The Advantages Of Binary Option Trading for Beginner Traders in 2020


Binary options are very popular these days, due to easy trading methods and large profits. Many novice traders wonder what binary options are and how they work? In this article, we explain what binary options really are.

Binary options are one of the financial instruments where we can buy a contract from an asset and will benefit when the contract expires.

In binary options there are only two possibilities, namely up or down, meaning that we can choose whether the price will go up or down when the contract period of the asset expires.

What distinguishes binary options from others is that in binary options the profit is already determined at the beginning of trading. So we already know how much profit will be gained when the contract expires. Some benefits can also be found if you already understand binary trading. Some of these advantages are:

1. Easy to Get Return

Unlike other investment programs that have to wait weeks or even months to get a profit, binary options can provide returns in just hours, minutes, or even seconds. Traders only need to choose the expiration time they want to determine when the option position will expire. In general, binary options brokers provide a wide variety of expiration time options. So for you short-term traders who are lazy to linger holding positions, short expiration times like 1 hour, 15 minutes, or even 1 minute can be the main choice and can help you shorten the time. 

2. Simple & Very Easy 

A stop loss attendance can also be one of the advantages of binary trading, because that feature can complicate the system and sometimes it is still a debate among traders. The main principle in how binary options work is to determine whether prices will increase or decrease. If a trader expects the price to rise and the price to actually increase from the entry position when the expiry time arrives, then the trader gets a profit.

Although it is fairly simple, it does not mean that it is always permissible not to use technical indicators or conduct fundamental analysis, you must prioritize accuracy. Because, if only you are careless then the benefits you expect may not be at all you get. To find out whether the next price movement up or down, analysis still needs to be done. However, in binary options there are no complex predictions about the potential for stop loss, take profit, and the like.

3. Transparent / Very Open 

Binary Options uses a fixed return (payout) system whose range the trader knows about, even before opening a position. The transparency of binary options is closely related to the profit and loss calculation system. Unlike conventional trading where profits or losses follow the large price changes,

This effect will not be felt in binary options where profit and loss calculations have been fixed, and can be known before opening a position. In addition, the benefits of binary trading that are not burdened by potential requotes, slippages, or widening spreads, make it conducive for traders who don't want to mess around to track the truth of prices.

4. Lack of Risk for Learning to Trade in Various Markets 

Binary options are not the same as conventional trading, but the principle of analysis is not much different, because they both aim to estimate the direction of the next price movement. Therefore, binary options can be used as a trading learning solution in various markets. Here, traders can place positions very easily, without the need to take into account trading volume problems.

To be able to open a position in the forex and stock markets for example, traders only need to do an analysis in each market and run it on one platform. There is no money management arrangement related to trading volume, there is also no risk of loss from floating positions. As long as traders can use trading capital wisely, the risk of trading in binary options can be minimized, regardless of the market used.

The Advantages Of Binary Option Trading for Beginner Traders in 2020 The Advantages Of Binary Option Trading for Beginner Traders in 2020 Reviewed by Kampus Seo on December 22, 2019 Rating: 5

Post AD