Beginners are able to learn binary options by going with the options carrying longer expiration dates using a demo account, as this will reduce their risk of losing.There are many types of binary options trading that can confuse newcomers in this field. Most brokers offer not only different assets but also different types of trading such as the ladder, floating pairs, and fixed pairs. In this article, we will try to explain main differences between them, as well as the basic trading principles.Binary options trading entails many different elements, the basis of this financial instrument is centered around the put or call options. Both of these are related to underlying asset price movement, with put being a prediction of price decline and call being a prediction of the price increase. In order to profit from each trade, the underlying asset price will need to be either above or below the strike price as predicted at the end of the expiry time period.Market conditions must be considered and then factored into the decision between put or call. Under bullish conditions, investors are generally feeling favorable towards assets, often causing values to rise. Bearish conditions are just the opposite, with investors typically selling off assets viewed as undesirable and thus causing values to decline. Binary options traders are able to profit from either condition, which is one of the many reasons as to why this form of trading has become extremely popular.In addition to being able to judge market conditions, technical analysis is also necessary. Studying past asset price performance may quickly provide the information needed to select between the put or call options. Strong price movement trends in either direction enable easier decision-making. Should not distinct trend be in place, the most recent price movement may be the deciding factor.Expiry time must also be factored in while performing technical analysis. When using shorter expiry times, the most recent price performance may be all that matters. However, when using longer expiry times, a broader picture of underlying asset price performance will be required. The main goal is to determine the highest and lowest prices that the asset has reached within a period of time. Though the asset price can move outside of these high and low boundaries, it is most likely to remain between them.Should the strike price of the underlying asset be close to either boundary, it can be assumed that the price will not move much higher or lower before reversing position. This is yet another element to consider, as binary options trading profits can be earned from selecting either put or call when an upcoming reversal is spotted in advance. Breakout points, which are times during which the underlying asset price breaks out of the noted boundaries, can be more difficult to predict, yet are equally profitable.What is most important is that the put or call option should never be selected by using only guesswork. There are plenty of binary options tools that can be used to study past asset price performance. The market news will often be the strongest indicator of current market conditions and should also be part of the decision-making process. When both of these forms of analysis are completed, the decision between put or call options should be an easy one to make. Use StockPair to trade binary options with advanced toolsLadder binary trading is a kind of binary options trading, where the trader receives several price levels, which are located at an equal distance from each other in the likeness of the ladder. Simply put, binary options ladder indicates the level to which the price of an asset should change for a certain period until the option is active.Lets imagine that USDJPY is trading at 99.75 and you want to use the ladder when trading binary options with your broker. You want to make a trade using a ladder with three price levels: 99.50, 101 and 101.40. How do you need to trade in order to make a profitWe can interpret this as follows. In order to make the first transaction successful, the USDJPY should be closed above 99.50 at 12.00. In this case, the trader will receive a 20 yield. For our second transaction, the currency pair should close above the 101 at 12.00. In this case, the trader will receive 35 yield. And in order to make a profit for the third transaction, USDJPY should be closed above 101.40 at 12.00. This will guarantee us a yield of 50.For ladder trading, the strategy based on Pivot levels suits the most. To use it, a trader needs to apply these levels on the chart with the desired currency pair using the Pivot calculator. Thereafter, three lines will be visible as a support (S1, S2 and S3) and as a resistance (R1, R2 and R3). The chart below shows these lines.To analyze how the price will behave during the day, the trader would be preferable to use a time frame H1. You can also build your ladder trading based on Pivot trading levels. As an alternative, you can try to install the ladder by 5 points above respective Pivot levels. In this case, you can be sure that your trading will be successful.After opening the transaction, the trader may at any time request the broker a price at which he is willing to buy back an option. Thus, in contrast to conventional binary options trading, the trader can close the deal before the official expiration date.Lets explain the advantages of this trading: first of all, it helps to minimize the risks. For example, someone predicted the rise in oil prices and still their prediction was justified. However, trader noticed that the market is changing and, most of all, by the time of option expires, their forecast will not be so true. In this case, the trader can sell the option back and get profit from it. Of course, this profit will be less than if one waited for the performance to see if forecast would be true, but it is undeniably better than losing 85 in the case of an incorrect prediction at expiry.Soon after opening the transaction, it can be seen that the performance gained its maximum value and perhaps soon the market will begin to decline. Trader asks for the price at which the broker is willing to buy back the option from them.
