Sunday, April 23, 2017

What is Binary Options?

There are many trading methods employed when trading stocks, assets and foreign currencies. Among these, the most popular is the Binary options. Its popularity has grown over the past couple of years thanks to the internet making it possible for people to perform trade in the global market. However, this T has been used by banks and investment firms for decades and has been around for more than a century.

Binary options are the easiest form of trading as its simple instructions require a trader to choose one prediction out of two. The two predictions include up or down. This is the direction a trader feels the market will go. Prior to making any predictions, a trader should first invest an amount into a broker company to proceed with trades. He then gets to make his prediction under a selected time limit known as expiry time. If his prediction is correct, he wins a profit. But, if his prediction is incorrect, he will lose his investment. Click here for more information.

For example, a trader invests $100 with company XYZ at 1.00p.m and predicts that an underlying asset will go up by 1.30p.m. If the underlying asset goes up before the time expires, the trader will gain a profit of say 75% his investment. If the market does not go up, the trader loses his $100 investment. There are a few times when a trader may feel that he will lose a lot of money and opts to exit the trade.

Trading software is the most important tool that a trader can possess (other than his mind).  You need confidence that your software will be reliable, have low latency (information is as current as possible), and will be easy enough to navigate that it doesn’t cause unnecessary user errors.

The rewards in binary options and risks relate to each other as the greater the risk, the greater the reward. Traders should know the payout amount and risks involved when they make an incorrect prediction. All in all, binary options is the most convenient form of trade and with the right tools, traders may make more profits than they could imagine. 

Downloading a software program is not required to trade binary options, the trading software is entirely within the online platform.  This makes it easier for the trader because there are not separate programs to load to enter trades.  Simply sign into your account online, and you can begin trading live immediately.  The best binary options trading software is a platform system that is clean, efficient, and simple for the user to learn.  At How We Trade we use Tradorax, because their straight-forward platform really limits any trade entry mistakes a trader may be inclined to make.

Binary options are not necessarily easy to master, but mechanics of trading them are simple, and entering trades needs to be just as straightforward.  Trading software leaves no excuse for making order entry mistakes.  Order entry mistakes are a trader’s worst nightmare because of how quickly profits increase, as a traders winning percentage increases there is a very thin margin for a trader to make mistakes if they wish to maintain their profitability.  One order entry mistake can cost a trader a fortune if the mistake is large enough.  Using the best software is the easiest way to reduce the probability of making this type of mistake.

We know that trading software makes choosing to buy a call or a put extremely easy and clear.  They make it very difficult to accidentally buy a call if you really wanted a put, or vice versa. There is even an order verification options before the trade is actually final (we recommend you keep this option on) so the user always can be confident that they are placing the trade they intend to place before it is final.

With their binary options software platform (as with any good software platform) the trader can then track the current price of the underlying asset or security in real time, and easily tell if the trade is in the money.  Multiple trades can be entered and tracked at the same time, and they provide the updated expected payout value as prices move.  Having the lowest latency possible is crucial to a trader’s ability to read a stock and to predict the future outcome with the highest chances of success.
We always recommend that you use low latency software.

They also allow the trader the ability to withdraw their earnings and balance very quickly, and fund their account very easily.  Using a straightforward system leaves this process relatively stress free for traders, so they can focus on what matters the most, their trading!  There are no hoops to jump through for a trader to add or withdraw money from their account, and a trader has complete control within the online platform.  Always make sure that any broker you use makes accessing funds very easy.  We know that no one wants to fight to retrieve their own money from their account.

Many software platforms offer very similar functionality, but perhaps the most important feature is the reliability.  Make sure that any binary options trading software you use offers extremely high reliability for their traders.  You do not want the software to crash when you are in the middle of a trade.  We want you to be able to watch all of your trades with the highest precision possible, to free you to make the best decisions that you can make.

Also make sure the broker you trade with offers a high quality customer support service, who will answer any questions about the software system or trading.  It is paramount that a trader completely understands every feature of the platform before trading, and any reputable broker will be happy to walk a trader through their software.

For these reasons we use VirtNext, but ultimately a trader needs to be comfortable with the software and trust the brokers systems.

Article by,
Ashley Maynard