Binary options tutorial deals with the necessary steps you need to perform in order to place a bid and trade binary options. If you are interested in gaining more perspective on the process before you start to trade, you can use our “Binary options for beginners” guide. If you are interested in the advanced article about what makes binary options trading unique and what aspects in technical analysis you should consider for each binary options trading method, please go to how to trade binary options.
Make sure you have an active account with a binary options broker (if you don’t have one, please read “How to choose a binary options broker”) to fully utilize our binary options tutorial.
The binary options tutorial steps:
1. Choose the asset – the asset is the resource we trade on and the common binary options assets are different stocks, forex pairs, commodities, and indexes. The choice of a binary options asset should take into consideration the market’s situation and our personal preferences. We need to read and research what are the assets that have a pattern behaviour so we can use the pattern to predict the behaviour of the assets. Choosing an asset that we personally know more about or feel more confident about can also improve our trading experience. Usually, we see more binary options trades on the forex pairs and on dominant stocks like Google, Microsoft, Apple, Facebook etc.
2. Choose the binary options trading method – there are different methods to trade binary options including call/put binary options, range binary options, and one touch binary options. Each method is different and we need to learn about it in order to better understand it before we choose to trade with it. In short, the call/put option requires us to decide if an asset goes up or down, the range option requires us to decide if an asset is in or out of a declared price range, and the one touch option requires us to decide if an asset rate will “touch” a certain declared rate. Usually people find the call/put option to be the easiest one to trade with and the one touch option generates the highest yields. The call/put option is best suited to assets with a clear trend, the range option are most suited for assets with clear pattern behaviour, and the one touch option is best suited for assets with high volatility.
3. Analyze the asset – you already chose the asset or assets you want to trade on and read about them but now is the time to read more and watch the relevant charts for an in-depth understanding of the asset. Look for the latest news about the asset, try to locate the patterns in the chart, look at the charts and see the asset’s behaviour in different scales (minutes, hours, days), and make sure you feel confident enough with the asset you chose.
4. Choose the action – in accordance to the trading method you chose, you need to decide will the asset go up or down, will the option end in or outside the range, and will the asset rate touch the one touch value. If you performed all the previous steps, this decision should be an easy decision and therefore there is no need to elaborate.
5. Place a bid – if you are not logged in to your broker’s website, it is time t login to your account. Go to the trading section, choose the asset and the method (the order of these actions may vary from one broker to another), decide how much money you want to trade with and fill the value in the dedicated place. Make sure you look carefully at all the specific details of the trade (that you are on the right asset and trading method, the rate of the asset, the closing time etc) before you hit the place bid button. Once you performed the check, you are ready to hit the button and place the bid.
6. Follow the graph – you are not done with the trade once you placed the bid. You need to follow the graph and see the progress in the asset’s rates. If it goes as you expected you can keep watching and cross your fingers until the option expires. Feel the blood pumping in your body and the thrill of trading and the anticipation. If the asset behaves different from what you predicted, you need to consider placing another bid to correct the first bid and reduce losses or even generate profits.
7. Record the trade – write down the time, the rate you entered with, the decision you made, the rate when the option expired, and of course the outcome of winning x or losing y. These recordings assist you to track your performance and to also try and learn from the winnings and from the mistakes to improve your trading statistics.
We are sure that by following the instructions in our binary options tutorial with persistent behaviour you can generate profits that will fully satisfy realistic expectations from binary options trading.