Top 5 Binary Options Trading Tips for Beginners ¦ South Africa

Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Free Trading Education!
    Free Demo Account!
    Perfect for Beginners!

  • Binomo

    2 place in the ranking!

Top 5 Binary Trading Tips For New Traders

There are numerous new traders in South Africa eager to dig in and start their binary options trading journey.

After all, this can be a lucrative business venture and traders all over the world want to benefit from it. However, every beginning is hard, so every bit of help is welcomed.

In this guide, we will give top 5 binary trading tips for new traders so that they may have a flying start in trading binaries.

Tip no.1 – Don’t Limit Yourself

We understand that all new traders feel intimidated and unsure. This is normal. However, new South African traders should not limit themselves when it comes to trading binaries.

In fact, the beauty of binary options trading is in its diversity.

Starting from numerous binary brokers to a fantastic range of underlying assets and trade options, to helpful strategies and trading tools.

In fact, there are even several ways to trade binaries – manually, automated trading, semi-automatic or social trading which is becoming very popular in South Africa.

If newbie traders are afraid to start the standard, manual trading with one of the brokers they can go for fantastic solutions like Binary Options Robot.

This is a superb trading software run by an advanced algorithm which will scan the market conditions according to set preferences and deliver suggestions (trading signals) on the trades that stand a chance of being most successful.

Traders can then either accept or decline the trade.

On the whole, whichever options budding South African traders select first, it is worthwhile to get well-informed beforehand without limiting themselves to just one solution.

Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Free Trading Education!
    Free Demo Account!
    Perfect for Beginners!

  • Binomo

    2 place in the ranking!

Tip no.2 – Pick a Regulated Binary Broker

With more than 500 binary brokers available on the market today it can be a bit tricky to select the one which will tick all the boxes.

However, new traders in South Africa may speed up this process if they sort brokers by regulation. So, the second in our top 5 binary trading tips is to rather pick a regulated binary broker than a non-regulated one.

Regulated binary brokers show a level of commitment to both their registered traders and the running of business in general. Regulated binary brokers abide by the rules set forth by regulatory authorities.

On our site, we strive to provide South African traders with detailed reviews so this can be a great start as traders have a large amount of information all in one place.

Our reviews look into all important aspects of binary brokers – regulatory status, general information, platform info, account types, customer support and banking information.

That way traders save time and may get valuable information.

Regulated brokers like IQ Option, 24option, Daweda Exchange or AnyOption could prove to be a great starting point for binary options trading.

Tip no.3 – Selection of Trading Services and Underlying Assets

Binary brokers or binary robots which provide a selection of trading services and underlying assets which can be used in the trading process is a fantastic way to start.

Yes, novice traders in South Africa will not be able to use them all at once but slowly they will be able to get familiar with them and progress.

Some binary brokers like StockPair, IQ Option or AnyOption have their own proprietary platform.

That means they provide traders with custom-made trade options like Bubble trading with AnyOption or Kiko option with StockPair.

Other binary brokers opt to use popular trading software like TechFinancials, PandaTS or SpotOption.

At any rate, the more trade options and tools available the better as this can improve the trading process immensely.

The same goes for underlying assets since wisely spreading the investment across all four categories of commodities, stocks, currencies and indices is a good way to secure better profits.

Also, traders should always look for a broker which offers a demo account as well as mobile trading app.

The chances these trading tools and features provide make them worthy of mentioning in our top 5 binary trading tips for newbie traders in South Africa.

The Importance of Demo Account

Demo account is a powerful trading feature which can be useful to all binary options traders, especially to beginners. With the demo account, which is usually free, prospective South African traders get to experience binary options trading but in a risk-free environment.

Well, the funds are virtual but the experience is very much real and traders do not have to worry over possible loss of funds.

This way traders get to familiarise themselves with the trading platform, available trade options and underlying assets. This can be fantastic to gain not just the insight into the trading process but also become more secure in their trading skills.

Handy Mobile Trading Apps

And why is a mobile trading app so important?

Well, in this exceedingly fast day and age who has the time to sit behind the computer all day and monitor the market, carry out trades and learn as much as possible along the way.

In using the mobile trading app, South African traders can do all that on the go, save valuable time and profit.

Tip no.4 – Use Early Exit Option in Binary Trading

Market fluctuations are part of any financial trading, binary options included.

