Category Archives: Investing

The Important Points on Derivatives in Financial Markets

As you are already aware of the definition of derivatives you need not focus on the definition once again rather let us check out the more details. There are many types of derivatives traded by the traders in the United Kingdom and they are pro at it. If you also want to become a pro trader like them you should make sure to focus on the complete picture of the derivative.  We will particularly detail out about a derivative which must be taken into consideration.  There are many traders in the financial market who prefer to trade this particular derivative because the benefits obtained are invaluable. The advantages obtained from the ETFs are such as tax efficiency, diversification, low expenses and much more. If you are new to the market you would have a hard time in understanding what the market is and you will struggle to profit from the market. If you are not making profits at the beginning you should not give up instead keep trying. The one who tries gets the best so you should try to make profits from the market. Thus, let us improve the knowledge by reading the article.

Being a new trader in the financial world you have a lot to learn about the structure of the market. If you don’t give yourself enough time in educating yourself then you are not going to become a successful trader. Trading is just like running a business against the most competitive competitors. You must have a valid trading system to make a profit on a regular basis. It’s true that at times you will face losing trades but this is absolutely fine. Learn the technical and fundamental analysis very precisely and try to develop your own trading system. Never trade the market based on other people opinion. No one knows about the future price movement so belief in rational logic. If you want to shortcut way to make money in Forex then you are not the right fit for this industry.

The feature of standardization

The best feature of the ETF derivatives can be considered as standardization. It is very difficult to come to an agreement because the needs of the buyer and the needs of the seller contradict. But when you consider the exchange traded funds they are not like other derivatives because they are standardized. Each contact has an expiry trade so the difficulties become less. However, most of the investors and traders are attracted to this particular derivative because of many reasons. The liquidity management involved in this particular fund makes it worth considering. The growth of this particular fund has increased immensely because the traders who are interested in the ETFs are increasing day by day. You will be able to manage your portfolio as well. Actually, this has changed the market to a better condition.

The numerous opportunities

You can even purchase the derivatives of the trading market at any time because traders are offered with numerous opportunities. There are two ways to offset this particular derivative and they are such as selling the present position and the other way is buying the offsetting position. You can focus on these actions easily because it does not consume your time. The derivatives are user-friendly. One of the major reason why traders get attracted to ETF is it is easy to understand.

The Market Depth

Finally, you should have the understanding of the market depth. You should bear in mind that the market is liquid. When a market is highly liquid you need to be cautious. In a liquid market, you are likely to face many risks but make sure to handle it wisely because risks are the barriers to your success. However, you must get acquainted with the market knowledge if you want to become a successful trader.  As we have detailed out the ETF information you should take the time to learn it.

How to Improvise Stock Market Knowledge in Spread Betting

The retail traders like to think if they had stock market experience before investing in this market, they can make a lot of money. It is nothing but a wrong idea that most of the people in this market have got. If you think you can use your stock market knowledge in spread betting, you can make the profit but it would not help you very much in your career. Most of the time you will find that if there is nothing similar with stock market trading, there are more things which are different in stock markets trading. You cannot use the stock market knowledge full in spread betting but you can use part of its knowledge. Many traders think how to improvise their knowledge of the stock market in spread trading. It is not possible but you can use your knowledge of currency trading to get an edge over the market. This article will tell you why you need to use your knowledge of stock market not usable in spread trading. You can use it small but not as much as you would expect.

Spread betting

Spread betting is very much similar to Forex trading only with one exception. In Forex trading, you have to buy or sell the underlying asset to make a profit. But in spread betting, you just have to predict the future price movement of the financial instrument to make money. Other than this every other single trading parameters are exactly the same. For instance, you have to do all the technical analysis to make a profit in spread betting. Without having the proper knowledge about technical and fundamental analysis you won’t be able to find the sweet trading spot. It’s true that even after doing all the necessary calculations you will often have to face losing trades. But losing is nothing but a part of your trading career.

Most retail traders are using high leverage in spread trading. Leverage is just like double edge sword. If you can manage it efficiently then you can see exponential growth in your trading capital. On the contrary it can be very devastating in the hands of novice traders.

The trading basics is same

It is good news for you that the trading basic of Forex, spread betting and stock market are the same. When people are trading in Forex and stock market, they are trading with the currency pairs. They are buying and selling bonds, shares and many things. When trading in Forex is global, the stock market trading is local and you will care about what is happening in your country. Many people have a very good history of stock market trading but when they begin trading in Forex, they begin to lose their money. Some similarities do not say you are going to make a fortune in spread betting. To be precise spread betting and forex trading is almost identical.

