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Making A Living From Binary Options

Binary option, a new investment vehicle, provides you with a means to earn profits of 70% to 95% in about an hour. It has not been very long since people started making money through online binary options trading as it became available only by 2008. Trading in binary options is becoming increasingly popular among investors all over the world because of its simplicity and the unpredictability of the traditional financial markets as well as the economic downturn from which nations are yet to recover. Given this scenario, people have started wondering if they can make a living from binary options trading.

It is easy to trade binary options as all you need to do is to predict whether the price of an underlying asset will move up or down by the specified time. The underlying asset may belong to any of the asset class – currency, market index, commodity or stock. If your prediction turns out to be correct, you will receive the specified payout (return on investment or profit). On the other hand, if your prediction turns out to be wrong, you will lose your investment. However, some binary options brokers offer a payback (if your prediction becomes incorrect) and also provide you with risk management tools in order to help you to cut down your losses.

It is this simplicity of binary options that attracts people. You can know how much you can gain or lose even before placing a binary options trade. The fact is that you cannot lose more than the investment you make in a particular position. Moreover, many binary options brokers provide demo website and virtual money for you to practice and gain confidence. Once you are ready, you can deposit funds as low as $100 and start placing real trades on the broker’s trading platform. Depending on the income that you need to generate for making a living from binary options trading and your risk appetite, you can choose to trade in binary options offered by brokers with expiration periods of 60 seconds, one hour, one day and one week.

It is possible to make a living through binary options, but it is very important that you have a clear understanding of the rules within which you must operate and also develop a sense for identifying opportunities when they are presented to you. Over the last four years, investors have realized the potential of the binary options market and have started looking up to it as one more avenue which they can make use of to earn a living. However, you need to be disciplined, focused, ingenious and sufficiently informed about the various options available to you and when and how to use them. Here are some points that you must consider, if you are planning to make a living through binary options trading.

  • You will have to invest sufficient funds in binary options contracts in order to earn returns that can replace your current income. You may not have successful outcomes from all the trades that you carry out on the binary options platform. This means that you may experience some losses before you start earning profits. You should be able to support your current lifestyle even if you are not initially generating any returns from binary options. However, you must also remember that a few successful trades can wipe out the losses that you incur when trading binary options. Probably, you must keep your day time job and start trading in the evenings initially because binary markets are open 24 hours a day. Once you have developed the confidence, you may decide to leave your job and do it full time.
  • If you are planning for making a living from binary options, then it is of utmost importance that you set a daily earning target for yourself. Once you achieve your daily earnings target (even if it happens on the first trade of the day), you should stop trading for the day. If you can remain disciplined, you will not make heavy losses and lose all your earnings.
  • It is important to have a diversified portfolio in the case of binary options trading as recommended for any other market. This helps to spread your risk as well as earn profits from different segments. Diversification of investments also helps to absorb losses better without eroding your capital.
  • You should also learn the skills required to manage money properly if you want to make a living from binary options. Money management is all about paying off your bills on time and ensuring that enough liquid cash is left with for you to trade in the binary options market whenever you want.
  • You also need to ensure that there is a constant and continuous cash flow so that you can quickly raise the required capital to take advantage of an opportunity that comes your way. This is the reason why many brokers offer bonuses to clients. It helps to increase your liquidity as well as market activity. If you can create a proper schedule for deposits, withdrawals and bill payments, you will be in a better position to take advantage of the opportunities presented by binary markets.
  • For making a living from binary options trading, it is recommended that you choose a reliable and trusted binary options broker. You need to take into consideration a few factors to choose the best binary broker who will be able to help you achieve your financial goals. Some of the factors that you must consider are: the trading platform offered in terms of ease of use, payout provided for successful trades (at least 70%), payback offered if your prediction happens to be incorrect, trading as well as risk management tools provided, security, deposit and withdrawal policy and customer service.

Summarizing, it is possible for you to make a living by trading binary options, but you must be able to accommodate the financial risk involved and be disciplined so that you do not allow yourself to be guided by your emotions.

March 15, 2013: posted in Binary Options Education No Comments

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