Binary Options and Dow Focus Group are simple to trade as you only need to predict the direction that the asset will move whereas with traditional options you also need to predict by how much the asset will move. In addition the expiry times can be very short which can make the outcome easier to predict.
Once logged into your account with your broker you simply select the asset, select the direction (CALL = Increase in price, PUT = decrease in price) and decide how much you wish to invest in the trade. Finally select start/submit and your trade is recorded. Now all you have to do is wait for the trade to expire to see if you are “in the money”.
Experienced traders use a proven trading strategy and follow the information wires looking for news and events that could have an effect on their chosen asset price. It is important also to check an Economic Calendar regularly to see if there are any announcements or events scheduled that could influence the asset price.
Unlike other forms of trading the potential profits and losses are known upfront. You cannot lose more than your original investment in the trade. Some brokers now return up to 15% of any losses which is unique to Binary Options trading.
Many traders use the 5% rule of thumb when trading. They never invest more than 5% of their total capital in any one trade which protects them from one bad trade wiping them out completely.
Payouts are usually higher from Binary Options trading than from other types of trading and typically range from 75%-85% for standard options. In addition, the expiry times are short with most brokers offering 60 second, 5 minute, 15 minute, 1 hour and end of day so you know quickly how you are performing and fast returns are possible.
