Is it Possible to Become a Binary Options Millionaire?

Some of the most exciting and potentially lucrative financial products on the market today are binary options, which earn payouts by predicting the future value of an underlying asset. Binary options are valued for their simplicity: They have two fixed payout values, one if the prediction is correct, the other if the prediction is incorrect. These options are both high-risk and high-reward, as the average winning trade brings in a return of 70% or more and the average losing trade takes a loss of 85% or more. Trading binary options is easy to learn and hard to master, yet those who do master the market can bring in huge returns.

Getting Started

Because option values are flexible and most brokers cater to the new investor, binary options  are some of the most accessible products available today. It is possible for a trader to open an account with as little as $100, compared to $10,000 or more for stock and commodity accounts. Better yet, most binary options brokers provide eBooks, online seminars, training videos and other resources to help their investors get into the market.

Making a trade is likewise a very simple affair. The investor chooses whether to buy a call option, which predicts a net increase in the trading price of the underlying asset, or a put option, which predicts that the asset will decrease in value. He must select an investment value and an expiration time, typically 15, 30 or 60 minutes after the trade is executed. The interface immediately displays the risk and reward on a given trade, which makes analysis of the possible outcomes very easy. When the trade is executed, the current value of the asset becomes the strike price, which is the binary option’s break-even point.

When a binary option expires, the current value of the underlying asset is compared to the original strike price to determine the payout. A call option returns a high, fixed payout if the trading price is higher than the strike price and a much lower payout if the price is lower. A put option is just the opposite: The high payout is awarded if the current price is below the strike price, and the low payout comes if the current price is above the strike price. In the event that the price at expiry is equal to the strike price, the option simply refunds the initial investment.

Tools for Success

Since binary options trading depends on predicting price movement in the short term, most successful traders make extensive use of technical analysis. They pore over candlestick or bar charts and look for telltale patterns that predict turning points in the market, then purchase call or put options that align with the direction that the market seems to be going. Technical analysis also uses various mathematical indicators to determine whether price increases or decreases are imminent. By predicting market movement, good binary options traders can make winning deals more often than not.

Trading Successfully

While becoming a millionaire is not easy in any field, the massive rewards offered by binary options definitely make huge gains possible. Here are a few things to keep in mind to push for maximum success in the market.

Use Multiple Indicators: Technical analysts use dozens of patterns and indicators to predict future market movement for good reason: No indicator is good enough to make a profit on its own. Successful investors know to rely on multiple sources of data and only pull the trigger when several indicators all say that it is time.

Have a Plan: As the old adage goes, those who fail to plan plan to fail. Investors who are serious about making money in binary options treat their trading as a business, if a particularly exciting one. Even a bad plan is infinitely better than no plan at all.

Practice Makes Perfect: Most brokers are more than happy to let their customers trade virtually without risking actual funds. While it can be tempting to rush in and start making money right away, the best way to begin is by practicing and becoming familiar with the market.

Separate Your Trading Funds: Even with a great plan, accurate indicators and plenty of experience, there is always some risk of failure in binary options trading, and predicting the market is hard enough without being concerned about losing the money for next month’s rent. Don’t invest any funds you are not prepared to do without.

While there is plenty of work to be done to truly master binary options trading, those who understand the market and persistently work to make winning trades can reap huge rewards. For enthusiastic and disciplined investors, binary options are a great way to achieve great financial success.