The market is volatile and many factors influence the market

This Forex market is very volatile. You will have heard one thing very common among the traders of Forex. You will see that when most of the people are losing their money, they have said that they placed the trade in the market when it was a perfect trend and the trend was going in their favor. They placed the trades and the trend changed. They begin to lose their money and they have to close their trades to save their account. This is what Forex volatility can do to your account. You will not get this volatile experience on the stock market. The market is also influenced by many factors around the world. This is a global market and if the currency price of one country changes, you will also see the influence of the other currency pairs. The risks and the profits are many times more in Forex. You cannot do much with your stock market trading if you do not learn how to trade in Forex.

Lessons that We Should Learn from the Successful Trader

The common misconception among the traders who enter the market newly is that they believe reward of a successful trader is only money. We strongly, oppose the statement as it is wrong. When you become a successful trader you achieve more than money, in fact, money can be considered as the least valuable thing (just for the fact). If you want proofs you can witness traders who are successful in the market and have achieved many things more than money. In the Forex market, you cannot become successful that easily so think about traders who have become successful. The level of dedication should be at the top to become a successful trader. If you want to become successful you should not be a greedy person if your aim is to profit as much as you can then you cannot become successful.

You should have the intention to learn the market and trade the market to become a successful trader. There are intangible things which you could consider as the rewards for being a successful trader. What are the intangible rewards you can obtain? They are such as self-development, self-improvement, personal freedom, discipline, and patience. If you want to earn money you can do any kinds of jobs to earn it but if you want to earn the intangible rewards which we have mentioned you should trade Forex. Forex improves the level of a person both mentally and socially. The lessons you learn from a professional trader will help you to enhance a better living. Let us read to learn more.

Liberty and its importance

We all know that for each and every person ‘freedom’ is important of all. If we don’t have the freedom to speak we cannot speak our hearts out likewise, if you don’t have the freedom to trade you will not become a successful trader. When you start trading you will understand the value of the freedom. If you had done a job in which you need to go to the office at 8 in the morning and need to leave before 5 in the evening you cannot enjoy the freedom. If it is trading you will be able to trade from anywhere and you will be able to trade at any time so understand how much freedom you can gain from it.  You do not have to work constantly or you do not have to do the same thing again and again by trading you will be able to keep a full stop for the same routine in your life. Forex trading will be something which let you enjoy the freedom. ‘Money’ is the main concern of every human being but it will not improve your personality. If you trade Forex you will be able to improve your personality as well.

Risks and rewards

If you master the risks and rewards you will be able to deal the situations perfectly. When you are trading it is important to learn the risks and the ways to avoid it so you will be able to overcome the risks. A successful trader will know the techniques and tips to avoid the risks.

Discipline and patience

Discipline and patience are the important things in the life and even for an ordinary person those are important. But most of us do not have the patience and discipline but the Forex traders are the ones who have both the patience and discipline. Since they have these characteristics they will become a better person. So, the common misconception in every naïve trader should be corrected by learning about the successful traders.

Being a trader you should never think that you can lead your life without any discipline. Being your own boss you need to assess your trading performance once in a while. Try to read as much as you can since it will improve your trading performance and knowledge.

How to Pick the Best Trading Assets in the Market

Traders who are trading in the Forex market sometimes cannot decide which market to trade. There are many markets in Forex. Also, there are many major and minor currency pairs. When selecting the currency pair, most traders like to select major currency pair which is the right choice. When selecting your market, you have to know how to choose the best market for you where you can make the best profit out of your trades. The professional traders in the United Kingdom put a great deal of emphasizing on selecting the best trading assets in the market. To them, trading performance greatly depends upon the selection of the right trading assets at the right time.

Most traders think every market is equal in Forex. The market of Forex is not the same in the world. For example, if you ask any trader who is trading in the European market, he will say that this market gives the best movement in Forex. If you like market movement more than anything, you should trade on the European market. Many traders like market movements and choose European market as their favorite markets. It is the market movement where the price level moves and traders make money. As European market has the best movement in Forex, you should trade on the European market if you are fond of market movement.

But the market movement is not all the things that you should keep in mind when trading in the market. There are also some other things to choose when selecting your market to trade.

Select a stable market: Select a stable market where you will be placing your trades. If you select any market which is mad like a car and do not provide any stable movement, you will not be able to develop your strategy. A stable market will give you an idea of the market trend and you can place your trades in the market favor. It will also help you to analysis the market. Those who are trading CFDs for a long period of time always pick a stable market to avoid the false spike.

