how to trade binary options explained & simplifiedbinary options trading success by...

Binary Options Trading Success by Eezywealth.com

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How to Trade Binary Options Explained & Simplified…

http://www.eezywealth.com/onlinesharetrading


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LEGAL NOTICE

The Publisher has strived to be as accurate and complete as

possible in the creation of this report, notwithstanding the fact

that he does not warrant or represent at any time that the

contents within are accurate due to the rapidly changing nature of

the Internet.

The Publisher will not be responsible for any losses or damages of

any kind incurred by the reader whether directly or indirectly

arising from the use of the information found in this guide.

This report is not intended for use as a source of legal, business,

accounting or financial advice.

Trading in the financial markets is for people serious about

managing their own investments and proper education in the

methods and understanding of trading is the sensible way to

proceed.

All readers are advised to seek services of competent

professionals in legal, business, accounting, and finance field.

No guarantees of income are made. Reader assumes no

responsibility for use of information contained herein, and

information was correct at time of publication.

The author reserves the right to make changes without notice.

The Publisher assumes no responsibility or liability whatsoever on

the behalf of the reader of this report.


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Introduction:

Since the launch of online share trading platforms where you are able to trade live in the financial markets binary options share trading has grown enormously in popularity among new and seasoned share traders alike. In the past trading in the financial markets was solely the realm of banks, large corporations, financial institutions, and qualified

financial advisors and brokers. That’s all changed now and if you are prepared to manage your own investments you can do so enjoy excellent growth while having the knowledge and pride of trading in the financial markets. It is sensible to beware of the pitfalls and avoid joining offers where inflated figures of fast track wealth are promised because more often than not these are false and in addition you could end

up losing your entire investments. Trading in the financial markets is serious business, but it’s equally exciting and satisfying watching your money and even skimming off the profits to improve your lifestyle. The smart way forward is joining registered, licensed regulated share trading brokerage platforms and within this book you will find direct links to well-known clients that are widely respected in binary options share trading fields.

In conclusion: Spreading your portfolio is a sensible decision meaning that you can set long and short term trades, Forex and commodities trades or whatever you prefer so that each complement the other. Education for smart trading is a must and this guide gives you some insight on how to get started!


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1) What Are Binary Options?

Binary options are estimates of underlying assets performance

during a given time frame.

To understand the simplicity and wonder of binary

options trading, let’s first take a look at how investment in other

trading markets usually works.

In most forms of investment the investors actually purchases the

asset they invest in, and the value of the profit and loss is

determined upon the changing value of the asset.

If the investor sells the asset back to the market whenever its

value increases, then they're making a profit, and if they sell the

asset back to the market when its value decreases, then their

money is lost.

This type of investment requires the investor to constantly worry

about when to sell the asset, and get out of the market to avoid

exposing his entire account to the market’s volatility. Conversely,

Binary options simplifies this entirely making trading fast and

with smarter decisions.

In options we trade futures on the market and not in the market

like other trading methods, and thus the amount of psychological

stress isn’t expressed, as you are just predicting the asset's

movement for a predetermine time frame.

http://www.eezywealth.com/tradingsuccess


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2) The Definition of Binary Options Trading

The word binary stands for “having two parts”. Generally

speaking, all you need to do is predict either “Call” or “Put“.

Binary options trading have only two investment possibilities for

you to predict and then choose between.

a) One investment possibility is expressed when you predict

that the price of the asset will rise, this type of investment is

named “Call” option.

b) The other possibility is presented when you predict that the

price of the asset will fall, this type of investment is

named “Put” option.

Choosing an asset is the first step of your investment.

For instance, if you have an interest in gold prices, you may

choose to place a binary investment in gold.

Obviously, the more familiar you're with the gold market the

better your chances are of successfully predicting the fluctuations

of gold prices.

The most popular binary options trades are done in the largest

sector of the financial markets which is the Forex markets. This is

where country currencies are compared with each other or traded

against each other for want of easier explanations.

Forex stands for ‘Foreign Exchange’ also called FX by professional

traders. Huge fortunes can be made with clever binary options

trading if you have done your homework carefully.

On the other hand you can also lose a lot of money by being

careless and greedy instead of keeping a cool head and being

watchful which is the wiser choice.


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3) What Assets Can Be Traded as Binary Options?

Most registered online share trading platforms offer a huge

selection on choices to trade with using binary options.

