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The purpose of this book is to show you how to make money trading Binary Options. Binary Options are a popular investment instrument for trading stocks, commodities and currencies. Trading Binaries is very simple and straightforward, all you need to do is decide which of the two directions the asset will move, up or down. And binaries has quite a high profit potential.
Binary options allow even beginners the opportunity to succeed with financial trading. Actually people that have minimum financial track record can easily make money by learning how to trade options online.
This book features the in and outs of binary options as well as strategies needed to achieve success in trading binaries.
Here are some of the topics you'll discover while reading the book:
~ The single most critical factor to binary options success - ignore it at your own perils.
~ How to prevent falling prey to a dishonest broker.
~ Simple, easy to copy ideas that will enhance your chances of winning trades.
~ How to spot a Binary Options scam.
~ What you need to succeed in Binary Options.
~ Advantages and disadvantages of trading binary options.
~ Effective risk management strategies to help you minimize your risk and conserve your capital.
~ Key factors to successful financial Binary Options trading.
~ How to develop binary options investment strategies and entry points signals that work.
~ A list of easy-to-follow tips to help you improve your trading successes.
~ How much money you need to start trading.
~ All this and much much more.
Sample Content:
There is one critical issue regarding Binary Options that I want to address right at the beginning of this guide and that is broker scam. In my opinion, the single most critical factor to your Binary Options trading success is that you trade with an honest and reliable broker. Why? Because once you fall into the hands of a scamming broker, no matter how effective your strategies are, you are bound to lose all your money.
Now, the word must be said - Binary Options are a legitimate and a viable financial instrument and most binary options brokers are honest and reliable - however, there are a few bad apples out there that give others a bad name.
So how can you avoid falling prey to a scammer? Here are some ideas to help you with this.
For starters you can choose a broker from a list of safe brokers. Such a list can be found at the BizMove Binary Options Information Center (http://www.bizmove.com/trade/), you can also find it by running a Google search for 'BizMove binary options'. The brokers on this list were checked and confirmed to be honest and trusted.
What if you want to trade with a broker that is not on the safe list? Here is a simple strategy that will help you choose a good broker. Once you have decided to trade with a new broker, start small and watch for any irregularities in the behaviour of his trading platform (see below). Trade with small amounts of money, test the waters first, once everything feels OK and you are more confident with the broker, proceed with your planed amounts and strategy.
Now, How can you spot a scamming broker? I'm going to reveal to you now how a binary option scam works - once you know how it works it will be easy for you to identify it when it is being tried on you.
In a typical scam the broker manipulates the movement of the underlying asset, usually upon the expiry time, in a way that the outcome will be in favour of the broker. For example, If the binary option is supposed to expire at, say, 11h30 and at that time it is "in the money", the option is manipulated to remain open until, say, 11h31, and that last minute may be just enough for your option to expire 'out of the money'.
According to one of the traders that was a victim to a scam, the broker has a system where you place a trade and a clock begins to count down to the expiration, when the clock ticks to zero you should be awarded a win or suffer a loss - until here this is a standard binary options trade, but hear what happens next. After the clock ticks to zero, you see this, "Expiring...." for at least another 30 to 60 seconds. During that time, if your trade was close, the stock move just enough for you to lose your money.
The scammer uses a trading platform where the trader has no way of having an exact time for the trade to expire because the clock goes to zero, but the broker keeps it open until it moves to where they get the investor's money.
Since this particular broker features the Reuters logo on its site, one of the complainant investors has been spoken to by Reuters who have informed him that they are looking at opening a case against the scamming broker as he is at risk of being fraudulent and is using the Reuters name to enhance his credibility.
Another complaining investor stated regarding this system of scam: "... I noticed that the web site used to track my trades was having issues with the trades actually expiring 30 to 60 seconds after the time had run out to zero. During this extra expiry time is when the strike amounts would move and I would not be awarded my winnings if they moved just enough for me to lose. Then the site started slowing and freezing so that I could not see my trades, track anything, or see information regarding possible trades."
In addition to observing the expiry time behaviour of the broker's trading platform you should also examine the behaviour of the broker's asset's price movements during the contracts' time frame. You want to make sure the broker's chart follows the market accurately. You do this by comparing the broker's chart movements to a real-time chart of the same asset.
Now you know what to look for and how to identify a broker that uses scam techniques.
On a final note - there is one misconception about how binary options brokers make money that needs to be cleared. Some traders voiced concerns that they are trading “against the house” thus the brokers have an incentive to alter the data towards favourable outcomes for the broker. Well, this is not the case, an honest broker will derive his income from the difference between the total sum he pays to have won trades and the total sum that he gets from the losing trades.
Let's look at an example - this is simplified to make the point. Say there are only 2 trades, same asset, same time, same expiry time. One trader chooses 'Put' the other chooses 'Call'. Now the broker is indifferent as to what will be the outcome of the trade and which of the two traders win the trade, the broker's profit will come from the difference between what he gets from the loser and what he pays the winner.
You see, binary options brokers have a viable business model that is not dependant on the outcome of the trades. That's not to say that there are not a few dishonest brokers that are willing to defraud their customers for a dubious short term gain that will eventually cost them their business.
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