Binary options are new to most people, they’ve only been available to the public since 2008. Most of the major brokers in the US still don’t offer the opportunity to trade binary options, but they’re gaining in popularity fast.
So why should you trade binary options anyway? They’re just another way for brokers to make money right! Well yes, but there are benefits to trading binary options over traditional options, especially if you have limited funds available.
To start trading traditional options using proper money management techniques you need to deposit several thousand dollars, where as you can start trading binary options with as little as a few hundred dollars.
Trading binary options is also a lot easier to learn than traditional options, so if you’re a beginner with limited funds you’re much better off starting with binary options and when you have more experience and capital to play with graduating to traditional options.
But beware, because of the simple nature of binary options some people think of them as gambling. In fact the way binary options are traded is similar to making a bet as there are only two possible outcomes, you either win or lose. The basic odds system replaced with a percentage payout.
This attracts a lot of people looking to make a quick buck which in turn has given binary options a bad name. But if you’re dedicated and prepared to learn how to read the markets, trading binary options can be very lucrative.
They can be traded part time without constantly checking the markets, so they’re perfect for trading whilst you’re at work. There aren’t many jobs where you can spend all day looking at a trading screen, unless you’re a professional trader of course.
With most binary options strategies you only need to check the market three or four times a day, and that’s for intraday trading. If you can’t manage that you can trade daily which will only require checking the markets at the beginning and end of each trading day?
What do you need to trade binary options? Well first off you’ll need a broker; you can find a list of top binary option brokers here! Once you have a broker you need to learn how to read the markets. This does not mean guessing, leave guessing to the gamblers, we’re looking to build a profitable strategy that will generate consistent profits for years to come.
We’ve got a good article on how to develop a profitable binary options strategy here. It covers the basics of money management, technical analysis and executing trades. Once you’ve got a good grounding of the basics you can move on to actually executing trades.
A good binary options strategy should be able to deliver a 60-70% success rate which is enough to make significant profits in the long run. You’ll never be right 100% of the time and learning to accept losses is all part of trading.
Once you’ve built up your equity you can always move onto trading traditional options later on. The lessons you learn here will stand you in good stead as you gain in confidence and develop your trading strategy.