Binary options for beginners is an orientation article with links to more elaborated specific articles that can direct the beginner binary options trader in the first steps to better understand what binary options are, what to expect from binary options and what are the first necessary steps.
Binary options are exotic options with only two possible predefined outcomes. The predefined outcomes specify what the gain (in case of winning) is and what the loss (in case of losing) is. The different names of binary options ( digital options or Fixed Return Options ) describe the special characteristic of the option where the possible outcomes are predefined. The winning condition states a certain percentage value that is paid to the trader if the condition was met and the losing condition states a percentage value that is paid in a case of a loss (in many cases all the money is lost and the statement is 0%). To clarify the difference, in most regular options (not binary options) the profits or the losses correspond with the change in rate of the asset and the traders cannot know the exact winning or losing values.
If you want to get more information for perspective you can read our binary options review and our binary options history article.
Binary options are based on simple conditions like will a stock go up or down and therefore simplify the trading process for new traders with little or no financial background. Although binary options are simple, we still recommend you learn about binary options trading and make responsible decisions with your investment.
After you learn and gain perspective from our binary options tutorial, binary options tips & tricks, and other articles in the Binary Options Academy, the first step is to choose a binary options broker. We recommend that you choose at least two brokers to invest with.
When your investment account is active, dedicate the time needed to get familiar with the functionality of the broker’s platform. You need to practice your trading skills and make several small trades to get used to the user interface and functionality of the broker’s platform. A common mistake of beginner binary options traders is to make many trades or very big trades just after the account is activated. This “gold rush” behaviour usually causes losses and does not assist in gaining experience.
After at least 10-20 small trades that teach you when to bid and how to get better results, you can start trading more intensively and start looking for a binary options strategy that you like. The strategy can use any combination of asset analysis tools like certain patterns and trends in the graph or news from news sites and economic calendars that result in a price movement.
It is expected that the beginning of your binary options trading will result in some losses but with practice and with the right strategy your trading statistics should improve dramatically. Depending on the specifics of the payouts you get from the broker, you will need to find a way to win about only 60% of your trades in order to be profitable. Use the bidding history page on the broker’s platform or manage your own records on your bidding history to track your trades and to review your progress.