Select a market that goes with your currency pair: Not every market is best for all the currency pair. The market that goes best for your currency pair is the market of your choice. If you like any major currency pair and that pair have a market that goes in very well, trade in that market. Do not trade in a market where it is hard to find a movement for that currency pair.

The market you can understand: Select a market that you understand. If you do not understand the market you are trading, you will have no profit in your account. The professional trader at Saxo always suggests the novice traders master certain assets in the financial market. There is no need to trade all the assets since it will make your trading system to much complex. If you truly want to become a profitable trader in the financial market then you need to focus on fixed trading assets.

Use price action trading strategy

Price action trading strategy is nothing but the study of the raw price movement in the financial market. If you look at the professional traders then you will notice that most of them trade the market using the highly reliable candlestick patterns in the market. As a new trader, you should not learn all the candlestick pattern as it will make you confused. Try to learn the reliable candlestick pattern only as it will give you a more detailed overview of the trading system.

Summary: Trading is nothing but doing the most sophisticated business in the world. If you truly want to become a profitable trader then make sure that you trade the market with the extreme level of discipline. And always follow proper risk management factors in every single trade.

The Perfect Way to Trade the Price Action Signals in the Market

Price action trading strategy is one of the simplest and profitable ways to trade the market. Most of the professional traders in the forex trading world use the price action trading strategy in the market to execute high-quality trades in the market. If you look at the expert traders in the United Kingdom then you will notice that every single one of them is trading the live assets with the reputed brokers like Saxo since they offer an excellent trading platform to their traders in the market. But when you execute your orders in the market by using the candlestick patterns in the market there are certain things that you need to know in order to ensure high-quality trade execution. In this article, we will discuss how to trade the price action confirmation signal in the market perfect way.

Figure: Professional trading platform offered Saxo

Trade in favor of the trend

Most of the novice traders in the forex market tends to trade the live assets against the long-term trend. But when you execute your orders in the market against the long-term trend chances are very high that you will lose money in trading. The expert traders always identify the long-term prevailing trend in their online trading platform and then plot the key support and resistance level in the market. Once the support and resistance level is drawn they wait for the price action confirmation signal to execute high-quality trades in the market. It’s true that trading the price action signals in the market will be a little bit difficult for you at the initial stage but once you master the market basics you can easily trade the most reliable candlestick pattern with extreme level precision.

Higher time frame trading

The forex market can be traded in different time frame by following different trading strategy. Most of the novice traders in the forex market trades the smaller time frame by using their online trading platform and loses money. If you trade the smaller time frame in the market then chances are very high that you won’t be able to find the reliable candlestick pattern in the market. Unlike the novice price action traders the professional traders always execute their trades in their online trading platform by using the higher time frame. Though the system is extremely reliable and profitable yet you need to follow proper risk management factors in every single trade to reduce the risk exposure in the market.

Fundamental analysis

Trading the financial instrument is one of the most complex tasks in the world. Most of the novice traders in the forex market tends to trade the live assets based on technical analysis only. But if you truly want to master the art of trading then you need to focus on the fundamental factors also. Fundamental factors are often considered to be the most powerful price driving catalyst in the forex market. So if you think that you can execute high-quality trades with doing the fundamental analysis then you are completely wrong. Try to learn the basic fundamental analysis skills and this will help you to secure the best possible trades in the market. If you are new in forex trading then make sure that you are not risking more than 2 percent of account capital in single trade. And never trade with the money that you can’t afford to lose in the market.

Summary: Price action trading strategy can be easily mastered within a few months. But if you want to make money by trading the price action confirmation signals in the market then you need to have a clear understanding of the forex market.

Don’t Get Caught by a Binary Brokers Scam

canstockphoto9933347While there are great benefits that can be achieved for investors who use binary options trading, there are also a number of scams that are currently in play within the world of binary options. Some of these come from unscrupulous brokerage firms that avoid mentioning the risks associated with binary options, fail to disclose their trading practices and fees, or make it intensely difficult to access your funds after trades are made.

