How to trade binary option

                  BINARY OPTIONS TRADE
                     What is binary options?

Hearing the word "binary", what comes to your mind? sure its ZEROS and ONES , it call also be called digital options  and "option" is a selective decision to be made between two or more given object. Yes that is absolutely right, a decision that either YES or NO.

Trading have been simplified to a level where you only have two option to make one decision. Welcome to binary option trade a simplified form of trade that allows you to make money by just a simply choice. Since 2009 binary option trade have been making waves to all part of the word, and today i can say that in every 100 person in a country 2persons are binary options traders.

In binary option trade asset like a stock, commodity, index and currency are what we trade on, an investor doesn't purchase the asset - he is merely predicting the direction that the price of the underlying asset moves.

Just as we have cleared that binary option dillies with predicting the direction of the movement of an asset, How then can we know what direction binary option trade is going?

 

From here we can see that binary option trade is going towards only two direction which is up and down,

So to trade in binary option you have to decide if you asset (stock, commodity, index or currency) is going to go up or its going to go down.

Now that you have know what binary trade is all about its time to go straight to how it work and how you can make money with it.

It will be very bed if anyone tells you about binary option and omit one very important thing......RISK WARNING

RISK WARNING

Trading binary option caries a very high level of risk and can result to the lost of your investment, As such binary option may not be appropriate for you, you should not invest money you cannot afford to lose. before you decide to trade you should carefully consider your investment objectives,level of experience and risk appetite.

WHAT TO TRADE 

Like i earlier mentioned in binary trade we trade asset, asset like stock, commodity, index or currency. we don't purchase these item we only predict the direction they are likely to go, either up or down. lets list a couple of these asset to trade.

Currencies

EUR/GBP             EUR/JPY                 EUR/CAD                 EUR/CHF

GBP/JPY              GBP/CAD               GBP/CHF                  CAD/JPY

CHF/JPY             USD/CAD               CAD/CHF     

    This is also known as the currencies exchange rate for various countries.

Commodities:

 Gold, Silver, Wheat, Coffee, Oil, Sugar, Platinum

Stocks:

 City (US), Apple (US), Gazprom (Russia), BP (British Petroleum), Google (US), SberBank (Russia), Coca Cola(US).

Indices (Indexes):

 DOW (US), S&P 500 (US), NASDAQ (US), DAX (Germany), CAC (France), FTSE 100 (U.K).

Where do we trade

The company  that offers the platform for binary trade is what we call brokers their are many brokers and some of these brokers are scam. look here for Top 10 binary options brokers.

As we all know before you can begin a trade you must first deposit, most brokers have their initial deposit amount to $250 while some initial deposit is $200.

ITS TIME TO CREATE AND FUND

Now that we have known all we have to know its time to create and fund our account, use any of the i earlier mention or you can pick from either of these Regulated binary options brokers.

Creating and funding of your account will not take more than 15minutes.

LETS TRADE

In  your trading platform there are various of ways to trade, 

1. Binary Option

2. Long Term  

3. Sixty Seconds   

4. One Touch

Binary option

As it is, it is a 15minute trade were your decision on a particular trade will made known either won or lost, most platform better still brokers rage the timing from 15-60minutes which is enough time for your trade to be a win if it is well calculated.

This have been the safest way to make money from binary trade ever since it came into existence. here is a pictorial view of binary option.

Long term 

It is a trade that takes over a day or so for your decision on a particular trade to be approved a won or lost. long term is the oldest style of trading and only a few trades use this method, as most people need to make their profit with the speed of light.

Sixty seconds 

This is the recently most trusted and fastest way of trading binary option (the sixty seconds) most people love to make profit very fast, 70% of traders who trade binary trade allover the globe uses this timing to bring in money.

One touch

With the Touch type options expire in-the-money if the price of the asset touches a predetermined barrier by the time of expiration. Price barriers can be higher or lower than the current price of the asset when the option is purchased. Binary brokers also offer variations on Touch, including “Touch Up” and “Touch Down”.

