocks, the tangible allure of commodities like gold and oil, the digital frontier of cryptocurrencies, and the broad perspective of stock indices. Whatever your interest, Binary Options provides a uniform approach to trading across these diverse assets.

Consider starting with a demo account, especially if you’re new. It’s a smart way to learn the ropes, experiment with different strategies, and get a real feel for the market dynamics without putting your money on the line. It’s like a sandbox for your trading ideas, where you can build your confidence and expertise at your own pace.

➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

5. Make a forecast by analyzing the asset – will its price go up or down?


Once you’ve selected your preferred market or underlying asset, such as the forex market, the key decision you face is predicting whether the asset’s price will rise or fall in the future. Making this prediction requires you to keenly observe market trends and employ various indicators to conduct a thorough analysis of the asset in question.

Having the right trading strategy to gain maximum profit is very important. New traders can look up simple trading strategies that are commonly used and tweak them accordingly. A brokers’ platform usually provides traders with many tools and features to help them analyze the asset.

Alternatively, traders can use technical analysis to get trading ideas and develop their own trading strategy. You can also use the different education tools the broker offers to understand how trading strategies are formed and used. Not all strategies can be successful, as every asset responds differently to market events. Traders must record their trades and see how they fare for the asset they’ve chosen over time.

Each binary option contract comes with a set expiration time, marking the end of the trade. When predicting whether the market price will climb or drop, factoring in this expiration time is crucial. You can choose the duration of your trade, from as short as 5 seconds to several hours, depending on what suits your strategy best.

Once you’ve decided on the direction – up or down – and the expiry time, you’re one step away from placing the trade. To remind you of the two options you have:

  • Call (Higher): The price goes up in your expiration time
  • Put (Lower): The price goes down in your expiration time

7. Choose the investment amount

The last step before placing your trade is setting the investment amount. Some brokers limit this to a specific amount, which depends on your account level.

For example, if you have a beginner account, you can only trade with $500. But with a VIP account, you can trade up to $5000 within one trade.

Be careful: Your investment is the amount of money you can lose per trade. If your prediction is wrong, all of your investment amount is gone.

8. Start the trade and wait till it expires

Once you’ve set the investment amount, click Up / Call or Down / Put to place the trade. Some brokers want you to verify the trade, so you have to do another click. Now, it’s time to wait until your trade expires. Some brokers offer to close trades before the expiration time is up – this allows you to reduce the impact of a wrong decision by closing the trade early when it hits a certain price.

If you are right and the market price moves in the right direction below or up your strike price, you will get a payout between 75-95% of your investment. The yield depends on which broker and underlying asset you select.

➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

Example of Loss on Binary Options Trading:

In binary options trading, a loss occurs when a trader’s prediction about the market direction is incorrect at the time of the option’s expiration. For example, if a trader predicts that the price of gold will rise and places a “call” option, but the price falls by the expiration time, the trader will incur a loss. The loss is typically the amount invested in the trade, as binary options offer a fixed risk-reward structure.

Let’s say you’ve decided to go with a call option, betting that your chosen asset will climb above a strike price of $75 by the time the option expires. You’re feeling confident and predict the price might even hit $100.

However, as the expiration time rolls around, the price is only $50, nowhere near your anticipated $100 mark. Unfortunately, this means your prediction didn’t pan out, and as a result, you end up losing the money you put into the trade.

Example of profit on Binary Options trading:

On the flip side, if your instincts are spot-on and the asset’s price surges to $100, surpassing your strike price of $75, you’re in for some good news as the option expires. This scenario means you’ve made a successful prediction, and you stand to profit from the binary option’s yield. For instance, if you initially invested $1,000 and the option comes with an 80% yield, you could see your investment grow to $1,800 through your broker. Quite the win, wouldn’t you say?

Learn more precise Binary Trading with the Binaryoptions.com course

Elevate your trading skills with our specialized Binary Options Course available on Binaryoptions.com. Designed for traders eager to deepen their knowledge, this course bridges the gap between basic understanding and advanced strategies. For more details and to embark on a comprehensive learning journey, visit our main homepage or dive into the course here.