Here are some of the ways that you can watch out for binary options scams as you participate in the binary options market:

  • Independently Research Your Firms: Because binary options can be purchased through a number of countries, it can sometimes be easier for scam firms to slip through the cracks of regulations. Always do your own research into a company before you decide to employ their strategies or services.
  • Watch for Firms that Downplay Risk Factors: While a number of firms promise the moon, the reality is that there will never be 100% perfect returns with any brokerage firm. It is true that there are riskier and less risky investments within the world of binary options, so look for companies that are more transparent about their strategies and techniques.
  • Always Read the Fine Print: A lot of details can be hidden in the terms that you accept when you sign up to use a firm. It is easy to just skim through these and click on an option to accept the terms, but it is vital to take the time to truly understand what you are signing. Financially, all of the details that you need about a company are often in the conditions presented at the start of services, including payouts and bonus. Watch out for companies whose withdrawals require high limits or are not delivered for long periods of time in particular.
  • Security Protections: In an age where digital information can be used in a multitude of ways, it is important to verify that any financial firm is prepared to protect your privacy and your investments. You can also do a search for any past reported breaches in security or user information sold.
  • Check References: It is fairly simple to obtain reviews from other investors as to the quality of a given brokerage firm. Look for positive reviews from a number of platforms, never relying on the results listed only on a single platform, to get the best overall picture of the kinds of service that you are likely to receive from a provider.

Unfortunately there is always the risk of an online scam. But if you do some research on the company, read any others reviews and check the BBB you can pretty much eliminate the risk. And never forget the age old advice… If it sounds too good to be true, it probably is.

 

Binary Options Signals

success-1093889_640What do we mean speaking about binary options signals? They can be defined as the recommendations of the experts, made as easy-to-understand rules which can be implemented by traders. The reasons for traders to listen to these recommendations and to follow them may differ. They may suffer from the lack of trading skills or may have not enough time for thorough and effective financial analysis. We are glad to give you more information on signals in binary options and the main signal providers.

Not all the signal providers are equally worth recommendations. We have chosen the most reliable ones and bring them to your notice. You may check them out. We have paid our attention to the services which are free and provide auto delivery.  And these are the services where we could verify the received results.

Signals as a Way to Enlarge Gains

The main binary option problem of an average investor is to identify trading opportunities and to derive profit from them. The solution can be provided by the fundamental and technical analyses, the methods which can be of great use for any trader. Technical analysis can be understood as a method of analyzing the market activities aiming to predict further price movements. Fundamental analysis can be regarded as a method which involves the examining the long-term qualitative and quantitative factors of growth.

But it’s not all as easy as it sounds, and it is necessary to be highly experienced to use these methods in a proper way. Signals may be helpful if a trader has not enough time for thorough information examining and evaluation. Financial specialists predict potential development scenarios and make advice on what way to choose. In general this advice deals with the option expiry time, strike price, or the direction of trading. The chance of success in trading increases because these tips were given by specialists. And very often this chance is higher than if the traders did it themselves.

How Is It Possible to Take Profit of Signals?

The customers can get the signals in different ways.

The trades are to be placed instantaneously, if the signal is formed as a software instruction. In this case you need just to click the button.

You need to copy textual signals into the trading system.

“Auto-trading” service implies that the binary signal is delivered directly to the trading system. It may be rather interesting and helpful for you to know that auto trading software for binary options allows you to avoid placing trades. Everything will be done by the programme. Usually you even needn’t special trading interface.

Earlier the signal service were needed to be paid for. Today the things have changed, and it is a usual practice that such services are free of charge. You should remember about binary options signals expiration within definite time. The ways of signal delivery may differ, they may be delivered via various means of communication.

What Is the Way to Form Binary Signals?

Fundamental and technical analyses viewed above may be used as a base for the signal creating. Diverse trend line strategies and different indicators are also used in trading.

If a trader is good at the market analysis, he/she may try to manage it himself/herself. But even in this case they may take advantage of signals. Signals may be of great help for those who are rather sophisticated in trading, because signals may help to cover more opportunities.

Types of Binary Signals

The types of binary options signals are rather variable. Providers may base them on about any type of the underlying assets. The system takes into account the variety of assets available to the trader, and it is a commonly used classification based on the interests of traders. Also traders can classify the signals according to the types of deals he/she feels most comfortable with. And the signals may be also classified due to the source they come from, or if they are free or paid.

What Is the Difference between Push and Act Signals?

“Push” signals and “act” signals are the main types of binary option signals. “Push” signals mean that traders receive a notification via means of communication, which in the most cases is to be acted upon immediately. “Act” signals mean that a trader should wait for the asset price to progress to the point noted in the message and then follow the instructions.

In fact both variants of signals may have their advantages as well as disadvantages. “Push” signals seem more favorable, though they have time of expiry. The “act-type” signals’ advantage allows to deal without unnecessary haste, but sometimes necessity to wait becomes a trouble.

