One of the biggest problems that traders have is identifying the big markets moves from which to profit. Every trader dreams of the ‘big one’; where they identify a move that terms into the start of a longer term trend and the profits just keep mounting up.
However the reality of identify the start of a major trend is that it is not that easy to do. You can find yourself underwater and losing a number of positions on your account while you are on the hunt. However if you trade with binary options such concerns will become a thing of the past.
One of the many big benefits of binary options trading is that you don’t have to identify the biggest market moves in order to make yourself high profits on your account. In fact you can profit from the market ending just one pip in your favour. You earn the same return from your binary options broker on your position if the market finishes one pip on your side as you do it ends one hundred.
The reason for this is that with these digital contracts you only need to spot if the market is going to end higher or lower than the price at which you purchase the contract. Binary options offers fixed risk and fixed profit trading. Essentially it is a two way wager as to which way price will move over the duration that you set on the contract.
Let’s take a look at an example of how this works in practice. With a standard Higher/ Lower contract you need to specify if the price of the asset you are going to trade will end higher or lower than the price at which you purchase the contract. For an ‘in the money’ expiry you can expect to earn a set return of say, 70%. This is paid out if the market ends just one tick in your favour at the point of expiry. If the market ends more than this your return is not affected.
This fixed risk trading makes for a great way in which you can trade on the currency markets and make fast profits. This means that you can make as much profit from just a single pip move as you can from one that yields much more. In this way you can place the Forex markets and make high and fast profits from trading on foreign exchange.
The flip side of course is that you are also able to limit your risk. With the fast paced movement on these markets you can quickly find yourself underwater. The fixed stake that you pay for your contract is the limit of any loss when you are trading. This is good for beginners who don’t want to risk too much money when trading. You can only lose your stake and no more. This applies to all types of trading contracts that you use when trading with binary options.
Investing With Binary Options 