How to Make a Trade
The steps for completing a binary options trade are going to vary dependent upon the type of trade you plan to use. With that said, all of the various trade types can be executed in one minute or less once you’ve completed the analysis process. Although each platform varies in design, the selection process should remain basically the same. Below we detail the steps for completing each of the main trade types.
Put or Call Trades
This type of trade requires you to select whether the price of an asset is going to be higher or lower than the starting price at the time the trade draws to a close. To execute such as trade, you’ll need to select an asset, and expiry time. You’ll also need to decide upon an investment amount and then enter your selection – Put or Call. Put is used for a price decrease, while Call is used for a price increase.
60 Second and Long Term Trades
These trades work exactly the same as the Put or Call variety. The only difference is the availability of expiry times that come with them. Your broker will determine which times are available, but as a general rule you can expect 60 Seconds trades to provide super-short expiry periods of two minutes or less and Long Term trades to run anywhere from one day to one year. The steps for trade execution are exactly the same as above, you’ll just be selecting different expiry times.
One Touch Trades
This trade type requires you to predict whether or not the price of a selected asset is going to touch or exceed a target price while the trade remains open. If this does not happen, the investment amount is lost. If it does, the trade ends immediately and you’ve earned money. To execute this type of trade, select an asset and enter your investment amount. One Touch trades often run for an entire week, which works in the favor of the trader as sufficient time is often needed for a touch to occur.
These trades are sometimes referred to as No-Touch, but they function basically the same. The goal is for the price of your selected asset to not touch or exceed an upper and lower price target. Relatively stable asset price is a must if you’re going to profit from this type of binary options trade. The asset price must remain within the boundary for the entire length of the trading period in order to be profitable. Trade execution is simply a matter of selecting an asset, expiry time, and investment amount.
Pairs trading is not available in every platform, but many brokers are now starting to offer it. These trades present you with two different assets, with the goal being to determine which of the two will outperform the other. For example, Apple and Starbucks could be paired and you would need to decide which is going to have increased more at the time of expiry. To use this trade, select your pair, select your expiry and investment amount, and select the asset that you feel will win the price battle between the two.
Remember, analysis should come before any trade execution. Analysis findings should always serve as the foundation upon which your investment decisions are made. If you don’t have time for analysis, do not trade until you do. Most brokers provide basic analysis tools and market reports. Be sure to use these to your advantage. Easy profits can come from trading binary options, but this only holds true when the trader has gauged the upcoming asset price movement with a reasonable degree of accuracy.