Digital Options Trading Explained

Binary options are the most lucrative financial investment in the market right now. Due to its low investment risk and higher chances of greater ROI, several traders are now turning their attention towards investment into Digital options. You do not need to wait several years to get returns from binary options trading, and there isn’t much knowledge required to do it successfully, just be sure to follow the steps in this Digital options trading tutorial for best results.

Actual functioning of Digital options trading

The basic functioning of binary options trading revolves around call and put type of financial investments. Binary implies bi-polar which means trader either selects up side or down side of the financial assets as per the current market trends. In such type of trading, an investor selects one type of security for investment and invests a particular amount into that security.

After this investment, it is the trader who decides which side the security would go. The trader can choose down side (put option) or up side (call option) depending on his/her own market analysis. Once the trader decides the probable direction, the binary trading broker software calculates the final payments and the trader submits the final order. This binary options Trading Tutorial was written to explain the basics of profitable options trading.

7 steps digital options Trading Tutorial to garner maximum ROI in Digital options trading

If you want to be profitable and successful binary options trader then you must follow the proven 7 steps process laid out in this binary options trading tutorial:

1) Perform proper fundamental analysis Fundamental analysis is the first and the most important building block of any type of market research before you start deciding your investment into any type of binary trading. You need to have high quality stocks in order to perform profitable trades in the short term as well as in the long run. This process actually involves screening different financial securities and finding out the most profitable ones to get higher ROI.

2) Create your own watch list The selected financial securities should be written down on a piece of paper. The most promising ones will come under a special list known as your watch list. This list would contain the most promising and potentially profitable securities that have the capability to provide you profits over long term.

3) Perform technical analysis The technical analysis is really a critical process that helps to find out the best financial products on your watch list and it also helps to select the best option trades. Important technical indicators as well as certain price patterns help you identify the most profitable trades during this process.

4) Potential trades After fundamental and technical analysis, one can easily find out the most promising trades that can provide the best ROI. This process involves pre-selecting the options that one can easily buy and sell in the market.

5) Proper follow-through process Creating follow-through rules makes it easy to trade sensibly in the market.

6) Right exit strategy Entering any type of binary trading needs to have a proper exit strategy to manage the investment risk. There are lots of variables present in any type of financial trading. So you need to be thoroughly ready to face any investment risks during the trades.

7) Proper money management Money management or risk management is equally important throughout this trading process. You need to keep more finances than your actual investment into trades in order to stay financially safe and sound.

What Are Binary Options? And Why Trade Them?

Binary options are a simple and rewarding financial trading product. They deliver a fixed come back on every trade what is made, based on whether the trade was “In The Money”, “Out Of The Money” or perhaps a “Tie”. Binary options (also know as digital options or BO for short) – tend to be one of the fastest growing financial trading products inside the world because their comfort, together using the some of the certainty which they provide on every trade, makes them an attractive trading tool for quite a few financial investors.

When purchasing a binary option the potential homecoming it offers is certain as well as known before purchasing is made. Digital options can be purchased on virtually any financial product and can be purchased in directions of trade possibly by buying a “Call”/”Up” option or a “Put”/”Down” option. This means that an investor are long or alternatively short on any financial item simply by buying a binary option. They are offered against a fixed expiry time period which could feel e.g. 5-30 hour in the future, an hour or so forward or at the close of each trading evening. Once digital options are purchased, they can’t be resold until expiry time is up.

Trading digital options is very popular among traders given that it is very simple and may generate high returns in short time. Different from classical trading exactly where each point has a certain advantages that is proportional to the level traded, in binary options you only have to predict the right movement for a select period of time. If you know the market will most likely choose up in the next 30 minutes, you buy a call option and you get 75% return in your investment. It doesn’t matter if the market moved only by 10 units or by 70 units, the profit is the exact same. This might be why they generate the highest profits of all sorts of trading.

A positive aspect of binary options trading is the fact that you can make very strong strategies and money management techniques, due to its binary character. You can make very precise calculations of your income according in order to the number of trades and the winning ratio. You possibly can stick to some specific values and make the steady profit.

Because of just how they work, you in theory need a 50% chance in order to predict the correct outcome whether or not you don’t make any kind of analysis. A simple uneducated guess will still have 50% winning chances (buying options without any information otherwise study will known as binary gaming). Now imagine how much money you can make if for example the study takes your winning fee to 70%!