However, there is a remedy for that as well and it’s called early exit.

This can be a powerful tool which is why we have included it in our top 5 binary trading tips for new traders.

The majority of binary brokers have this option yet many traders fail to use it. Instead, they wait for the options to expire.

New South African traders can use this option if the price of the underlying asset they selected is not going in the desired direction which can save their trade.

Tip no.5 – Don’t Underestimate the Power of Edu Materials

Power is knowledge and new traders need the knowledge to make binary options trading profitable. That is why our fifth tip kindly points out not to underestimate the power of educational materials.

This is the 21st century so South African traders don’t have to sit in the dusty library to learn how to trade binary option.

The information is just a click away.

Binary brokers are very dedicated in this respect and there are entire sections dedicated to education. There, traders may find eBooks, webinars, guided video tours, a variety of strategies even blogs are there to be used.

There are also fantastic sites dedicated to financial news like Investopedia, Financial Times or CNN Finance.

Acquiring trading skills is a process, it will not happen overnight but will a little bit of effort and invested time, the proof might as well soon be evident in the profits South Africans could make.

And that makes learning about binary options a worthy goal.

How to Trade Binary Options as a Beginner?

Binary trading requires basic knowledge, patience and common sense. In this article we guide South African traders through all the steps necessary to place a successful trade in binary options.

As always, we recommend trading only with regulated and trusted brokers such as IQ Option for added benefits such as a free demo account, $10 minimum deposit and only $1 minimum investment. For more brokers, see our broker page. Let’s get started.

What Are Binary Options?

Binary options are nothing else but a prediction of an asset’s price direction in a prespecified amount of time. The price doesn’t have to go too high or too low for traders to make a profit. All they need to do is predict whether the closing price will go higher or lower than the opening price as shown in the figure above.

If the price stays the same, then traders receive their investment back. If the trader predicts correctly, then the profit made can go up to 91% depending on the broker and the asset. On the other hand, if the prediction is wrong, then the trader loses the investment.

Example of a Binary Options Trade

Step 1: Register with a trusted binary broker

Registering with most binary brokers takes only few seconds. All you need to do is fill in the boxes with your email and a password. You also have the option to continue with your Facebook or Google account or simply fill in your personal details like name and surname.

Step 2: Practice with the free binary options demo account

Practice binary trading with a free demo account available to South Africans, before switching to a live account in order to get familiar with the binary trading platform. In this section there is a detailed explanation on how to place a successful trade with the legendary IQ Option platform. Once you feel ready you can switch to live binary trading which is done exactly in the same way as explained here.

Select Asset

To start with, traders need to select their asset from the drop-down menu as shown here. A large selection is available as always by IQ Option.

Set the investment amount

Then, set the investment amount as shown below by clicking on the amount box at the right-hand side of the trading platform. This can be as low as $1 so that novices can start trading with a low investment capital.

Set the expiry time for the binary option

Once the investment amount is set, traders need to select the expiration time. There are binary options available from 60 seconds to the end of the month as shown below. You can even see that the profit percentage changes according to the expiration time. Longer expiration times will offer lower returns.

Once you choose the option’s expiration time then, you can place as many binary trades as you wish.

Choose the direction you expect for the price in the future (Higher or Lower)

This can be done by choosing the price direction, either by clicking on the higher button if you believe that the price will go higher than the opening price.

On the other hand, traders can click on the lower button if they believe that the closing price will be lower than the opening one as shown here.

Wait for the binary option to expire

Finally, you wait until the expiration time comes and if you have won then, the amount will be shown in a green box as shown in the picture below.

Step 3: Make a deposit and switch to live trading

Making a deposit even in South Africa is pretty simple and requires only few minutes of your precious time. Simply click on the green deposit button at the right top corner as shown above and follow the instructions. You are now ready to start trading.

Risk Warning: As always, we inform our readers that trading involves risk. Always invest funds that you afford to lose.

Top 5 Binary Options Strategies for Beginners

If you are new to binary options trading, it may be wise to research what are the best binary options strategies available to you.

While there are several strategies available, not all of them are suitable for beginners in South Africa and not all of them will help you to achieve your investment objectives.

So it is always a great idea to take the time to research the different strategies to ascertain which ones are more likely to be appropriate for someone who is new to binary options trading.

