Is it Possible to Make Money in Binary Options Trading?
A lot of interested traders are asking themselves the question if you can really make money with binary options? Obviously this is a perfectly legitimate question considering that most people have not traded binary options in the past and generally believe that investing is a very difficult activity.
The answer is that you can indeed make money in binary options trading. However, you will have to put an effort into it. As explained above, you will have to learn money management, reading of charts as well as the usage of indicators.
Related: Money management in binary options
Related: Beginner binary options strategy
Naturally, you will have to put an effort into it if you want to make sure you’ll be able to generate money consistently. If you treat it like gambling then obviously the end result will also be like gambling and you will end up losing money instead of winning.
However, if you follow simple online trading strategy, like the ones that I have listed above, then you will have the potential chance to generate profits consistently. Also, the more you trade, the easier it gets later on. After a few months, trading financial assets will come natural to you, allowing you to make money consistently.
How does it work?
In binary options you will have the possibility to predict the movement of various assets such as stocks, currency pairs, commodities and indices. Making a prediction is possible after purchasing an option.
An option has only two outcomes (hence the name “binary” options). This is because the value of an asset can only go up or down during a given time frame. Your task will be to predict if the value of an asset with either go up or down during a certain amount of time.
In order to purchase an option, you will have to invest a certain amount of money. Usually, you can invest as low as $5-$10 and a high as several hundred. If by the time of the option’s expiration your prediction will have come true, you will receive your investment back plus a commission that will be the profits you made.
If your prediction will be false, then you will lose the invested money. Binary options trading is not gambling because if you pay attention to what’s happening in the business world you may be able to make accurate predictions. In gambling however, you will not be able to predict on what color the roulette ball will land, no matter what.
The simplest way to make money in binary options is by trading on news events. Below you will find an example of such cases:
Usually around September and October each year Apple is known to release a new iPhone and several additional products. Your task will be to check out when this will happen (usually, these events are announced months ahead).
Add the date to your calendar and around 1-2 days before the event buy a binary option that predicts that the stock value of Apple will go up during the next 2-3 days. You can be fairly sure that your prediction will be correct, as Apple’s stocks usually increase after a new product launch. And boom, this is it; you just made money with binary trading.
As you know, there are hundreds of large companies, such as Google, Samsung, Sony, and Microsoft, etc. Just check out when these companies are about to launch a new product and mark it in your calendar. You will usually find 1-2 such major events during every week of the year.
With this strategy you may expect to win around 70% to 80% of the time but it requires a lot of preparations like following news events. It’s can potentially be easy money through, so it should be the first strategy you use to make money in binary options trading.
One of the best brokers on the internet right now that have many long-term trades is 24Option. As explained above, 24Option is also the first broker that has received a real government financial trading license, meaning it’s fully legal and regulated.
Hint: You do not have to do all this by yourself. You can use a signal service such as OptionRobot that will automatically look for long-term trades and make accurate (up to 80%) predictions for you.
After you become a little more experienced you can move on to short-term trading. As you have noticed, trading on news events involves long-term trades such as several days or weeks. A more advanced way is using short-term trades that expire within just a few minutes or seconds.
Here, you will not be able to use news events, as things happen too fast for news to have any influence on asset prices. Instead, you are expected to read the charts of various assets and look for trends.
Trends are predefined patterns in the short-term movement of assets. This means that if you catch a pattern in its early development, you can predict what happens next (as patterns usually behave in the same fashion).
More on patterns: Candlestick binary options strategy
More on patterns: Bollinger band binary trading strategy
These are a bit more complicated strategies but they are great because they allow you to make money in binary options on a daily basis as they involve short-term trades, therefore don’t have to wait for major news events (like product releases).
The best is always to use a combination of both strategies if you want to make money consistently using binary options. If you are a beginner, you should first start with the long-term strategy I described above (the one with Apple as example) because it’s very easy and there you will have realistic winning chances even as a complete newcomer. Then later diversify to short-term.
For short term trades I usually recommend 24Option. This is because short-term trades are usually riskier and 24Option offers a minimum deposit of only $10 and allows you to invest as low as $1 per trade.
Tip: Short term trades are a bit harder to predict than long-term trades, but they can make you money much faster. It’s recommended to use a robot (a tool that will automatically execute accurate trades for you), such as OptionRobot. This way you will be able to make money right away with minimal work on your part.
(Additional Info: List of all charts and indicators by Stockcharts.com)
Is it legitimate? Is it legal?
Reputable financial service providers and investment firms first introduced binary trading in the United States. After this, multiple countries decided to adopt this practice and make it a legal form of financial trading and investing.
At this moment binary trading is officially regulated in a large number of countries on the planet including the United States, the United Kingdom, Cyprus, Japan, South Africa and more.
In order for financial service providers to be able to offer binary trading services, they will have to pass an independent evaluation by various government agencies. Only those online trading companies that offer legitimate services will be awarded with a financial service provider license.
Also, trading financial assets online by private people is at this moment legal in all countries on the planet. This is also valid in countries where binary options is at this moment not yet regulated. – To our knowledge binary trading isn’t illegal in any countries at this moment.
Do I Have to be an Expert to Make Money in Binary Options?
A common misconception is that you will have to be a financial and business expert in order to successfully trade binary options. However, this is not true at all. Perhaps it’s true when it comes to traditional stocks trading but definitely not true in the case of binaries.
You don’t have to be an expert to predict the movement of certain assets. Just think of the example I gave you above with Apple and long-term trades about on how to make money in binary options. Just based on that example you already learned one of the simplest ways to successfully trade binaries. There were no complicated tools or economic theories involved.
To add on the strategy mentioned above, another example is knowing when the US Federal Reserve is printing money.
You can find this info in the news. In such cases, the value of the USD almost always depreciates. So, in cases like this you can place very accurate investments on the outcome that the conversion rate between the USD and other currencies will increase.
And now you already know two very easy methods that you can use every single time you trade. So, as you can see, you can definitely make money by trading binary options if you do it properly and don’t just make random predictions.
You can implement these strategies at binary options brokers. The idea is to always choose legit and reputable brokers such as 24Option to avoid being scammed. USA traders can choose BinaryMate.You can also use various tools such as signals to help predict the movement of assets. The best tool of this kind at this moment is Signals365.
Learn more and become a winner
If you want to make money with binary options then read our detailed educational articles and strategy guides. These will teach you to efficiently trade financial assets and increase your winning probabilities.