One torch offer the highest out-put rate of 200%-500%  in any trade that tends to be a success

Advantages and disadvantages to consider when trading Binary Options

Advantages

Risk control - With binary options the return on initial investment is fixed From the beginning, thus the amount of possible profit or loss is well known. Which means that you'll never lose more than what you expected and can determine your risk as completely as is possible. There's a limit on how much could be earned or lost in one trade. Because the rate of return is relatively high, and trade times are short, in the long run the fixed rate of a binary option can be a big advantage.

Low investment amounts – Binary brokers have low investment minimums, thus allowing you to start with small amounts. With most brokers you can start trading with as low as $20. If you are familiar with stock market trading, you probably know that you need a decent amount of preliminary investment capital, brokers, commissions, etc. Thus the possibility to begin trading with just $20 as well as the flexibility to pick your investment amount is certainly an advantages.

Short-time trading (daily, hourly) – With binary options you decide what the expiry time of the option will be. If you are a fan of long-time investments, you can choose “end of the week” and “end of the month” expiry times. However, most traders would prefer shorter time frames.

Online trading – Binary options are traded on online platforms and therefore you don't need any software downloads. Trading is available from anywhere, all you need is a computer and internet access. You simply enter your login and password and get straight to your personal profile page and start trading.

Simplicity - Trading Binary options is very simple and straightforward, all you need to do is decide which of the two directions the asset will move, up or down.

Disadvantages

The main disadvantage of trading binary options is the level of "fee" that is paid to the broker, it is relatively higher than in other investment areas. Fee? What fee? well, it's not exactly a fee, it's more of a 'spread'. The brokers' "fee" is embedded in the business model of a binary options brokerage. 

You buy the options contracts from the broker, if you win, the broker will pay you out about 71% to 85%. If the contract expires “out of the money”, some brokers will refund a small percentage of the principal. The broker gets the difference between the sum that they keep on a losing trade and the amount they pay out on a winning trade.

Binary Trading Risk Management
Your first concern when trading binary options should not risk too much money on any given trade. Unfortunately, many traders start trading binaries without thinking about the risk that they are taking - only about the potential rewards.
If you want to succeed in binary trading you must take into consideration the maximum percentage of the total trading money that you should risk in any one trade. Actually, your ability to limit your losses is equally as critical (or even more critical) as your success in managing winning trades.
The goal of practicing a good binary options money management is to minimize risk and increase payouts. 

For starters here are 3 quick tips:

First, Trading binary options is fun and exciting and money can be made; but you must also keep in mind that like with any other options trading there is the risk of losing. Hence, binary options trading rule number one: do not trade with money you can't afford to lose.
Second, Never borrow money while trading, trade only with your own money.
And third, set and stick to a budget. Write it on your forehead if you have to, but no matter what, when you hit that number, quit trading for the day.
Good money management calls for adopting a conservative investment strategy that means that you should never risk your entire capital.

When you enter a trade (no matter how great it may be), always ensure to only invest conservatively. By conservative I mean that you should not use more than 5% of your capital on any single trade. Binary options trading like any other stock investing is not a sure thing, there is always a risk factor involved. A conservative investment strategy helps you to conserve your money when things go wrong.

Binary options trading offers a lot of choices to the trader. A good money management strategy requires diversification. The volatility that accompanies trading currency pairs is much distinct from say trading commodities as well as stocks. Obviously, the payouts may vary depending on the asset which is selected. As the saying goes, never put all your eggs in the same basket.
Losses in a trade should be accepted on a positive note. The effects of a trade that goes against you are able to impact the future or successive trade decisions. Expecting losses whilst investing, whether it is Forex trading or binary options can assist traders in
identifying the areas which may happen to be unnoticed. Losses needs to be seen as a stepping stone instead of having it affect you.

