If you have ever thought about investing in the stock exchange or trading stock options, there is an alternative that you might wish to think about. This alternative is binary option trading. The manner in which it works is that first you pick an asset like a stock index, and individual stock, a commodity, or a foreign currency pair.
You then make a decision on a time frame which can be anything from one hour, to the end of the trading day. Lastly, you decide upon the direction that the asset will move. If you feel it will move up by the end of the time period,you will select a call option. If you think the asset will move down at the end of the time period, you choose a put option. After this you decide upon the amount of the bet or investment you are prepared to make, and you are done.
The nice thing about binary trading is that you can trade with an extremely small amount- as little as $30. The other nice thing is that you always have a limited degree of risk. You can certainly lose the entire amount you bet on an individual trade, but no more. This really is totally different from some type of options and commodities trading in that you are trading on a margin and may be subject to a margin call if the investment goes against you.
The return for binary options is commonly in the 70% range. So after as little as an hour or so you may make 70% return on your investment. Since online brokers don’t charge a commission for trading binary options, it’s not necessary to deduct that from your earnings.
Although it seems deceptively easy to forecast whether an asset is going to be higher or lower one hour from now, the reality is that it is very difficult, nevertheless it can be accomplished, and with a 70% return you don’t need to be right frequently to come out ahead.
Looking at recent trends is one way to approach the forecasting. Although trends can suddenly reverse, they can be a reliable way to predict prices for the short term. Obviously there are various other technical analysis methods which can be used besides trends. You will need to practice on paper before moving in and risking real money.
Be cautious about spending thousands of dollars for some system that you can’t verify the performance of, or that doesn’t have a performance guarantee.
An easy method to trading binary options that’s available absolutely free can be found here www.binaryoption-trading.com. You may also want to consider day trading software