Our expertly designed course not only reinforces the fundamentals you’ve just learned but also introduces you to deeper insights and techniques that can significantly improve your trading process while increasing your success when trading binary options.

Definitions of basic terms used in Binary Options

When starting the trade in binary options, you will encounter many terms that you might be unfamiliar with but are important to make a successful trade. Here are the basic terminologies that every trader must know. 

  • Underlying Asset: It is the market on which you trade binaries.
  • Expiry Time: You will receive the final result when the trade expires.
  • Strike Price: Your price where you started to buy or sell. The price has to be above or below to make a profit.
  • Fixed amount of profit: The possible return that you can get out of the trade
  • Call Option: You invest in rising prices
  • Put Option: You invest in falling prices
  • Broker: A broker is an intermediary in financial markets, facilitating transactions between buyers and sellers for a fee or commission.
  • In-The-Money: Many brokers use this term to display the result of your trade. It means that your prediction stands correct, and you will get the return.
  • Out-Of-The-Money: It is the opposite of in-the-money. It is shown when the result is against your chosen option, meaning thereby, your prediction is wrong, and you have lost the money.

The underlying asset of a binary option

The underlying market can be stocks, commodities, cryptocurrencies, forex, or ETFs. It is depending on the broker which assets are offered. The trade just buys or sells an options contract on these underlying assets. It is no real investment in the asset like buying gold from a retailer. You just trade the options contracts.

Expiry time of an option

The binary option always closes on a fixed expiration time. For example, you can trade 30-seconds, 60-seconds, or even 1-month. It is depending on the broker you choose and which expiration dates are available. If the expiration date is reached, the underlying asset price has to be above or below your price target.

Price target/strike price

The price target is your basic entry point or strike price. If you start to buy or sell a binary option the strike price is the current market price. So it is very important to have good timing on your side. Even if you miss your price target by 0.1 points you can lose your entire investment. But on the other side, you can win a high amount of return if you are right. Maybe you ask: Can I have two price targets? – The answer is simple: This is not possible.

Fixed amount of profit

A binary option has a fixed amount of profit which is fixed by the broker. The fixed payout can be 60%, 70%, or even 90% of your investment amount. But keep in mind you can lose your entire investment if you make the wrong trading decisions. There are only two outcomes: You lose or win. The fixed payout is also depending on the underlying market you trade and the expiry time. Sometimes there are three types of outcomes of a binary option trade: You lose, you win, or you get the money back when the market exactly hits the strike price

Call option and put option

Binary Options is a simple trading product with limited risk. There are only two ways to trade it: You got call options and put options. Call option means you say a binary options market will rise above a certain price in a limited expiry time. A put option means you say a market will fall below a certain price in a limited expiry time.

Is binary options trading safe?

The safety of trading binary options largely depends on the broker you choose. Opting for a reliable, regulated broker like Nadex (North American Derivatives Exchange) can enhance the security of your trades. Our comprehensive reviews of various brokers, both regulated and unregulated, shed light on their strengths and weaknesses to aid your decision.

It’s safer if you trade with a regulated broker than a unregulated one!


Is binary options trading safe? The safety of trading binary options largely depends on the broker you choose. Opting for a reliable, regulated broker like Nadex (North American Derivatives Exchange) can enhance the security of your trades. Our comprehensive reviews of various brokers, both regulated and unregulated, shed light on their strengths and weaknesses to aid your decision.

Through extensive research, we’ve found that regulated brokers are generally more trustworthy and less likely to engage in unfair practices. While many unregulated brokers also operate reputably, there’s an inherent risk due to the lack of oversight.

So in conclusion, is Binary Options Trading safe? Yes, provided you select a regulated broker and conduct your own due diligence before investing. Our insights aim to guide you, but it’s crucial to verify the information and understand the risks involved in binary options trading.

There are a handful of safe and well-known regulators. If your chosen broker is regulated by one of these companies and institutions, it’s a good sign:

Also be aware if trustful institutions such as the Commodity Futures Trading Commission (CFTC), the National Futures Association (NFA), or especially the Securities and Exchange Commission (SEC) express concerns.

➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

The conditions of Binary Options trading:

You can trade any underlying asset you can imagine – and your broker offers. The process is always the same whether you choose stocks, commodities, forex, or crypto. Most of the brokers we tested allow you to trade more than 100 different assets.

The expiration time differs from broker to broker. But most of them offer expiration times from 5 seconds on. The upper limit is mostly one hour or three hours.

So the two main conditions are:

  • Trade any underlying market you wish: stocks, forex, commodities, cryptocurrencies, and many more
  • Choose between short-term and long-term time horizons (expiration times)

How high is the maximum yield (return on investment)?

Not every broker offers the same maximum yield (return on investment) for a specific asset. For example, broker A may offer a 90% payout for Bitcoin, and broker B might offer 85% for the same cryptocurrency. The better choice here would be broker A.

The unwritten rule is that short-term trades have the highest payouts while long-term payouts aren’t that high. From my experience, the yield for standard accounts is between 70% and 95%.

But if you have a VIP account, you may have higher yields. Almost all brokers offer different account types linked to the amount of money you deposit. For example, if you deposit $3000 with the IQ Option, you will get the VIP account status.

iq option vip account support
Screenshot of an IQ Option VIP Account

This is to incentivise traders to deposit more money into their account to trade with.

➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

Trade types available in Binary Options Trading

When the binary options were first introduced in the market, they had only one trade type, which meant the same. These were ‘High and Low’ / ‘Call and Put’ or ‘Up and Down.’ 

Many other trade types were proposed with the growth in the number of binary traders and their popularity. Here are some of the most used binary trade types. 

#1 One-Touch or No-Touch

For the One Touch or No Touch binary options trade, you’ll need to make three key decisions. Firstly, select the asset you want to invest in. Secondly, determine your price target. And thirdly, choose when your trade will expire.

Setting your price target involves strategic thinking: the more ambitious your target (farther from the current price), the higher the potential payout. Conversely, a target that’s closer and easier to achieve will offer a smaller return.

Touch or no touch Binary Options

If your asset reaches the set target point even once before the expiration time, you will get a profit. Before making a trade, two things are to be looked for

  • The reach of the price target

Set the price target diligently. It could be in any direction and, with careful analysis, judge the price flow. While setting, pay attention to the trade cost and payout value.

  • The expiration time

All it takes is one touch to give you profit, even if the market goes in a different direction afterward. Many platforms offer expiration time up to days, so set the time you think is enough to reach the triggered point. 

#2 High or low

High or low Binary Options

Here, you have to examine whether the asset you choose will exceed the strike price on expiration.

If you believe it will, select high; if not, select low. The time of the trade’s termination can vary. This trade type is basic yet has its own risks. Therefore, before placing any trade, examine the price movements thoroughly.

#3 Range trades

It is also known as boundary trade. In this trade type, you choose an asset and trade within the range of two triggered points. If the price stays between the boundary until expiry, you will win and lose if it passes the range. 

For instance, the strike price of an asset is $50, and you believe it will go high up to $60. You trade in the range of $50 to $60. If the price of your asset remained between this boundary during the entire trade, you would get your profit. You will lose the entire investment if it surpasses $60 or falls below $50. 

#4 Short-term trading

Many brokers use short-term or 60-second trading, and seeing the upsurge in its popularity, many traders are inclined towards it. 

It works like the high/low trade with an expiration time of 60 seconds. Some brokers in short-term trading also offer a trade termination time up to minutes. 

60-seconds-trading

#5 Long-term trading

The opposite of short-term, this trade type allows you to set the time limit up to days, weeks, or sometimes even months. 

Most beginners prefer this type as, in the short term, the trade goes fast, and you have to be active and consistent all the time, whereas, in the long term, you get more time to develop skills and study the charts. 

➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

#6 Pairs 

As the name suggests, this trade type is performed in pairs. You have to choose which asset will perform better than the other at the expiry of the trade. You will gain the profit for your correct judgment, and for the wrong one, you will lose. 

The pairing of currencies and stocks is very popular. For instance, in the EUR/USD, you believe that USD will go higher than EUR and place your bet. After the expiry, USD outperformed EUR, and because your prediction was correct, you won. In the opposite case where EUR goes above, you will lose. 