Start off slow and scale up - this has a significant role particularly for beginner traders. Certainly do not fall for the emotions and commit your entire amounts right away on one trade. Investing in small amounts continually helps you to take a self-disciplined approach. The majority of binary options brokers allow for a minimum trade sum between $10 and $30. Use this advantage and be sure to trade with patience.
Do not expect to make gains with binary options trading as soon as you made your first deposit. No matter if you commit $100 or $3000 the exact same key facts apply. Trade in small amounts until you have the sense of the assets that you're trading. This can gradually build your self-confidence levels and helps to automatically be aware of the indicators and be able to prepare your investing strategy and ultimately help reduce the losses. One of the important things that specifies successful traders has to do with using a good money management strategy.

The above strategy has now became something of an accepted mainstream investment theory and is an ideal method on which to found your own binary options money management strategy.
As we mentioned before the money management strategy that we recommend is using no more than 5% of your entire budget in any one trade. The idea behind this approach is to achieve optimum growth while minimizing the risk. Simply put, the biggest downfall to producing good results in binary options derives from the risks involving losing. Therefore if you are able to reduce these risks, you'll have a far better chance of making money with your account to come.
Now how would this work in the real world? Let us have a look at an example: beginning capital $1000, Thus 5% will amount to $50 per binary contract placed in your account. With a typical binary options broker this could equal 5% risked for a possible 3.5% return, supposing a 70% pay out. While this might appear low to some binary investors, keep in mind that this method concentrates on risk reduction and capital generation as a way to maximize long-term growth potential.
By adopting this approach you can take a 'hit' on your account and still endure a chain of losses. Actually you can tolerate a run of 20 losing trades prior to your balance hit zero.
There is a fine line between gambling and trading. To 'gamble' is to take a high risk with limited chance of achieving your expected pay out. To 'trade' is to take a calculated risk which will nevertheless provide you with a good return as well as keep you in the game for the long run.
Not only will pursuing this kind of strategy truly enable you to improve your outcomes, it will as well help your mental well being. When starting any type of trading you shouldn't be in a position in which you are sweating on a contract winning.
Aiming and sticking with a strategy which offers successful money management does not just make sure you are not kept up at nighttime; 

It will as well make sure that a loss will not signal the end of your investing career.6. What You Need to Succeed in Binary Options
Binaries are simple to trade but don’t make the mistake of thinking that they are easy to make money with. There are many websites that tell you differently. They make you think that you just have to sign up for an account, start trading and ...voila, become a successful trader. Well, life is not that easy.
 

Like in many other areas, you need a solid knowledge before you get started. Hopefully you'll get some of it here in this guide. Be aware, though, that just reading this guide will not automatically make you an instant millionaire. You’ll learn a lot of facts and strategies about binary trading, but in order to make the most out of this guide and become the trader you want to be, you’ll have to adapt the ideas that you’re about to learn to what you already know.
For starters you need to learn how to read the charts. Charts are your main weapon in winning the Binary Options wars - ...well, maybe I'm a bit melodramatic here. But seriously, charts are a vital resource for a serious binary trader, actually any valid strategy involves reading and analyzing charts.

Basically, the charts allow you to predict the future course of an asset by finding patterns in its past price movements, and after all this what we need to win a binary trade.
Don't be intimidated by the charts, actually they are not that hard to read and understand. Strategies that are based on reading and analyzing charts are part of the technical analysis area.

Technical analysis follows a straightforward set of rules freely available on scores of websites. Happily, the simplest rules in charting tend to be the most reliable. In a later chapter we will go over several strategies that you can apply in your trades.
The most basic form of technical analysis would be to look for support and resistance levels that markets have struggled to break through in the past. Charts in this way works best in moderately volatile markets. Technical analysis is also useful in identifying trending assets.
 

Another simple way of using charts is to look at moving averages, such as the average price over 10 days. The idea is that this gives you a better representation of what the price is doing over a longer period of time.
Another simple pattern is based on the so-called relative strength index (RSI). This highlights situations where a market is overbought or oversold and warns of a potential reversal in the trend. The RSI is the total points gained on up days, divided by the total points lost and gained, multiplied by 100.
Now that you are convicted in the necessity of charts the question is where can you get them. Well, there are a lot of online charts services and software, to find them simply run an online search for "real time charts" or "charts software".
Effective charting service packages help you access the market data in real-time; this information is shown in a number of ways, which will help you in performing your trades.

