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Thread: How to trade binary options

  1. #1
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    How to trade binary options

    Roboforex company had launched binary options – new innovative financial product, it is now available in new Robooption platform. So, let’s go through concept of binary options, it may seem confusing for some traders unfamiliar with it, but in reality this type of trading is easier than trading with conventional currency pairs.

    What is binary option?

    Binary option - agreement between buyer and seller, it can bring fixed amount of profit to buyer of the option in case some conditions are realized at expiration time.

    Everything is quite simple: you define specific time period (from 1 minute to several days, weeks or months), and have to choose if price will be located above or below certain price (strike price). At the moment you execute a trade, you pay a premium for the option (fixed amount of money), in case your forecast is valid you receive payout (it usually covers premium and gives you around 70% profit per risk), in case it’s not – you get nothing, but your losses are limited by the size of the premium paid.

    You can watch educational videos here to deepen your understanding of binary options traded in Robooption platform.

    First of all, to successfully trade binary options, you have to analyze underlying currency pairs. Binary options are not isolated – they fully depend on behavior of price of underlying asset.

    But, there are significant differencies between conventional forex trading and trading binary options. Binary options have limited risk, amount of risk is defined before the trade, also you have predefined size of the profit, even if price is located just 1 pip above or below the strike price.

    Binary options trading does not require sophisticated trading strategies – they are simple, easy to execute, trading platform is intuitively understandable and doesn’t have to be installed on your computer.

    We have to mention that binary options and traditional options are different financial instruments. Traditional options are much more complicated. We will cover differencies between them in separate thread for the sake of your education.


    How to trade binary options on RoboOption


    When you execute a trade – say, intend to buy an option, you give away premium (bet). If conditions of this trade are realized at the time of expiration, you receive your premium back as well as payout (up to 85% depending on instrument traded and other parameters). If conditions of the trade are not realized, you are not receiving premium back (as well as payout), but your losses will never exceed your bet.

    To start trading binary options, you have to do several simple steps:

    1. Register on a website RoboOption, we can open demo account to practice.

    2. Deposit cash to your trading account choosing payment system of your favor , or setting amount of money for demo account;

    3. Prepare for trading:

    - Login to account;

    - Choose trading instrument;

    - Choose amount of premium;

    - Press «Call» or «Put».

    Interface of Robooption trading terminal looks like shown below:

    Attachment 11606

    - at the upper side of the platfrom we choose type of options: Binary options, Long terms, Sixty seconds;
    - in the "Asset" field you can choose underlying asset for the options;
    - in the field "Expiry" you can choose expiration date and time;
    - in the field "Amount" you can choose amount of bet (premium) for your trade;
    - also you can view a chart of underlying asset and "Call"/"Put" buttons;
    - in the column below "Amount" you can view potential payout and premum;

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    Last edited by Value trader; 09-03-2014 at 02:21 PM.

  2. #11
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    Quote Originally Posted by Value trader View Post
    First of all - binary option is just a trading instrument, understanding behavior of price of underlying asset is mandatory. It's impossible to trade options if you don't know how price of particular currency pair is going to move. But in options trading, your risk is predefined that's why sometimes it's easier to trade because you can be careless about "stop running" for example.
    Of course, there are also some disadvantages - for example, it's impossible to let profit run with binary options.
    That's why I don't recommend it to newbies. Newbies must learn first how to crawl before they can walk and walk before they can run. They can learn in trading regular pairs in demo account and then in real account. If they now understand how the price moves then they can trade in option. Its will be overwhelming if they going to trade option right away.

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  3. #12
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    strong determination is very for stay with forex.forex is a easy business.Some even say demo account is pure waste of time but I wan't to give my own opinion why demo account is so important.so you want to be successful in any side of you life.

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  4. #13
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    It is well said about the binary option. Everything about the binary option is fixed. And it seems it will give more money to the trader at the time frame known by the trader than just trading forex trading without time limits. This is a great point to understand by traders. Also, I think that deposit options should be more than the ones that are still available by now.

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  5. #14
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    Quote Originally Posted by karim View Post
    strong determination is very for stay with forex.forex is a easy business.Some even say demo account is pure waste of time but I wan't to give my own opinion why demo account is so important.so you want to be successful in any side of you life.
    But in this thread we are not just dealing with forex. We are dealing with binary. Its more or prediction game. You need to know if the price will go up or go down before the time expires. If you guess it right you earn money. If you don't guess it right you loss money. Simple as that. I do recommend that you study first fundamental and technical analysis to know or at least understand how the trends moves before you try to trade binary.

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  6. #15
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    I say only one thing regarding binary options: you can study what ever you want but basicaly is only question of luck like black or red on roulette, think about the security that everybody could win what would happen then ?.....simple would not exist this and other options, in every activity there is always about 20% of wins and 80% of losses, that's why all over the world there is much poverty.

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  7. #16
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    Quote Originally Posted by travvin View Post
    I say only one thing regarding binary options: you can study what ever you want but basicaly is only question of luck like black or red on roulette, think about the security that everybody could win what would happen then ?.....simple would not exist this and other options, in every activity there is always about 20% of wins and 80% of losses, that's why all over the world there is much poverty.
    Actually, it's not a roulette or any type of casino because binary option brokers have liquidity providers - in other words, brokers can hedge their position via 3rd party liquidity providers (yes, even with binary options there are larger liquidity providers, they are large interbank dealers). I will tell you more - brokers have more opportunities in executing options trades - as their turnover is pretty large, they have access to complicated over-the-counter "barrier" options and other strategies that allow them to properly hedge their overall position.

    So, it's not a casino, it's a rapidly growing business like was retail forex trading many years ago.

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  8. #17
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    Thanks for this post about roboforex binary options. Here you give some good informations for good trading to all new person. You write here how to trade binary options, what is binary options? you gave starting step here and educational tutorial so I liked this. I think the new person who read this your post, he get some good information and he will impressed trade in binary option. Because I am impressed.

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  9. #18
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    Quote Originally Posted by travvin View Post
    I say only one thing regarding binary options: you can study what ever you want but basicaly is only question of luck like black or red on roulette, think about the security that everybody could win what would happen then ?.....simple would not exist this and other options, in every activity there is always about 20% of wins and 80% of losses, that's why all over the world there is much poverty.
    Luck if you don't know how to trade. Simple as that. How can that be luck if you have certainty that you can earn money? Even in doing binary you can make good profit if you are good in doing analysis. If you know the trend the pair that you are trading. And you know the volatility of the pair that you are trading then you can trade accordingly and make profit out of it.

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  10. #19
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    you have to estimate time required for your trade, choose destination by clicking corresponding button and expect outcome.

    But remember that you goal as a trader is to have more profitable trades than losers. As you don’t have asymmetric opportunities (you can’t expect to have profit 3 times greater than a loss), you have to be right more often that wrong

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  11. #20
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    I visited robooption website afore I opened a absolute account. I approved to get some abstraction and affection of this advantage trading. E book and videos absolutely advice me to accept abounding affair about bifold advantage trading. I begin about absorbing if trading in audience account. Then I opened a absolute annual and traded. Luckily I won added than I absent which accompany me about 17$ accumulation in my 50$ advance in a day. I am absolutely blessed and acceptable to apprentice how to barter bifold options.

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