Unlike a traditional trading method, binary options lets you predict the outcome in your way. Perhaps it is because of its versatility that it has become the preferred norm among digital traders today.
Binary options trading gives you two choices: either the price of your asset goes up or down. If your prediction is correct, you earn a greater return on your investment. In contrast, you mitigate some losses if you are in touch with a reliable broker. What’s more, even novice traders can try out this method without prior knowledge.
With that said, here are the top reasons why you ought to consider opening one of the best binary options demo accounts and start trading in binary options this year.
Table of Contents
1. Faster Payouts
With 60-second binary options, you can trade a hundred times in a day! If your prediction is correct, the binary options trading method lets you earn around 65% to 90%. For example, if you invest $50, you can expect to have $82.5 to $95 in return.
Binary options give you short-term payouts, which means more profit per minute. In addition, it is more flexible than traditional trading methods, as traders can trade using fiat money, cryptocurrencies, bonds, etc. Plus, a good broker ensures your fund security, projects your overall profit, and tries to get as much as possible before contract expiry.
Therefore, a binary contract can last 5 minutes or even more, depending on the duration. And, you have an option of quitting when you are satisfied with the profit made.
2. Gives High Returns
With binary options trading, expect to get fixed or even higher returns. Usually, traders know how much they will earn before the expiration or when the market closes. Therefore, it is easy to predict what profits you will make.
However, returns are subject to your assets’ volatility and overall demand. For example, if you are trading in cryptocurrencies, it is susceptible to US dollar changes affecting your returns. Generally, a reliable options broker will offer you returns from 60% to 95%.
Unlike forex or stock markets that give you a fixed 10% return, binary options trading provides you with 90% high returns because of its “all or nothing” approach.
3. Demo Accounts to Get Started
Most reliable binary brokers allow new traders to explore how binary options trading works. They give you access to free demo accounts, reflecting the ongoing market trading trends. With a simple sign-up, you will simulate everything that goes on when trading with real money.
Therefore, look for a broker’s website that offers plenty of simulating options. For example, if the payout rate on a specific asset is 87% in actual trading, demo accounts should let you accurately simulate that.
4. Predictable Risks/Losses
To mitigate any risks or losses, traders use a stop-loss order. It is when a stock/asset’s price reaches a designated strike price, and you put a stop to your trade. Once it comes to the set price, a trader sells off their stocks. It is employed when you are experiencing some losses and when the risk gets too high.
Therefore, routinely using stop-loss orders can lessen your losses. A trader must benchmark a 1% to 2% risk of capital on each trade, as more can increase your capped losses, which gets harder to manage in the long run.
Try to use consecutive loss daily stops, where you may call it a day when you lose more than your predicted number of trades. In addition, set a stop-loss on how much you are willing to risk or lose in a day.
5. Back Out Anytime
Choose to exit a trade with an early closure tool if it is turning against you. Simply put, know when to give up. Have a target in mind, and once you hit that threshold, exit the trade ASAP.
In this case, a broker lets you set the expiry time of the binary contract. It allows you to have a choice on when you can quit the trade. Try to make your trade meaningful by putting stop-loss once you hit the set price. Put stops on candle lows and highs or resistance levels to lessen the impact of your loss.
5. No Huge Investments
Additionally, binary options trading lets you start with your choice of investment. Whether you want to start with $10 or $50, you can do significant trading easily. Therefore, a good broker lets you open a trade account based on your budget.
With this versatility, even a layman can participate in this “all or nothing” trading option. A trader can incur capped losses; however, this loss is meager when you start with only small capital! Therefore, it is something that you can overcome easily with wise suggestions from your broker and sound strategies.
If you want to make some profit, start exploring some binary options trading. Not only will it give you a faster payout and higher returns, but it also gives you control over your trade. You can easily back out of the trade when it results in a loss or use sound strategies to curtail your risks. Therefore, start binary trading now to increase your prospects.