Opteck which is the trading Account I use, has a wide variety of

binary contracts available to traders.

You can either trade with:

Indices - Such as NASDAQ, Dow Jones, FTSE, Nikkei and many

more.

Forex - Combinations for all the major currencies such as USD,

EUR, GBP, JPY and AUD just to name a few examples.

Commodities - Gold, Silver, Oil, Corn, Coffee, platinum and

several others.

Stocks - Over 50 of the biggest and most interesting companies

in the world from a variety of industries are available in the asset

list, amongst them - Google, Deutsche Bank, Coca Cola and many

others…

http://www.opteck.com/?olgs_aff=1204&olgs_sid=40&olgs_tr=&olgs_str=




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4) Where Can I learn How to trade?

The best online share trading platforms have everything you need

offering both novice and experienced traders a valuable resource

for learning and improving your binary options trading techniques

and strategies.

Every registered trader has high quality educational material at

his fingertips, and a smart and diligent trader will always do

better than the investor relying on gut feelings and luck.




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5) How Do I Start trading Binary Options Online?

The first step is opening up your trading account and after

registering your details a consultant will guide you through the

process explaining everything you need to know about the

process.

When opening up a trading account with the top online share

trading platform companies you can be secure in the knowledge

that you have ongoing live support, chat facilities and education

all vital to sensible trading in the financial markets.



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Understanding Binary Options Basics

Binary options are an investment tool, also known as a

“fixed return” or “digital options”.

1. This tool is used to deliver a fixed return based on a predicted

forecast. It can also enable traders to earn high returns in short

time frames.

2. It can be used to trade underlying assets and its defining

characteristic feature is ease-of-use.

3. Successful results are solely dependent on price direction and

not the size or magnitude of an assets’ movement.

Unlike traditional options, the trading of binary options involves

shorter expiry times, predetermined yields, and a binary option

cannot be sold before the selected expiry time intervenes.

The payouts in binary options offer you three possible winning

outcomes;

'In the Money', 'Out of the Money' and 'Tie'.

These terms indicate the ending of the trade in reference to the

market price past the expiration time.

Meaning, your payout is subjected to the asset final stop,

whether it ended above, below or aligned with the market price.

Most ‘In the Money' options pay out a value of 65-71% of the

initial investment:

… And those that are ‘Out of the Money’ result in a loss of

around 85% of this investment.

Simply put, a binary option is a financial instrument that provides

you with access to global assets.


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Its simplicity, minimum risk and quick earnings have fostered its

popularity and are also the building blocks upon which regulated

registered licensed online share trading platforms are instigated.

Assets are the measured value of the stock, commodity or

currency from which the option is derived. Because of the assets'

lack of ownership, when a Binary Option is purchased the cash

value reflects the live market price of the asset it is based upon.

Most common assets refer to the following four major

groups:

1. Stocks (Lloyds, Barclays PLC, Google Inc., etc.)

2. Indices (FTSE-100, IBEX- 35, S&P 500, etc.)

3. Commodities (Gold, Silver, Oil, etc.)

4. Currencies (Euro – US Dollar, British Pound – US Dollar, US

Dollar – Turkish Lira, etc.)

What are call options?

A call option grants the trader profit whenever the option's price

is higher than it was at the expiration time, i.e. the option expires

above the strike price.

If the option expires at precisely the level of the strike price, the

initial investment is reimbursed. In the stock market arena, this

action is called 'going long'.

What are put options?

Conversely to call options, ‘put options’ grant the trader profit in

the event that at the time of expiration the option's price is lower

than it was at the time of purchase, i.e. the option expires below

the strike price.

These options are similar to ‘going short’, where the optimal

outcome for the investor is for the price to fall. If the option

expires precisely at the level of the strike price, then the initial

investment is reimbursed.


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What is a strike price?

A strike price reflects the current market price for an underlying

asset when an option is executed.

What are investment amounts?

The investment amounts are the sums a trader invests in trades.

The amounts are not fixed and can vary, according to your

trading desires.

These amounts also set the level of pre-determined payout

percentages and return of investment, at the time of the options

expiration time. Meaning, you control the extent of your losses

and profits.



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Starting Out To Trading Binary Options

How do I trade?

To invest in a Binary Option in an underlying asset, you first

decide whether the option price at the moment of expiration will

rise above or fall below the current strike price.

