Over time, binary options trading will become second nature. However, the first few weeks of trading may feel a bit challenging. Despite the simplicity of basic put or call option trading, novice traders may feel a bit overwhelmed when they discover that trading can entail more than just these two basic predictions. The best approach will include working with just the basic Above/Below trades until binary options trading becomes familiar. The following checklist can be used to ensure that nothing is missed.
#1 – Selection of the broker. This is necessary, as the binary options broker will provide the trading platform, tools, and of course handle the payment of profits. This may only need to be done once. However, some traders do ultimately decide to partner with more than one broker, while others may switch from one broker to another.
#2 – Selection of the asset class and underlying asset. This can be a matter of personal preference, but should include some research into how the underlying asset is performing. New traders are advised to select an underlying asset that is somewhat familiar. For many, this will be a stock option. However, feel free to choose a commodity, currency, or any of the indices.
#3 – Performance of analysis. Using the selected underlying asset, the next step will be to look at the historical data and market news that is associated with it. This information will not only point to the prediction that is most likely to be correct, but will also help with the selection of the trade type, expiry time and investment amount. Analysis is also used in risk assessment, which should be factored in when deciding on the investment amount.
#4 – Selection of the expiry time. Depending on the broker, there may be several expiry times to choose from. Nearly instant gratification can come in the form of shorter expiry times. This are typically preferred by new binary options traders who are anxious to see the outcome of their predictions. Lengthier expiry times should not be overlooked, but are better left for trading once the analysis process has been completely mastered.
#5 – Investment amount decision. There should be some money management plan in place, and this should be factored into the investment amount decision. There is nothing wrong with only investing the minimum amount until binary options trading skills have been gained. Some brokers now allow traders to invest as little as $1 on each trade. Though it will be difficult to amass profits quickly using such a low amount, initially, the learning process is more important.
This binary options checklist includes the basics for new traders. At some point elements such as strategies and signals may also be factored in. Never before have traders had access to so many tools and educational materials. There is simply no reason as to why anyone cannot profit from trading so long as the correct approach is taken and the tools provided are used to make accurate predictions.