When you start binary options trading, you’re a beginner with little experience and need to find out how things work. Generally, you’ll start small with a limited number of low value trades on a restricted number of underlying assets. This lets you reduce your risk while you’re learning and allow you to find your way at minimal cost.
Once you’ve learned how things work, you’re past the beginner stage and are ready to move on. You may not want to trade binary options professionally but will want to move up to the next level and become a basic trader. Binary options trading is ideally suited to this because it offers a wide variety of trading methods and strategies that are ideally suited to all trader types.
Moving up from being a beginner to a basic trader isn’t a particularly big step. You may simply increase the value of your trades and trade more frequently to make the most of your opportunities for profit. You can also expand the number and type of assets you trade so that, by diversifying, you can take advantage of price volatility to make more money.
Expanding the assets you trade does mean more work for you because, to trade successfully, you must conduct thorough fundamental and technical analysis on each one. However, an advantage of binary options trading is that you can choose the assets you want to trade and so can limit the number and type depending on the amount of time you have available for analysis and research. Don’t overstretch yourself because that will mean you’re not doing the job properly and won’t achieve the results you want.
When you start as a beginner in binary options trading, you’ll generally start with the simple trades of a call option when you expect a price to rise or a put option if you think a fall is due. However, as you gain in experience, you may move on to more complex trades that may have more risk but give greater opportunity for high profits.
The basic type of call or put option is often known as ‘cash or nothing’ because you get paid out if you predict the direction of movement correctly but get nothing if you’re wrong. You may also choose ‘asset or nothing’ where the amount paid out varies with the value of the asset. After that, there are ‘touch’ options where you predict the price will reach a certain level even if it doesn’t remain there and other variations such as ‘no touch’, ‘double one touch’ and ‘double no touch’.
The choices are wide but the principles of through research and reasoned trading stay the same for a basic trader. And although you may not need the same level of help, you’ll still want some support so choose a broker that provides it.