Binary Trade

Binary Trade

What Are Binary Options?

Let's start by understanding how it all works. In simple terms, binary options are a type of derivative that can be traded on any instrument or market. They are appealing because they are straightforward - you know exactly how much you could win or lose before making the trade. No complex calculations or calculators are required, which is why they are also known as "all or nothing" trades. There is a wide range of derivatives to choose from. You can trade binary options on commodity values such as aluminum and crude oil, stock prices such as Amazon and Facebook, foreign exchange rate options including all major and minor pairs, and even cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.

A Concise History:

To trade binary options full-time, it's beneficial to have a thorough understanding of their origins. Binary or 'digital' options have been around for decades, initially accessible only to large institutions and the extremely wealthy. However, in 2008, the US Securities and Exchange Commission opened up access to binary options trading through an exchange.
The internet and technological advancements have since made these 'digital' options accessible to the entire world. With low entry barriers for knowledgeable day traders and a simple proposition to understand, the demand for these digital trades is expected to continue rising.

Varieties of options:

There are several types of options to choose from, with the most popular ones outlined in the brief glossary below:
Up/Down (High/Low) – The simplest and most common binary option. You predict whether the price will be higher or lower than the current price when the expiry time arrives.
In/Out (Range or Boundary) –Two figures are set, representing high and low boundaries. You decide whether the price will finish within or outside of these boundaries.
Touch/No Touch – Levels are established above or below the current price. You speculate on whether the price will 'touch' these levels between the trade time and expiry. Payout occurs immediately upon touching.
Ladder – Similar to up/down trades, but with pre-determined levels staggered up or down instead of using the current price. These typically require a significant price movement, and returns often exceed 100%. However, both sides of a trade may not always be available.

Expiration Times:

Another crucial aspect of binary options is the expiry times. This is the point when the trade ends, determining whether you've won or lost. Expiry times can vary from 30 seconds and 1 minute (turbos) to a full day (end of day), and even up to a year.
As an intraday trader, your focus will likely be on trading 5 and 30-minute binary options. Choosing binaries with 1-minute expiry times allows you to execute a high number of trades in a single day.

Is it legal to trade binary options?

While binary options have garnered a somewhat negative reputation, they are indeed legal. The majority of companies operate ethically, although there are some that engage in scams.
Regulatory measures in certain regions have led to the removal of binaries from the retail market, such as in the EU. However, professional traders still have access to them. In places like India and Australia, binary options are legal, but traders should exercise caution by choosing a reputable broker and referring to our section below on avoiding scams.

Frauds

The reputation of binary options has suffered due to dishonest marketing practices and cybercrime. Many unregulated brokers promise quick profits while engaging in fraudulent activities. However, regulators are actively addressing these issues, which should alleviate concerns in the near future.
Binary options themselves are legitimate, but it's essential to be cautious of promises of instant wealth, cold calls from brokers, celebrity endorsements, and claims of free trading. The key is to remain vigilant of the risks and know what to watch out for. If you're uncertain about a broker, it's advisable to ask questions in a live trading room to ensure they are properly regulated.

Which binary options broker stands out as the top choice?

The best binary options broker for you will depend on your country of residence and the specific assets you wish to trade, whether it's stocks, gold, cryptocurrencies, etc. We recommend utilizing our broker services.

Further Reading

FAQ

What is a Trading Robot?
A Forex Trading Robot (Expert Advisor) is a software or algorithmic script that can be integrated into a forex trading platform. Its purpose is to automate trading processes, executing buy and sell transactions without the need for manual instructions from the user. Trading Robots, also known as EA Forex, play a significant role in Auto Trading, offering various functions.
What Can Forex Trading Robot (EA) Do?
The capabilities of a Forex Trading Robot vary based on the settings utilized by traders. Typically, an EA can perform the following tasks: 1. Open or close positions (buy/sell). 2. Adjust stop-loss and take-profit levels of active trading positions. 3. Analyze currency pairs using predefined technical indicator parameters. 4. Send alerts via voice, email, or API integration. 5. Monitor account financial management aspects such as balance and margin. Forex Trading Robots have the potential for limitless development through integration with other applications. However, they strictly adhere to the programmed instructions and do not deviate from predetermined trading systems. Creating a Forex Trading Robot (EA): Each forex trading platform utilizes its own programming language for EA development. The most common programming languages include: - MQL4 for the MT4 platform. - MQL5 for the MT5 platform. - C# for the cTrader platform. These languages feature programming structures similar to general-purpose languages like Pascal and C, making them accessible to those with programming experience.
Are Binary Options Legal?
Yes, binary options are legal, although regulatory status varies by region. In countries like India and Australia, binary options are permitted. In the US, binary options trading is available through platforms like Nadex and is entirely legal. However, in the EU, binaries have been withdrawn for retail investors, although professional traders can still engage in binary options trading provided they meet specific criteria.

Can binary options be traded on MT4 or MT5 platforms?

Currently, there are no binary options brokers that provide integration with Metatrader. However, it is feasible to conduct technical analysis using MT4 and execute trades on a different trading platform.