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How to Trade Binary Options Profitably by Joe Keane - HTML preview

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1.  Introduction and Overview 

Binary Options are among the fastest growing retail products for traders.  They have many attractive features but many traders have found that they do not always deliver on their promise.  Has this been your experience?  Where is the problem?  The fact that you have downloaded this eBook suggests that you believe that Binary Options are worth examination, but you have questions.   That’s a good start.

Most of the training materials on trading binary options identify features such as the market selection, the timing of the entry, the amount invested and the payout ratio as the key determinants of performance for traders.  This is true, but only up to a point,  Because while these factors determine the outcome for any particular trade, profitability in trading means earning consistent positive returns over the longer term, that is, over a large number of trades.  Properly managed, the outcome of any particular trade is not what matters but the outcome over a long series of trades.  

The concept of risk is central to a trading strategy.  People usually avoid risk, that’s a natural response.  But traders realise they must face risk, indeed, they must seek risk in order to make profits.  And once you find risk you must manage it.

The key factors of success when trading binary options are

  • Broker selection;
  • Money management;
  • Market analysis; and
  • Trader psychology.

Each item in the list involves risk and its management.  With the exception of the need to place additional emphasis on the first in this list, these are pretty much the same for all trading instruments.  However, the strategies that must be adopted are subtly different when trading Binary Options.

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This eBook addresses each of these in turn and this list determines the outline of the book.  The next section provides an overview of Binary Options.  Any readers familiar with trading these securities can move through this fairly quickly although it is well worth spending time to ensure you understand the key determinants of returns.  Chapters 3 to 6 then deal, in order, with broker selection, money management and market analysis.  

The structure of the final element of this outline – the market analysis – gives the 4x4 strategy its name.  It analyses markets at 4 different time frames, which can vary depending on the overall perspective of the trader but should retain approximate scale proportions.  The analysis also seeks to answer 4 questions the trader must ask:

  • In what direction should I trade a particular market – up, down or no trade?
  • Does my system permit me to trade this market?
  • What rules apply to entry?
  • When should I enter the trade?

It is only when these questions are answered by the analysis can a trade be entered.

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Trader psychology is a huge area in trading and trading according to a plan is essential to ensure you have the discipline to make sure you remain consistent with that plan.  Sections 7 and 8 provide a way to do this in practice.  This is vital because if you do not trade consistently according to a plan then you will be trading randomly and you will lose all you money.  Of that you can be certain given the structure of binary options.  The final section then points you towards further sources of information and contains an important offer.    

Remember, it’s up to you to determine if you are profitable.  Binary Options provide a great opportunity to trade financial markets easily, with a small capital fund and with good opportunities for profit.  But most traders lose.  Binary Options provide you with the opportunity.  But there are certain steps you must take if you are to be profitable. If you implement the approach outlined in this eBook correctly then you will be in a good position to avail of the opportunity.    

One final point.  Not only is it important for you to learn about trading, but it is also important for you to monitor how well you are learning.  It’s very easy to misinterpret a point or to miss something important.  So, to help you further I have written a workbook to go with this eBook.  

We are also offering you two free bonus eBooks.  The first entitled ‘Markets in Mind’ is from Andrew Dawson and deals with psychology and mental preparation for trading.  

The second deals with a very important issue where you will have  to make a decision: Which broker should you choose?  There is one clear rule: deal only with a regulated broker.  

To get your free copies of the Workbook and the other bonus eBooks just click here or on the image below. There is no up-sell and no commitment here – they are all free for you to download.

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I recommend that go through the workbook and then move on to the other eBooks.  The workbook also contains answers and explanations and you can always come back to this eBook to get further information on the points raised.