You may be thinking that once you invest in a stock on a market you may have to wait a long while before you can start raking in the profits. Indeed, for big and powerful companies that is often the case – they gain value slowly and it can take months or even years before you see your investment starting to pay off. However, there are also markets which are also quite volatile, assets whose value can rise and fall significantly in the period of a single day, and this is where binary options come in. With this type of trades, it is possible to achieve substantial profits quickly. Let’s examine how!
APPROACH THE MARKET WITH BINARY OPTIONS
Binary options work in a fairly simple way – you set the expiry time, you choose whether the price of the asset is going up or down (hence the name BINARY) and you wait to see if your prediction was correct. But the expiry time plays a major role here because you can set your trade to close in an hour, half an hour or even a minute or so in some cases. It all depends on the broker you choose and the platform they use: a good platform will have all sorts of options and trading tools at your disposal. MetaTrader 4 is the undisputed king in that respect in the industry at the moment, but some brokers will go out of their way to develop their own platforms. IQ Option is a good example of that.
So, if you can find the right broker and make a series of right predictions (which can sometimes be made in the space of several minutes), you can turn your initial investment into a substantially larger amount of money. But while the main principle is fairly simple, there are some things to keep in mind.
Generally speaking, the behaviour of an asset can be predicted if you keep track of the market and the industry the asset is in and are aware of the major factor influencing the asset’s price. The thing is, a price’s curve is never a straight line. So, for example, while the prediction that a price will be lower by 5% at the end of the day can be correct, the price can oscillate greatly in that time period. Therefore, if you opt to invest over a short period of time, you have to be aware of the risk – the price can suddenly change course for a while and then get back on track. In other words margins trading, making a long-term prediction is in many cases easier.
Another thing to consider is the fact that if your prediction turns out to be incorrect you lose everything you invest. So, if you make a couple of good guesses in a short period of time take a moment to reflect on what you want to do next and how much you really want to invest. Yes, it is possible to make a quick profit (profit is usually about 90% on a successful trade), but you need to be careful not to get carried away.
IN THE END…
To conclude, the first thing you need if you want to make a quick profit on the market is a reliable broker with an appropriate platform. See if the platform offers increments of time that are small enough for you – some may not go below an hour, for example. Apart from that, be aware that the closer you set your expiry time to the time you open your trade the closer you get to relying on just dumb luck and not detailed market analyses. Of course, if you’re sure a price is heading one way at a particular moment in time go for it – the advantage of Virtual Stock Trading is that they offer a lot of flexibility, although you need to be aware of the risks, too.
Psychology also plays a role here because you need to know when to quit. If two trades go your way in the space of two minutes, you may want to quit while you’re ahead. In the end yes, it is possible to earn quickly via online trading (especially binary options), primarily because of the big profit margins this kind of trading offers, but there are plenty of things to consider, so don’t go in blindly. Inform yourself about the best broker for you first, for one thing. Good luck!
BIO: Max Rothstein is a long-time member of the binaryoptionstrading-review.com team. He has been in the online trading business for years, primarily testing and examining brokers and the services they provide. With years of experience under his belt, his reviews cut right into the heart of every trading website.