List of 5 of binary options strategies for beginners include the Trend strategy, the Pinocchio strategy, the Straddle strategy, Fundamental analysis and the Hedging strategy.

The Aim of Binary Options Trading in South Africa

With binary trading in South Africa, the aim is to make an educated guess about the price that you think a certain asset or asset-pair will reach within a specific time period. As the word “binary” implies, with this type of investment, there are only two possible outcomes – gain or loss.

In other words, either you will gain everything or you will lose everything based on what you had predicted about the price of that particular asset or asset-pair. The two types of binary options are call options or put options.

A call option gives you the option of buying an asset at an agreed price on or before a certain date. A put option gives you the choice of selling an asset at a particular price (strike price) on or before a certain date (expiration date).

If you believe that the price of the underlying asset is going to go up within a certain time frame, then you would invest in a call option. By so doing, you would make a profit when the price goes up because you would be able to sell that asset at a higher price than you bought it for.

On the other hand, if you believe that the price of the underlying asset will fall within a certain time frame, then you would purchase a put option which gives you the right to sell that asset at an agreed price within a given time period. Now let’s briefly discuss some of the top binary options trading strategies for beginners.

The Trend Strategy – South Africa

As the name implies, the Trend strategy is based on price trends. Over time, investors will notice that there are certain patterns in how the price of an asset moves.

For example, you may note that in certain circumstances, there is a downward trend, in other circumstances the price may remain relatively stable, and in other circumstances, there may be an upward trend in price. The aim is to study the trend and to make your trade based on the change in direction of the moving average price of the underlying asset.

You look at the moving average of the price of the asset over a certain period of time and make your trade when you notice a change in the direction of the moving average, ensuring that the trade is for the opposite direction.

The Pinocchio Strategy – South Africa

This strategy is a simple one and is used whenever the investor expects the price of the underlying asset to increase or decrease drastically in the opposite direction.

If the price is expected to increase drastically then a call option should be purchased, and if the price is expected to decrease drastically, a put option should be purchased. In the candle bar diagram, the wicks are usually very long indicating that the market may be lying (Pinocchio’s nose grew longer when he lied) so we should trade in the opposite direction.

The Straddle Strategy to Use as a South African Trader

This also falls in category of top 5 binary options strategies for beginners. Straddle strategy is most suitable during periods of high market volatility and is based on the expectation that breaking news or other important event will cause a sudden change in the price of an underlying stock.

In this case, both a call and a put option are placed on the same asset. Place one option first (call or put) and then when the price change occurs, place the other option (call or put).

The Fundamental Analysis Strategy – Trading in South Africa

Fundamental analysis involves looking at the smaller entity to gain insight into the probable performance of an underlying asset. This is especially applicable to binary options trading of underlying stocks.

The fundamental analysis basically involves the scrutiny of the organization’s financial performance in order to make an educated guess about the most likely direction that that asset will take under the prevailing market conditions. This method requires that the trader understands how to read and interpret financial statements.

So, this is suitable for beginner traders who have at least a basic understanding of how to analyse financial reports.

The Hedging Strategy for Traders Beginners

Hedging is a method of trading that helps to protect the trader from excessive losses. It involves setting up accounts that will offset any possible losses that the trader may make.

This strategy is perfect for beginners who want the benefits offered by binary options trading, but who cannot afford to rack up huge losses.

Conclusion – Top 5 Binary Options Strategies for Beginners

No matter how new you may be to binary options trading, it is possible to make gains and to minimize losses by choosing the right strategy.

Although there are several binary options trading strategies for beginners, some of the most appropriate strategies include the trending strategy, the Pinocchio strategy, the straddle strategy, the fundamental analysis strategy and the hedging strategy.

All these strategies, except the fundamental analysis strategy, involve the use of technical analysis as a means of trading. Although it is possible to make sizeable gains from binary options trading, it is wise to remember that all investments involve a level of risk. Therefore, it is best to conduct some amount of research before embarking upon binary options trading.

Binary options trading strategies for beginners should ideally begin with the establishment of a demo account. This will help new traders to acquire a feel and a good understanding of how binary options trading works, prior to investing actual cash.

Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Free Trading Education!
    Free Demo Account!
    Perfect for Beginners!

  • Binomo

    2 place in the ranking!

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