Signal Providers

To find a proper service provider is half the battle. Pay attention to the most reputed ones. With their help you will be able to increase the winning probability by 65% according to the statistics. In some cases auto trading software solutions can demonstrate good results, but specialists with financial experience are better anyway.

 

Binary Options Trading Basics

canstockphoto19654068The binary options trading, which took a firm position in the American market since 2008, has rapidly turned into a prosperous financial instrument. The line of demarcation between binary and conventional trading options lies through the idea that the former do not demand any assets’ ownership. The central idea of using binary options is foreseeing the future movement of a product in the market rather than making an actual investment.

From the naming of the options, it follows that they presuppose selecting from two available variants. Basically, binary options trading represents two extremities with no in-between alternatives. The procedure of the binary investing starts with foreseeing the movement of an asset in terms of pricing. After the returning sum is outlined, the investor has to define the amount of money, which is risked, as well as the timeline of the performed operation. All factors considered, the trading act may start.

Therefore, one of the primary advantages of binary options trading is that it offers the most complete marketing awareness, which concerns a full access to information about the outcomes of trading, as well as the timeframes and the monetary estimation of the performed act.

Leading binary trading is extremely comfortable in terms of the largeness of the traded assets and place-based benefits. Specifically, the assortment of the production embraces financial currencies, indices, marketing stocks, etc.

Moreover, the sustaining any trading operation is not aligned with a specific geographical area, according to which the products of international companies may be traded from one locality and through the assistance of one broker. The system of broking options is easy in use since it operates a single web basement for all trading opportunities, which ensures conducting multilevel marketing operations.

Easy Guidelines for Online Stock Broking

canstockphoto12803990With the advent of the internet, stock trading has become much easier than before. With only a few clicks, you can now compare the stock rates, the broker rates and everything else related to this type of trading. However, if you are a beginner, then you need to understand the concept of online stock broking before you invest anything. There are certain basic skills that you have to understand and apply so that the chances of getting lesser returns are minimum. Buying and selling stocks may seem to be an easy thing for veterans, but things can become confusing if you are not used to the terms. So, as a beginner, you need to be well accustomed to all the terms that are used in this trade. But, first you must have an online brokerage before you start investing and collect your returns. This will be an easy step because of the numerous online brokering firms that are willing to help you. They have the latest software systems that are specially designed for these purposes.

Things to consider

Once you have opened your online brokerage account, you have to see what your options to make money are. Initially, the entire process may seem to be very complex, but as soon as you get used to the software tools that regulate this market, you will start becoming a pro. Knowing the tricks of the trade is essential for online stock trading. You can visit their site to know more about the current rates. In online stock broking, you have to work with brokers. The best way to search for online brokers is to visit the websites that are involved in this kind of trade. Before working with the broker, you can compare the rates so that you can work with a reliable one at an affordable price. Brokers who allow investors to practice virtue trading are the ones to trust and rely on. This will be very helpful in your early days as you will be able to use play money or virtual money. Practicing with virtual accounts is very important before you actually start investing for real. So, before starting, you should research with your virtual account and get used to all the terms and tools that are used in stock broking.

Defining the capital

This is the first step towards online stock marketing. Deciding how much money you want to start with is very important. There are people who want to go all guns blazing and spend everything they have. On the other hand, there are people who start small and end big. This helps them to get an idea about the market. If you are new to the trade, it will be better to go for the latter option. You should have some knowledge on the industry you choose. Once you spend a small amount of money and see the rate of return, you can start spending some more money. This is the ideal way to start for anyone so that you do not lose everything on one shot. Centralizing your finance and meeting the transactions one by one is the way to go for online stock broking.

Choosing online brokers carefully

This is another trick that you need to master before spending big. Take as much time as you want to decide which online broker you will work with. If you ask around, people will tell you not to be influenced by the attractive online advertisements. Ideally, you should be working with someone who will be able to simplify the online stock trading concept to you. As a beginner you would be highly excited when you get incentives and attractive packages. A brokerage that provides such offers should be chosen over the ones who offer fake deals.

Terms and conditions

Probably the easiest thing to do, it is absolutely compulsory to read all the terms and conditions carefully. Once you are sure about the brokerage agency, you can visit their site and go through all the terms and conditions before signing up. If you are not able to understand anything, you can ask the broker to explain in detail so that you do not have any confusion later.