Finding the “right” charting service is definitely a personal choice - it could be compared to selecting the right car. What another trader prefers could be not the same as what you select, and the other way round. That is the reason why it may be necessary for you to properly examine a list of features - with both pros and cons - prior to making the decision on a charting service.
In essence you must have a list of criteria, and you have to compare the available charting services using that list. Make your selection based on the results. Listed below are requirements you should consider:
 

Real-Time Data - You want a reliable system that will provide real-time information immediately. This particular feature by itself will leave out many of the options available, because a lot of online packages will have some kind of delay. With regards to binary trading you obviously can’t afford to face a delay.
 

Market Data Coverage - Look at markets which are included in the charting service. The majority of programs include the major U.S. markets, but if you have to have other global markets, like Asian or European markets, then you definitely have to make sure that data is available in real-time.
 

Variety of Indicators - Based on your own personal requirements, you may be interested in a diverse variety of indicators and charting methods, such as bar charts, point-and-figure charting, or Japanese candlesticks. Additionally, find out if the charting service can show basic indicators like MACD, RSI, and Moving Averages easily (I will explain all these later). If you’re serious about technical analysis, ensure that you can easily program your own indicators or modify the existing ones to your desires without having too much trouble.
 

Reasonably competitive Rates - You will need a charting service that won't cost you all of your money before you even get into your first trade. It’s necessary to shop around. Nonetheless, locating a competitive price is not to mean that the provider’s service is the cheapest. You need to be cautious with this one - the old saying “you get what you pay for” certainly does apply with regards to trading. Consider your choices. You seldom want cheap trading service that gives you next to nothing, however, you probably don’t need the most expensive service with options you won’t make use of - either. And make sure that the company you choose will allow time to test out how the service really works. Should you be not comfortable with using it, you should be able to ask for a refund.
 

User Friendly Platform - You need to have a system that you can use easily, not one that needs a degree as a computer engineer. You’ll need a system that lets you back-test strategies and program customized indicators and trading systems without a lot of difficulty.
Reputable Company - Pick a reputable provider which has a recognized reputation online for its platform and data feed. And obviously, select a provider which has superb customer service.
I hope at this point you have a much better notion of what sort of charting service can best meet your needs. Keep in mind, effective charting application is actually what will give you the velocity and ability to perform fast trades in response to breaking news. Over time, you may want to move on to more sophisticated services as you become more skilled in the investing universe.

 How Much Money You Need to Start Trading
Naturally, you will need capital to trade. Nevertheless you’ve likewise heard this warning more than once: “Don’t trade with money that you can’t afford to lose.” You may think this is simply the conventional warning that each pro inside the investing field needs to use. But it is certainly not. It is a lot more.
There is more to trading than simply using a strategy. A trader’s two major enemies are fear and greed. This is very often the case. That is why controlling your feelings is extremely important to your trading.
 

It is extremely important not to place excessive strain on yourself or your trading performance. And to maintain the stress down, you most likely should not quit your day job just yet. Prior to being a skilled binary trader, your trading should be consistent, and your gains ought to be nearly foreseeable. Provide yourself some time to prove that you have what it takes to trade for a living.
 

Regarding the sum of money you really need, that depends on you. Possessing too much money in your trading account could be equally as harmful as having too little. If you have $100,000 in your trading account and only risk $100 per trade, you may think of your losses as ‘peanuts.’ Even though we have to learn to accept losses as part of the business, we have to still by no means consider them as ‘peanuts!’ There is a balance. You need to find it.
You must fund your account properly - not too much and not too little. And be ready for a period of time where you might not generate a lot of money with it. As with everything, there exists a learning process when it comes to trading.
Numerous newbie traders believe they ought to trade all of their savings. This is obviously a dangerous belief. In order to find out the amount of money you should trade with, you must first identify just how much you can actually afford to lose, and what your financial goals are.

