It is said that when a phenomenon is very popular you should beware because not all that glitters is gold. Yet, if you follow the rules, you will end up on top and be smiling to the bank. Binary options, also known as ‘all or nothing’ options is a trading option that gives you the opportunity to either get the whole of a fixed amount or asset or nothing at all.

binary options

Everyone stands a chance with binary options, whether you are a beginner trader or an expert trader on Forex. All you have to do is be familiar with the fundamental and technical know-how.

Important things to note when working with Binary Options

Trading strategy

You would do well to know all options offered by a broker before forming your trading strategy in binary option. Your trading strategy would be based on whether your transactions are long, short, fast or rare. Your strategy would have to suit your own preferences, running time, amongst other factors. For example, if a risk is not something that agrees with you then obviously, a transaction with high volatility or short trading span is not for you. What would be more agreeable to you is a transaction that spans over a long period, giving you time to calculate the risk and predict the progression of prices.

You must also understand the system that comes along with each asset. What works well for currency, might not apply in trading stocks.

Money management

If you are banking on the financial management and safety tips that come as a package in most trading strategies then you might be in for a rude surprise because they are only triggered under peculiar conditions. Thus, it is best if you come up with your own money management rules and strictly adhere to them so as to make trading with Binary options much more stable.

One thing that must be taken due consideration is risk management because in the long run even if you don’t make a profit in binary option, you should be able to regain your capital. To ensure this, the following guidelines will help:

  • Don’t use more than 5% of the entire amount or more than 10% in more than one transaction. Whether you use day or turbo options does not matter, by the way.
  • The profit to be made is based on the number of winners and amount of losing trades. If you try and increase the amount of the subsequent deals, most likely you will run at a loss.


There is no point in learning if you don’t put it into use. Practice is how to gain mastery. If you are just venturing into trading, then you should start with a demo account. Demos don’t require that you put in real money but it still gives you the feel of real trading. From there on, you can graduate to trading in small amounts. Don’t get carried away by flashy offers you may come across on the internet either. Hold on to your skepticism and keep trading in small bits till your skills grow.

Right frame of mind

To excel with binary options you would have to work on your frame of mind. You should be able to rein in your greed or fears and calculate every move before you make it. Anxiety and stress can also affect your decision-making abilities so you should focus on getting those under control, should you be experiencing such. Emotions that you should encourage are joy and a safe dose of skepticism. Keep your mindset positive as well and learn to keep your cool even under pressure.

Choosing a broker

Brokers are intermediaries through whom you trade binary options. You would have to take care to choose a company that is legit and reliable. A step in confirming how legit they are is by looking up their license and comparing the quotes they give you against what is really in the market because many brokers might try to make an unfair profit on you. You can check this by running the terminal addition of any broker and compare in real time.

Another factor you must take into consideration trading binary option is the level of security on the site. There must be safety measures like confirmatory messages sent to your phone, reinforced authorization and whether or not the site is supported by HTTPS (without the ‘S’ it means there is no additional security).

Can you make money in binary options?

This is the crux of the matter. For all the hype surrounding Binary Options, it is not as awesome as they make it appear. The best way to preserve your capital is by making sure you make a profit in six out of every ten transactions. Also, before you can earn, you would have to 70-80% winning trades. Obviously, if you are relying on luck then you will lose. It is best you comply with the guidelines explored in this article.


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