Binary Options for Dummies

canstockphoto19654068This article isn’t going to teach you how to become an expert trader, but it will inform you about the basics of binary options trading and how to get started as a binary options trader. We will look at the important aspects that you need to know as well as a few very basic trading strategies, the navigation of a trading platform and we will also give an example of a straightforward trade. Let’s get started.

What is a Binary Option?

The prefix ‘bi’ means two as in bicentenary and the word ‘binary’ is a computer term for a numeric system that only uses two numbers, 0 and 1. By adding the word ‘options’, we come up with ‘binary options’ which in effect means two choices, of which only one will prevail. Binary options trading involves forecasting the direction in which the price of selected market tradable assets will move, either higher or lower, in a specified period of time. The binary options contract between you and your broker is a very simple contract in which the potential profit as well as the potential risk are fixed at the time the contract is entered into or in binary options language, when the trade is struck or opened. Here again there are two possibilities, if your forecast is correct, you receive the predetermined payout and if it is incorrect, you forfeit your investment amount only.

The three elements that comprise a trade in binary options are the expiry time, the strike price and the return offered by the broker. A very basic example of the structure of a binary options trade would be if the oil price is at $55.04, the strike price, per barrel and you forecast that the price will be higher in exactly 5 minutes, the expiry time. Your binary options broker, such as Banc De Binary, has offered a return of 80% on a correct forecast and you invest £10. Five minutes later, at the expiry time of the trade, if the price of oil does increase to $55.05 per barrel, you will have made a winning trade. You then receive a payout of your original investment (£10) plus 80%, a total of £18. Had the oil price have dropped below $55.04, you would have lost your investment. Simple!

Binary Options Variations

While binary options trading always comes down to only two choices, there are a number of variations that have been introduced to provide traders with alternatives. Before looking at the different variations, you need to know the meaning of certain terms and at this point the important one is underlying asset. Every binary options trade involves the price movement of a market tradable asset, known as the underlying asset. This could be a stock, an index, a currency pair or a commodity and many brokers, such as Band De Binary, offer a wide choice of global assets to trade.

Binary Options – Trade Options

The most common and widely used trade option is the Call or Put binary option where a Call option is the name given to a forecast that the price of the underlying asset will go up, while a Put option indicates a forecast that the price will decline by the expiry time.

The Touch or No Touch variation has become increasingly popular among traders and requires more knowledge of the underlying asset than a standard Call or Put binary options trade. With this variation, you have to forecast if the asset price you are trading will touch a price target either higher or lower than the strike price during the life of the trade. The price only has to touch the forecast price before the expiry time in order for the trade to end ‘in the money’. Should the price exceed or drop below the strike price before the exit time having touched the forecast price, this has no effect as the trade is closed as soon as the target price is touched. The opposite is the situation with a No Touch trade where your forecast would be that the price won’t reach a certain price level. In this case, the instant the price touches the selected level, your trade closes as a losing trade or ‘out of the money’.

There are other more complicated and sophisticated trade variations that you will understand once you start gaining experience as a binary options trader. Most brokers offer a wide range of trading options so take the time to review these options before you sign up.

How to Trade

All binary options trades are done using the binary options broker trading platform. There are different brands of trading platforms, but navigating them and placing your trades is very similar on all platforms. We will go through a straightforward Call or Put trade on the trading platform such as that used by binary options broker Banc De Binary, an example of which is directly below.

Above the price chart graphic, as you can see, the underlying asset is gold and for a return of 72% on your investment, you have to forecast whether the gold price, which is at $1165.56 is going to go up, or down by 10:10, the expiry time. You enter the amount you wish to invest and then click on your selection, up (Call) or down (Put). You will also notice that the rate of return is clearly marked on the trade and for this trade it is 72%.

In the above, you can see that there is a graphic representation of the price movement of the asset. This can be adjusted to reflect different time frames and it can help the trader to determine the direction the price might take in the future. By using the historical trading patterns of underlying assets traders are able to extend the pattern into the future and thus predict the direction the price might move in going forward. The use of graphs and algorithms in calculating your forecasts is known as technical analysis which you will learn much more about as you progress as a binary options trader.

Gaining Experience

You now have the basic essentials to start trading binary options. The next move is to open an account with a reputable broker, such as Banc De Binary, who is regulated by a governmental regulating authority such as CySEC, the Cyprus Securities and Exchange Commission, which is recognized across all the European Union member countries. Once your account has been opened, you will have access to the education portal which offers a wealth of trading tools, information such as an eBook, training videos, trading signals and much more. This will enable you to start advancing into the more intricate niceties of binary options trading such as the different trading strategies and methods of analysis used to improve your forecasting skills.