It is possible to utilize the traditional route for trading in stocks and this can provide a good rate of return. However, binary options trading can be an excellent alternative for several reasons. The first and perhaps most important of these is the fact that your risk is limited. Binary options trading involves purchasing a trade for a fixed amount. This is the amount you will lose if the trade goes wrong. You will also know how much return you will make if the trade goes as predicted.
Binary options trading also has the advantage that you do not need a huge level of market knowledge to start trading. Simply understanding which direction, a price is likely to move in is enough.
Trading in the stock market has been an accepted and lucrative way of investing for many years. However, many people are restricted by the cost involved in trading. Trading in binary options allows anyone access to investing in the financial markets with easy to understand and place trades. It is much simpler to predict the direction a stock price is likely to move in within a short time frame than it is to understand and commit to the complexities of the traditional stock market trading theories.
You can trade multiple times in one day and every trade has the potential of generating eighty percent returns. This is a difficult level to reach and sustain with traditional stock market trading. With just a little practice you can even trade weekend options and potential generate rates of return as high as five hundred percent; something that few, if any, other trading markets can match.
Your risk is limited to the purchase price of your contract and there is no need to purchase any share; you are merely purchasing an option on the share price movement. However, to ensure you have the best chance of success when binary options trading it is advisable to engage in some analysis. There are two main types:
Technical analysis involves studying the price charts and other statistical information regarding each asset. It is often possible to see a pattern which will be repeated and allow you to decide when to trade and in which direction.
Fundamental analysis involves studying the market and understanding how economic factors may affect the movement of share prices. This also involves being aware of how economic news can affect the markets.
Although it is possible to trade looking at just one of these options it is best to summarize both before you commit to any trade; this will provide you with the highest chance of successfully trading binary options.
It is worth noting that you can choose from a wide range of stocks; just as you would with traditional market trading. These include Google, Microsoft, Apple and even Coca Cola.