If you’re reading this there’s a good chance you’ve come across many articles that claim it’s easy to make money with binary options. The truth is binary options are easy to trade but making money with them is a little harder.
Before I go on I should say that binary options trading, just like any other form of trading carry’s significant risk to your capital, so if you’re going to trade them you should only trade with money you can afford to lose.
The beauty of binary options is that you can trade them with significantly less capital than you need to trade traditional options, you just need to be aware of the risks involved before you start trading.
Binary options are pretty simple to understand since they only have two possible outcomes. You either win or you lose, think of them in the same way as making a bet. The main difference is, with a bet you have no control over the outcome, with binary options you can swing the odds in your favor, but only if you learn how to read the markets.
To make binary options profitable you need to be right more times than you’re wrong. Because there are only two possible outcomes to a binary option trade you could guess and be right 50% of the time long term. But if you did this you would lose money overall.
The Recommended Way to Trade Binary Options
To make a profit you need to be right at least 60% of the time and to make any real money you need to accurate 65% to 70% of the time. Obviously this can’t be achieved by guessing, so you’re going to have to learn how to read the markets.
This is easier said than done, so it’s going to require a little dedication on your part, looking for key trading signals and learning how to trade them is the only way to make money using binary options.
So where do you start? We’ll we’ve got a great article about using technical analysis to spot trends in the market. After reading this you need to learn a few basic chart patterns and then finally you can put all this together into a basic trading strategy.
Even when you’ve learned all this you’re still a long way from being a successful trader but at least you’ll be on the right track. Initially you should be breaking even and eventually with a little more practice move into profit.
Trading binary options won’t make you rich but you should be able to build up a small amount of equity to invest in more conventional options. And what you learn whilst trading them will stand you in good stead as you develop your trading career.