We need to start by identifying just how much of your savings need to stay in your savings account. It is very important to always keep three to six months of living expenses in an easily accessible savings account, therefore set that money apart, and don’t trade it! You must never trade money that you could need immediately. The rest of the sum of money will probably be what you currently have to trade with.
Have a look at the amount of money you can presently afford to trade. You rarely want other parts of your life to suffer when you tie your money up in a trade, so ensure that you consider what these savings were originally for.
 

Next, figure out how much you can contribute to your trading activities in the future. In case you are presently employed, you will continue to receive an income, and you can plan to make use of a part of that income to build your investment portfolio over time.
Two more important things to keep in mind: most brokers require a minimum deposit of $100 to $200, so this sets a minimum initial amount that you need to start trading with. This does not mean that you will be risking the whole amount in one trade, as discussed previously try to restrict each trade to no more than 5% of your account size.
Another subject that needs to be considered is your risk tolerance. Everyone has a risk tolerance which should not be overlooked.
 

Identifying one’s risk tolerance requires a number of different factors. To begin with, you should know what amount of cash you have to invest, and what your investment and financial goals are.
As an illustration, if you plan on retiring in ten years, and you haven’t saved a single penny yet, you are getting to have to have a higher risk tolerance, simply because you’ll have to do some aggressive trading to be able to achieve your financial target. On the other side of the coin, if you’re in your early twenties and you wish to begin investing for your retirement, your risk tolerance could be lower. You are able to afford to observe your money grow gradually with time.
 

Understand, naturally, that your need for a higher risk tolerance or your need for a low risk tolerance have no bearing on how you feel about risk. Once again, there exists a lot in identifying your tolerance. For example, if you entered a trade, and you see that trade go against you, what would you do? Let’s say you are hit with a $1000 loss. Would you keep on trading, or would you call it off for the day? If you have a low tolerance for risk, you would want to stop trading for the day. If you have a high tolerance, you would keep on trading.
 

This kind of decision is not depending on what your financial goals are. This tolerance is based on how you feel about your money. And, naturally, your account size plays a vital role in determining your risk tolerance. In case you have a $2,000 account, then a $1,000 loss will make you nervous, as you are shedding 50% of your investment capital.
But if your trading account size is $100,000, and you are faced with a $1,000 loss, then you might be more calm, as it is just 1% of your account. As you’ll learn, emotions are a very important element in trading; for that reason, it’s important to take the time to figure out your risk tolerance.10.

 A Few Trading Tips you should keep in mind
1. Before implementing any strategy you must check for any related news events. why? because news events may interfere with your strategy and distort the outcome that you are expecting. Bad news may cause an uptrend to swing down and good news may cause a downtrend to swing up. Before implementing any trade simply run an online search to make sure there are no adverse news events expected.
 

2. Different parts of the day coincide with different amounts of volatility in the market. For example, the afternoon, when no major announcements are expected, will be associated with less volatility than the morning hours. Thus, trade volatility (Range Out) before noon and stability (Range In) afternoon.
 

3. You can expect the market to get volatile and make large swings right after major market announcements such as interest rate announcements by the fed and job reports.
 

4. Trading stocks times is subject to the opening hours of the relevant stock exchanges. Obtain a table with the trading hours of the various world bourses.
 

5. Have a trading plan and a strategy and always stick to them.
 

6. Take time to improve your technical analysis knowledge, this will help you to sharpen your strategies.
 

7. Control your emotions and never trade when you are tired or drunk, this may lead to irrational behavior and losses. Always trade while you are relaxed and focused.
 

8. For trades with expiration times shorter than one day use 5 minute charts to establish your entry points.
 

9. While trading, your main concern should be limiting risk and protecting your capital. Develop a money management plan and stick to it, always!
 

10.Define your entry points. This is a part of developing and following your trading plan. Don't trade without having a trading plan.

Hope with this, i have been able to introduce binary options trading, i will be making a  posting on the best brokers, those with the lowest investment rate and lowest deposit rate as-well.please don't forget to drop your comment and any question, hope to hear from you. 

THANKS