How to trade binary options for beginners

Binary options trading is a very accessible form of investment opportunity. You do not need any sort of qualification or investment experience. A large amount of initial capital is not required either.

This has helped make binary options tremendously popular with a large number of traders from all over the world and from all walks of life. Everyone from finance professionals, to homemakers, blue collar workers and college educated professionals have been able to improve their financial situation by trading in binary options.

But even though this form of investment tool is very easy to understand and to make money with, it can all seem a bit overwhelming when you’re new to the market.


If you are a beginner, please read on. In this article we will tell you about all the important steps you should make in order to get off to a profitable start as a binary options trader.

Find a free demo account

You can learn a lot about binary options and how to trade in them on the web. But there is no substitute for firsthand experience.

Trading is all about making decisions quickly, and to enter the market at just the right time. This is something it is very hard to learn from a book. You simply have to throw yourself into it.

But trial and error can be a very expensive way to get the hang of binary options trading. In the beginning you can make rookie mistakes, you can make miscalculations and you’re far more likely to misinterpret signals.

All these factors can end up costing you a lot of money in terms of unsuccessful trades.

Luckily there is a way to enjoy the benefits of hands on trading without incurring any risk or cost. That is to get a free demo account.

A free demo account is an opportunity that several leading binary brokers offer their customers. It is a chance to execute trades with only pretend credits – not real money. This enables you to experiment and to get the hang of binary trading without risking a single cent of your own money.

Obviously, you cannot make any money in free demo trading, but the payoff in terms of lessons learnt can be priceless!

Choose a broker with a low initial deposit limit

For beginners, it is important not to be overly ambitious or aggressive. Don’t throw yourself into binary options trading, investing everything you own, hoping to earn enough to buy a yacht by the end of the week. Slow and steady wins the race.

For this reason, we urge beginners to choose a broker with a low initial deposit limit. All binary brokers operate with a limit for how little you can deposit into your account.

This limit varies from as little as $10 all the way up to tens of thousands of dollars for professional or VIP-level accounts. The market average is around $250.

Now, $10 is not enough to make any kind of a meaningful return on binary options trading. You need more capital than this. But depositing thousands and thousands of dollars before you have established conclusively that binary options trading is for you, seems foolhardy.

Most brokers offer beginner accounts with reasonable deposit limits. Find one that’s right for you.

Choose a broker that allows small trades

Another important consideration that beginners need to make when choosing a binary broker, is the size of trades allowed.

Binary brokers operate with limits for how little and how much you can invest per trade. It is obviously of tremendous importance that you choose a binary broker with limits that suit your budget.

Some brokers allow you to make trades of only $1, others have limits that exceed $25.

A golden rule in this business is that you should never invest more than 5% of your trading capital in any single trade. Make sure that your broker allows you to make investments on this scale. If not, you’re in the wrong place.

Take full advantage of your broker’s education center

Once you have opened an account with a binary options broker, you enjoy full access to its trading platform and can go right ahead and invest in binary options. However, it might be wise to prepare a little first.

Learning the basics can help you avoid a lot of silly mistakes, and enable you to attain success faster than your peers.

Most binary brokers offer some sort of education center on their websites. There, you can find informative articles, video tutorials and extensive FAQ sections.

The education center should be the first port of call for all beginners. You might be eager to get going, and to start trading immediately, but by studying a little bit before you put your money on the table, you stand a better chance of getting off to a flying start.

Take time to study technical analysis

A very important part of binary options trading is technical analysis. Technical analysis is a way to interpret market data in order to make predictions about future price movements.

Technical analysis enables you to make sense of graphs and statistics that would otherwise seem impenetrable. By mastering this important skill, you enhance your chances of earning money on binary options greatly.

The only thing you need to do in order to make returns of 85 % or more on a binary options trade, is to predict whether the price of a specific option will go up or down during a certain time-frame.

In order to do this, your best chance is to look closely at what has been happening with the asset’s market price in the past. Technical analysis is an efficient way of doing exactly that.

Consider if binary signals are right for you

Whereas all binary options traders really ought to attain at least some understanding of technical analysis, it is possible to outsource this part of the trading process to the professionals.

A binary signal is a recommended trade, that tells you what is likely to happen with the price of an asset during a certain time frame.

Binary signals are generated by software solutions that have been specifically designed for this purpose. The software is able to analyze an enormous amount of market data very quickly. By using an algorithm, it is able to make reliable predictions on this basis.

Companies called signal providers sell signals to binary traders. You can sign up for a subscription with a signal provider for about $100 per month. In return you will receive about 5-10 binary signals per trading day.

A good signal provider will make correct prediction about 70% of the time. Trading with this sort of strike rate is more than enough to make a very solid profit over time.

Many beginners prefer to rely on binary signals rather than spend a lot of time and effort on generating their own signals, using technical analysis.

Could a binary robot be your shortcut to success?

There is another way in which you can trade on binary signals, and that is to use a robot. A robot is a computer program that not only generates signals, but also carries out trades automatically.

When you sign up with a robot, the system will find trading opportunities in the markets, and execute the trades on your behalf. You do not have to do anything other than specifying how much you would like the robot to invest per trade.

This is the very easiest way in which to make money on binary options trading. A lot of beginners use robots.

The only drawback with robots is that they can be prohibitively expensive. Fortunately, the best, new binary robot – BinaryOptionRobot – is free to us.

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