5 Incredibly Important Things You Need to Know About Binary Options
Since the introduction of binary trading into the mainstream financial market, it popularity has increased steadily over the years. Surprisingly, despite its popularity, lots of folks are still uninformed when it comes to the basics in this industry. It can be quite exciting phenomenon to make your first deposit and start trading binary options online, especially with the prospect of receiving a tempting bonus offer from your broker. However, without adequate understanding of binary options and how the brokers operate, it could be quite easy to lose the initial trading deposit and also the interest to continue trading on binary options. So in this article, we are going to discuss some basic things that a binary option trader, regardless of experience, needs to be aware of in order to stand a chance of being successful in this industry.
The Bonus – What You Should Know About It
You must have seen a lot of binary options brokers offering mouth watering bonuses. If you are still confuse about what it means, here is a how it works: you are given a certain percentage of whatever amount you invest with a particular broker. For instance you invest $2000 with broker A, who gives you a 50% bonus of $1000 to trade with, so you have a total amount of $3000 in your trading account, available for you to trade with. Bonus varies from broker to broker. However, it is important you don’t assume that you are allowed to trade the bonus and withdraw anything remaining of your deposit if you lose. Most brokers deduct the bonus from your balance. Some other brokers will not allow you to withdraw a cent if you have not traded to the required volume to warrant a withdrawal. To summarize, if you have to accept a bonus offer, it is important that you understand all what is involved before going ahead. You should read their terms and conditions as regards the bonus to determine if you are ok with it.
The Disclaimer – Why You Should Pay Attention It
“HIGH RISK INVESTMENT WARNING: Trading Binary Options is highly speculative, comes with a high level of risk and may not be ideal for all type investors. You may sustain a loss of some or all of your invested capital; therefore, you should not speculate with funds that you cannot afford to lose.” Regulated and licensed Binary Option broker are mandated to display this or similar disclaimer on their platform. Other financial trading platform are required to do this as well. As a smart trader you should read and totally understand it before proceeding. This is needed to clear up the assumption that binary options is easy and a guaranteed means of making stupendous amount of money over night. Nothing can be further from the truth. Binary option is a highly speculative and carry a high amount of risk which may result in you losing some or all your capitals. This however is not limited to binary options alone. Other financial trading instrument like forex and stock carries the same amount of risk.
The Chart – A Smart Traders Number 1 Tool
It is hard to be a successful trader without charts and smart traders knows this. However, binary option brokers do not offer charts as part of their tool. The best you can get from them is some price line that bears absolutely no resemblance to a complete chart. You also won’t get any candlestick or indicator with which you could at least draw a line or add a moving average- the basics of technical analysis. To get around this, all you need to do sis register with a third party charting package like a demo account from a forex broker like MetaTrader.
You Have an Account Manager – But Trust Yourself
As soon as you open an account with any of the popular binary option trading platform, you will be furnished with an account manager. These account managers are there to offer trading advice and can also trade on your behalf if you allow them. However, contrary to how they will present themselves to you, these guys are no veteran traders or experts in the financial market. And you have to be aware of this. They are more knowledgeable in salesmanship than trading but most of them would want to make you believe otherwise. Sometimes, you may be lucky and get a financially sound account manager but is case is usually an exception not the norm.
Trading is not a piece of Cake
We need to discuss this in order to clear up the general notion that binary trading is easy- it is not. Virtually, all brokers claim that you do not need prior experience or expertise in financial trading. They will also tell you that binary trading is as easy as picking a financial asset and trading it. Well, nothing can be further from the truth folks. Yes, trading binary options is easy but picking the right asset and direction is not. Don’t be deceived. If you want to be successful at trading binary options, you need to put in a lot of work and do your homework properly.
Finally, while there are quite a lot of rogue brokers and scam artist parading themselves in this increasingly popular financial market, understanding some basic trends and phenomenon can put in on the path to becoming a highly successful binary option traders. And to do this, you need to put your nose on the ground and learn. That is the only way – no shortcut.