Predicting for a price rise – makes it a 'call' option. If you predict

the asset's price to drop under the strike price- it'll make it a 'put'

option.

Then, you choose the options expiration time; it can range from

one hour to one month. Next you decide upon your investment

amount.

Your payout will be pre-determined according to your investment.

To execute the trade, you then either click on the 'put' or the

'call' button.

Following this action, an investment sheet will open up, for you to

enter the trade information and approve it. The information sheet

will remain on your screen from that moment onwards and will

constantly update according to your underlying asset price

change.

*Notice, before the trade has been approved, it can be cancelled

at any given moment by pressing the "X" button.

What are the returns on successful investments?

The return on a successful investment will make you a wealthier

trader by 65%-100%.

Each and every underlying asset has its own pre-determined

payout which is clearly indicated on the website.

The pre-determined payouts vary amongst the different

underlying assets.


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For example, if you invest $200 in a 'call' option of an asset with

an 85% pre-determined payout; you make a $170 profit on top of

the $200 investment.

What are my returns on options which expire 'Out of the

Money'?

If the Binary Option expires ‘Out of the Money' the investor will

lose initial investment. On the majority of assets a Sell option is

available. This option allows trader to sell the position before

expiration, for the current option price.

Investment Amounts

The maximum investment amount varies and is determined by a

number of factors, though traders are not restricted to buy

multiple options.

If you were denied to trade because your investment exceeded

the maximum amount on a single option, instead, spread your

investment across several options accumulatively purchased.

Thereby you reduce the risk of an "All in" loss on one option, and

still reach your desired investment sum with multiple options and

possible wins.

What are the displayed quoted prices/rates?

The underlying assets' value often changes and as a result the

change reflects on the asset's quoted price – the level.

The levels express the average price of the assets according to

global financial exchanges, based upon an algorithmic data feed

which is retrieved from various providers.

What are expiry levels?

An expiry level is the price at which the option officially expires

according to our quote provider.


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Once the option expires, its price determines whether the trader's

investment is 'Out of the Money' or 'In the Money'. Expiry levels

vary across the different underlying assets.

What are expiry times?

The expiry time reflects the precise time and date a binary option

expires. Prior to entering a trade, it is in the hands of the trader

to pre-determine the asset's expiry time.

Top Binary Options Platforms enable you to trade on a

countless selection of expiration times, ranging from 60 seconds

to 24 hours.

How does the purchasing of traditional stocks differ from

investing in binary options?

The contrast between binary options and traditional stocks is

primarily regarded to their acquisition, or better yet, lack of

acquisition.

Traditional stock options are purchased through stock exchanges,

whereas the binary option does not involve any acquisition,

merely pure trading.

In addition, binary options are more popular with investors

because they offer shorter options contracts than traditional

‘vanilla’ options. They offer increased flexibility and an utterly

convenient expiry time ranging from 60 seconds to 24 hours.

The traditional traded options are characterized as having longer

expiry dates, which price fluctuation levels at the time of sale

regulate, and the absence of a predetermined payout rate.

Their most prominent advantage hinges on their capability to be

sold at any time, whereas binary options are govern by their

predetermined time of expiry.



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Trading Breaks

From time to time there are occasional, short-term technical

difficulties which prevent investing. These problems are often

resolved quickly, and soon after the investor can once again place

investments.

Can I change the expiry times or time frames?

No, the time frames are set before you enter the trade. Many Top

Platforms have a wide variety of binary options time sets;

examples options expiration time vary between 1 minute and 1

week.

In addition you can have as many as 20 trades open

simultaneously, arming you with a lot of flexibility within the

market.

http://www.eezywealth.com/60secrets


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Smart Trading Strategies for Binary Options

Strategizing your investments is critical for your overall binary

options trading success. Just as trades vary, applying the correct

binary option strategy is also a dynamic art all traders ought to

master.

Having a better control of your binary option trades is essential to

your understanding about the financial markets behavior.

The more you apply and follow these trading strategies, the more

probability there is that your trade will end as a successful one.


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Examples of Binary Hedging/Straddle

Strategy …

Applying the hedging/straddle binary options strategy

is comprised of a simultaneous trade on one asset in opposite

directions.

This trading strategy includes risk management features which

prevent you from enduring a full loss of your traded invested

capital and the substantial chance to profit.