Even if the pairing equally goes down, you will win as long as your asset has a higher value than the other.  

#7 Ladder

In this type, the trade is broken into smaller portions spread over different intervals. Each time when the strike price touches the triggered point, you will receive a partial bonus

Your trade is divided into different strike prices with varying times of expiration. When you reach the first interval, you will receive some profit. 

For example- you are ladder trading the currency pair of USD/EUR, which you believe will go high. At noon, the value of your asset is $60. You chose three strike rates and three different expiration times. 

  • 1st strike is set for $60.85 with a payout of 40%; the expiration time is 12:20 pm.
  • 2nd strike is set for $70 with a payout of 55%; the expiration time is 12:40 pm.
  • 3rd strike is set for $70.45 with a 70% payout; the expiration time is 01:00 pm.

To win this bet, USD/EUR must reach $60.85 or above at 12:20 pm. If it happens, you will get the 40% payout, and subsequently, for every rung you climb, you will receive the mentioned profit. 

Remember that the payout value will change according to the difference in the intervals. If the gap in the strike prices is small, you will get less payout because it involves less risk, and for a large gap, the profit will increase.

Risks of Binary Options Trading explained:

No doubt – Binary Options are a risky financial instrument.

However, the benefits often surpass the risks. A common concern for newcomers is the possibility of losing their entire investment in a single trade. While it’s true that the amount you invest in a trade can be lost entirely, it’s also important to note that you cannot lose more than what you’ve invested. This contrasts with several other financial products where it’s possible to incur losses exceeding your initial investment.

One of the standout perks of binary options trading is the potential for high returns, regardless of market volatility. As long as the price of your selected asset moves above or below your strike price, you’re in the win zone. This simplicity and the opportunity for quick profits are exactly why many traders, ourselves included, are drawn to this type of trading. It’s straightforward, and you can see significant gains in a relatively short period.

Only invest money which you can afford to lose!

Should you use a Binary Options demo account?

Many of you ask us if it is necessary to first trade via a demo account. Our clear answer is: Yes, it’s necessary. A demo account lets you learn how the market moves and how your chosen broker works. Almost all reliable brokers offer a demo account with virtual money that you can top up with just one clock.

Switch to the demo account for Binary Options
Switch with one click to your demo account

Learn about your Binary Option trading platform before you invest your real money. You can also try out new strategies or form your own, individual trading strategy through a demo account.

  1. First: demo account.
  2. Second: Strategy.
  3. Third: Real account.
Best binary broker:
(Risk warning: Trading is risky)

Quotex - Trade with high profits

123455.0/5

Quotex - Trade with high profits

  • Min. deposit $10
  • $10,000 demo
  • Professional platform
  • High profit up to 95%
  • Fast withdrawals
  • Signals
(Risk warning: Trading is risky)

How to open your first real account

You must fulfill different criteria once you’re ready to open your first real account. On most trading platforms, you can trade without verifying your broker account. But in our opinion, you should do the verification before getting started, so you have unlimited access to all functions and deposit and withdrawal methods.

Verify your trading account for Binary Options trading
Verify your email and identity for full account access

For the verification process, you need your real personal data (full name, birthday, address, mail, phone number) and some personal documents. You have to upload for example a copy of your passport and a utility bill or similar. You have to do this to prove that you are a real person.

The verification process only takes 24 hours in most cases. Some brokers – not many – don’t want to see any documents or verification.

How much money do you need for trading Binaries?

The answer to this question depends on how you are willing to invest. Always stick to your risk and money management. Many brokers offer low deposit minimums. For example, Quotex or IQ Option enables you to start trading with just $10.

5 USD minimum deposit amount on binary trading
The minimum deposit amount

The upper limit is almost endless. From my experiences in the past years, it’s possible to earn a lot of money with the right trading strategy. So it’s not necessary to invest all your money when getting started. Just start slow and if your strategy turns out to be tremendous, deposit more.

How much risk per trade?

The term “how much” refers to several factors in the binary options trading field. It denotes risks, effort, time, and money. It is always safe to risk not more than 1% of your funds per trade. You can protect your capital by reducing your trading risks. You will lose a small part of your capital even if you lose trades through many mistakes.