So, how can you trade binary options? What is the best binary option broker.

How to Understand Binary (And Octal and Hexadecimal) Numbers

When you get into computing you may come across binary numbers (which are used internally by the computer) as well as hexadecimal or octal numbers. Here’s an explanation of how they work:

Base 10

In the familiar (base 10) system, each column of a number represents a number times a power of ten (units, tens, hundreds, thousands, etc.).

You should also notice that only the digits less than 10, that is to say from 0 to 9, are used in the base 10 system.

For example:

1234 = ( 1 * ( 10 ^ 3 ) ) + ( 2 * ( 10 ^ 2 ) ) + ( 3 * ( 10 ^ 1 ) ) + 4

1234 = ( 1 * 1000 ) + ( 2 * 100 ) + ( 3 * 10 ) + 4

Binary (Base 2)

In the binary numbering system (base 2) each column of numbers represents a number times a power of two (units, twos, fours, eights, etc.).

You should also note that only the digits less than 2, that is to say 0 and 1, are used in the binary system. Additionally, it is worth knowing that many binary numbers are written with preceding zeroes.

For example:

00001011 (binary) = ( 1 * ( 2 ^ 3 ) ) + ( 0 * ( 2 ^ 2 ) ) + ( 1 * ( 2 ^ 1 ) + 1

00001011 (binary) = ( 1 * 8 ) + ( 0 * 4 ) + ( 1 * 2 ) + 1

00001011 (binary) = 8 + 0 + 2 + 1

00001011 (binary) = 11 (decimal)

Octal (Base 8)

The octal numbering system (base 8) works on the same principle, except instead of powers of ten (or two), powers of eight are used (units, 8s, 64s, etc.). Only the digits less than 8, namely 0 to 7, are used in the octal numbering system.

Hexadecimal (Base 16)

The hexadecimal numbering system (base 16) also works on the same principles, except powers of sixteen are used (units, 16s, 256s, etc.). Digits are used in the range 0 to 15 (i.e. less than 16). Since we need a single character representation (a digit) for the numbers 10 to 15, letters are used as digits for values of 10 to 15 (10 is A, 11 is B, 12 is C, 13 is D, 14 is E, 15 is F).

Quick Conversion Table

You can use this table to translate between bases:

0 (base 10) = 0000 (binary) = 0 (octal) = 0 (hexadecimal)

1 (base 10) = 0001 (binary) = 1 (octal) = 1 (hexadecimal)

2 (base 10) = 0010 (binary) = 2 (octal) = 2 (hexadecimal)

3 (base 10) = 0011 (binary) = 3 (octal) = 3 (hexadecimal)

4 (base 10) = 0100 (binary) = 4 (octal) = 4 (hexadecimal)

5 (base 10) = 0101 (binary) = 5 (octal) = 5 (hexadecimal)

6 (base 10) = 0110 (binary) = 6 (octal) = 6 (hexadecimal)

7 (base 10) = 0111 (binary) = 7 (octal) = 7 (hexadecimal)

8 (base 10) = 1000 (binary) = 10 (octal) = 8 (hexadecimal)

9 (base 10) = 1001 (binary) = 11 (octal) = 9 (hexadecimal)

10 (base 10) = 1010 (binary) = 12 (octal) = A (hexadecimal)

11 (base 10) = 1011 (binary) = 13 (octal) = B (hexadecimal)

12 (base 10) = 1100 (binary) = 14 (octal) = C (hexadecimal)

13 (base 10) = 1101 (binary) = 15 (octal) = D (hexadecimal)

14 (base 10) = 1110 (binary) = 16 (octal) = E (hexadecimal)

15 (base 10) = 1111 (binary) = 17 (octal) = F (hexadecimal)

Computer programmers often use octal and hexadecimal as a short hand for binary because each digit in hexadecimal corresponds to 4 binary digits, and each digit in octal corresponds to 3 binary digits.

For example:

0101 1111 (binary) = 5F (hexadecimal) = ( 5 * 16 ) + 15 = 95 (base 10)

or

0101 1111 (binary) = [0]01 011 111 (binary) = 137 (octal) = ( 1 * 64 ) + ( 3 * 8 ) + 7 = 95 (base 10)

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