The strategy is based on the presumption that "what goes up,

must come down", and it works as follows:

1. Choose your general direction: decide if you wish to invest in a

“Call” or a “Put” option.

2. Choose your underlying asset and invest according to the general

direction you earlier decided upon.

3. The trading strategy's tipping point; once the price of our

underlying financial asset advances according to our predicted

assumption, you make an opposing investment.

Despite the positive direction the trade has taken, traders ought

to know that the potential threat of a sudden shift of the asset's

general direction continuously lurks their trades. The accepted

solution here would be to make an opposing investment.

If in step 1, your general direction leads you to invest in a “Call”

option, in step 3 you will invest in a “Put” option.

Consequently, you're now trading both “Call” and “Put” options,

thereby minimizing the risk of losing on both options, and

maximizing the chances of gaining from one of them.



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In other words, the hedging binary trading strategy guarantees

you'll end up “in the money”- its risk management in its finest

form.

To make things even better, if by the end of the trade the asset's

market price was between the striking price of your first and

second investments, you can actually end up benefiting from both

trades.

Example:

The table below represents the USD/JPY price for a potential

“Call” option. Let's assume the price will breach the descending

trend line.


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The price breaks the trend line and is retesting it before

continuing its movement upward. Corresponding to the hedging

strategy, at the retesting point, you invest in a “Call” option.

Once the price movement is corresponding to your prediction,

i.e., the option is “In the Money”, you wait for an opposing trend

line to break again toward a decline. As a result, you lowered

your risk and doubled your potential to profit.


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The Hedging/Straddle Strategy Scenario Explanation

Normally, if you invest $200 in the USD/JPY option, as displayed

on the chart above, and the asset's return is 85%, you either lose

your $200, or alternatively, if you implement the above

mentioned strategy, in the event that the trade ends up “In the

Money”, you gain $170-even if one the options expires “Out of

the Money”.

Applying the straddle binary strategy will spring different results

to your trade.

If all of the conditions are correct; the price movement is in your

predicted direction and you're “In the Money”, you can take this

investment to a whole new level by investing in an

opposing “Call” option.


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Generally speaking, there are 2 possible outcomes to this specific

scenario:

1. If the market's price either rises or falls over the striking price of

the “Put” or “Call” options at the end of the trade's time frame,

the trade ends “In the Money” for one option and “Out of the

Money” for the other option.

2. Hence, you made $170 and lost $200, leaving you with a loss of

$30.

In the event that the market’s price stays between the striking

price of the “Call” and “Put” options, the outcome would be a gain

of $340.

Correction Binary Strategy

During the beginning and ending of round hours, assets tend to

undergo unexpected surges (both upwards and downwards).

These surges also occur prior to, during, and after important

market announcements and are exactly what you should look for

in order to apply the Correction binary trading strategy.

The principle of this strategy is founded on the Correction rule.

The rule states that if a price of an asset surges upwards or

downwards and a gap appears between the current and previous

price of the asset, the asset will then correct itself, and return

back (close the gap) to its previous price.

Now that you know how the Correction rule affects an asset's

market price, it is possible to leverage from it.

Using the graphs' support and resistance lines, or the trend line

that appears in technical analysis in your trading account, you

can identify price gaps.



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The Correction strategy asks you to detect such gaps and then

execute a binary option trade in the opposite direction.

Conclusion:

Binary options can be seen to be an exciting way to increase your

investments being in full control of the decisions you make. As

you can see although it IS possible to become wealthy trading

there is a learning curve involved which is not negotiable.

Get Rich quick schemes, forex robot software, trading strategies

and other offers that promote big money fast cannot be relied on.

It makes sense then to begin the proper way learning how to

trade online and it’s not hard when you have all the right tools at

your disposal.

Below are some useful Links to learn more about Trading online

binary options and whatever you prefer in the financial markets.

No matter what experience you have even if it is none at all you

can learn how to trade online and join the exciting revolutions of

making money online this way!

Some Content Thanks To Opteck Trading Platform.

Links:

Trading Online Platforms

Trading Blog

60 Secrets Binary Options Trading

Trading For Beginners


http://www.eezywealth.com/onlinesharetrading

http://makethebestchoices.com/online-share-trading/

http://www.eezywealth.com/60secrets

http://www.eezywealth.com/tradingsuccess

how to trade binary options explained & simplifiedbinary options trading success by...

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