First, you need to set up the percentage of your trading capital that you will be willing to put your money on the line on one binary options trade. The ideal percentage must be 1% or 2% of your trading capital. You can go up to 5%, but it is not safe on all occasions.

It is determined by the kind of binary options deal. This 5% risk will give a greater position size to you for standard binary options trades. You can then calculate the number of contracts you can take. You need to calculate contracts to allow you to remain within the limit of your risk.

  • A high risk of up to 10% of the trading account can result in a fast account blow up
  • Always trade with limited risk, like 1% of the trading account per trade
  • A limited risk will remove your emotions while trading
➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

All about deposit and withdrawal methods:

Maybe you already asked yourself which payment methods are available when trading Binary Options. In the past, many brokers did only offer some special payment and withdrawal methods. Nowadays, the market is user-friendly and brokerage firms offer many different payment methods.

Facts about the deposit

  • Many platforms offer a minimum deposit of $10
  • Minimum trade amount: $1
  • High amounts can be traded as well
  • The minimum deposit for a Binary trade depends on the broker
Payment method for depositing on Binary Options platforms
A few possible payment methods

Deposit and withdrawal are easy. Most brokers do not offer any fees for depositing or withdrawing your funds. Many of them offer up to 20 different payment methods. It’s possible to capitalize on your trading account within seconds. The withdrawals last a little bit longer, up to 24 hours.

Some of the major payment methods Binary Options brokers offer:

  • Bankwire
  • Credit Cards (Master/VISA)
  • Cryptocurrencies (Bitcoin, Ethereum, Ripple, and more)
  • E-Wallets (Skrill, Neteller, FasaPay, ePayments, Yandex, and more)

Are there bonuses for deposits?

To attract new customers, almost all Binary Option brokers offer a free bonus when you top up your account the first time. Some brokers even offer a bonus every time you deposit money. In both times, it can vary from 10%, 20%, 30%, 50% up to even 100%.

In other words: Some brokers double your amount of money.

Deposit-Bonus-of-Olymp-Trade
Olymp Trade offers a deposit bonus up to 50%

Be aware of the fact that the bonus isn’t completely free. In most cases, you have to reach a certain turnover with the bonus before you can withdraw your funds. For example, you need to make a turnover of 30x the bonus you got. The bonus isn’t mandatory. So if you’re not good with the conditions, turn it off.

Get a free deposit bonus of 50% at Quotex with our promotion code “bobroker50

You can only use this bonus code by signing up via our website.

➨ The best broker: Sign up for your free Quotex bonus!

(Risk warning: Trading involves risks)

How much money can you earn by trading Binary Options?

It’s up to you, how much money you will earn by trading Binary Options. The key to your successful career as a trader is a good education, risk management, and a professional strategy. Also, your money management has to be good.

At first sight, it is easy to make money with Binary Options. But if you’re getting more into it, you will experience that the markets, especially for beginners, aren’t that easy to understand. We are sure, that your success won’t come immediately.

Making money on profitable trade on Binary Options
Some profitable trades in a row

It’s normal that it takes some time until you see progress and the winning rate of your trades gets higher and higher. The more trading decisions you make, the better you get.

Let us give you some more insights into four specific topics that are directly linked with your success as a Binary Options trader.

Education

It’s the most important rule for beginners: Educate yourself before getting started. Use the educational sections most of the Binary Options brokers offer. Use websites like ours, and YouTube videos, and read books to learn about trading and the financial markets. Use technical analysis tools to boost your trading skills. And of course trade via the practice trading account to learn the mechanisms of the markets and assets.

Strategy

Once you know the theory about trading and Binary Options it comes to real trading and you will see: It differs a lot from the theory. Trading a Binary Option requires analyzing charts, fundamental analysis, and a feeling for the markets and assets.

Follow the trend strategy
Example for the “Follow the trend” strategy

So develop your own trading strategy, otherwise, you will blow up your account. Use the knowledge of our website as a base and create your own strategy for each Binary trade.

