Trading Scenarios
Trading Scenarios
March 5, 2012Trading Scenarios & Possible Outcomes
Below you will find a few possible scenarios and outcomes of trades made on binary options sites.
Before you do anything you will need to register and open an account at a binary options broker. We recommend looking at the grid located at the binaryoptionsreports homepage and select a broker according to your preference.
So a binary options scenario should play out like this:
Let’s make an initial assumption that you are a novice trader with no experience just starting out. Go to any one of the binary options sites out there and start probing around the demo accounts (no need to even register). You can immediately see that the most popular trades are on the EUR/USD (up or down) and then you have commodities like Oil or Gold which are also traded by a lot of online investors.
For starters you invest a small amount of money and start trading, let’s say about $200.you already did some practice trading so you know an entry signal when you see one. Highly recommended sources of intelligence gathering and financial analysis information are the various charts and indexes that can be found in sites the likes of yahoo finance or CNN Money. After that, simply pick the asset you want to invest in, lets say oil for example.
So you decided you want to deposit with Visa for example, you take out your card and deposit. You immediately get a bonus and some instructions on how to proceed. You go on to make a call trade because you anticipate that oil is going to go rise, because you believe that with the oil shortages and the possible war breaking out between the West and Iran (which happens to be the 3rd or 4th biggest oil-producing country), demand will soar. So you proceed to choose your time frame for expiration – this can be an hour, a day, a week or even a month.
You invest that $200 dollars and proceed according to the expiration time. When the trade time expires and your investment is “in the money” you collect according to what the sites advertise – meaning $162 (200*81%). Your profit can be up to 81% or your $200 investment just grew to become $362.
Now, this is a tip you want to hold on to. Before you deposit ask for an insurance bonus. Let’s say 20% – this will allow you to hedge your trading portfolio and put some of the risk back on the broker. So If the trade is “out of the money” you would end up losing your original investment, but if you have that 20% insurance or refund, you can get $20 back and increase your chances of getting some of your original investment back – even if it has a trading requirement on it. Trading requirement means you have to trade it an X number of times before you can cash it out.
Here’s another possible scenario. Let’s say you had your finger on the financial pulse of the indices and when the Exxon Valdez sank and created a huge oil spill, your instincts told you that their stock would take a beating.
For this scenario let’s pretend you are a seasoned trader with years of investing experience on your resume, and you already have a sizeable balance in your binary options trading account of $7,000.
So basically it’s a no brainer… It’s not a question of “if” it’s going to happen only when. And since things move pretty quickly in the digital age you anticipate that it’s going to occur immediately. So you choose an hourly expiration time and voila…
If your financial instincts are correct, you just made a very nice return because 81% means you just made $5,600 in one hour. If you know any jobs out there that pay that hourly rate please tell me – I’m making a career change.
However, if for some unknown reason the stock would remain unchanged you would be down 7K, however in these types of scenarios it really doesn’t happen.
This information should get you some kind of idea about how things work online and how to go about making the trades. So good luck and may the force be with you.
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