Here are some of the main trading strategies that you can have a look at and use for your next Binary Options trade:

  • 60-second strategy
  • Candlestick pattern strategy
  • Next candle prediction strategy
  • MACD strategy
  • Fibonacci Retracement strategy

Indicators and tools:

Every platform offers a few indicators, technical tools, different chart types like the most common candlestick chart, and many more things to analyze your charts. Some brokers even give you free and direct access to economic news. You can use that to be up to date all the time and react to the news that impacts the assets you trade with.

Pocket Option indicators
Pocket Option offers a bunch of helpful indicators


A quick note on indicators: They play a crucial role in Binary Options trading. It’s worth taking the time to understand key ones like MACD, RSI, and others. Dive into the linked article for a deeper insight into how to leverage these tools effectively.

Money Management

Many of the retail traders I know had to learn how real money management works. That’s why we recommend getting familiar with it before you start trading.

Money-management-with-Binary-Options
The investment amount is 1% of the account balance

In my personal opinion, never use more than 0,5 to 3% of your account balance for one trade. Even if you have bad luck and a losing streak, it won’t get you down. If you stick strictly to your money management, you can trade without emotions.

Signals

Have you ever heard of trading signals? Professional traders offer trading setups and signals that you can copy. If it is a reliable trader, you can trust him or her. But be careful: There are a lot of scams and unsuccessful signals.

Tax

When you earn some profits on the financial markets, most of the time you have to pay capital gain taxes. The Binary Options tax rules are different from country to country, but you should definitely take a look at it if you do financial transactions. We recommend visiting your local tax lawyer to check the taxation on Binary Options. From our experience, the tax rate can be from 0% up to 30% or more on capital gains.

Best binary broker:
(Risk warning: Trading is risky)

Pocket Option - Trade with high profits

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Pocket Option - Trade with high profits

  • Welcomes international clients
  • Offers high payouts: 90% – 97%+
  • Professional-grade trading platform
  • Swift deposit process
  • Enables Social Trading
  • Provides free bonus incentives
(Risk warning: Trading is risky)

Conclusion and checklist: How to trade Binary Options with simple strategies

You have to be aware of scams in the Binary Options market. But the financial instrument itself isn’t a scam. It gives you the chance to invest in short-term or long-term opportunities in the market. Therefore you can select any asset you want and the functionality of a Binary Option is easy to understand.

Trading binary options with Pocket option
Trading Binary Options is a good way to earn a lot of money

My honest advice to you as a professional trader: It is very important to choose a good and reliable broker. Don’t register with the first broker that comes to mind. Check reviews, the Securities and Exchange Commission (SEC), and make sure, it’s not a scam!

Watch out for this short trading checklist for beginners:

  • Select a trustworthy broker
  • Register and verify your account
  • Use the demo account to get into it
  • Deposit money and switch to the real account
  • Choose an asset or market to trade
  • Analyze the chart
  • Forecast the price movement (up or down)
  • Choose the expiry time (short-term = higher payout)
  • Set your investment amount
  • Place the call (higher) or put (lower)
  • Use a trading journal, especially if you’re a beginner

With this little checklist, we have shown you everything you need to know about trading Binary Options. We wish you the best of luck and happy trading!

➨ Sign up with the best binary broker Pocket Option now!

(Risk warning: Your capital can be at risk)

FAQ – frequently asked questions:

Can you really make money with Binary Options?

Yes, it’s possible to earn money with Binary Options. But be aware: 80% of traders lose their money. To belong to the other 20%, you need a working trading strategy and sensitive money management. Do not trade too much multiple contracts and use too much capital for one trade.

What are the best brokers to learn Binary Options?

First of all, get familiar with the financial instrument and your chosen broker via using a demo account. After you developed your own strategy and feel comfortable with your decisions, switch to a real account. Common online trading platforms are Quotex, IQ Option, and Pocket Option.

How do you master Binary Options?

It is important to understand how the market goes. Therefore you have to develop a trading strategy, learn the technical analysis and use indicators to analyze the chart of an asset. Use books, videos, our website, and many more educational tools to get into Binary Options trading. The learning process never ends.

Are Binary Options a good investment?

When you understand, how Binary Options work and created your promising trading strategy, Binary Options are a good investment, just like better-known Forex trading for example. But be aware that it isn’t risk-free.