Binary options, sometimes called digital or fixed return options, are a simple and increasingly popular way to trade the financial markets.
Each trade is based on your opinion of whether the price of an asset - such as a share or a commodity like gold - will close ABOVE or BELOW the "strike" or target price at some specified future point in time known as the "expiration time".
In other words, with binary options trading, all you have to do is predict the DIRECTION of the price movement of the underlying asset. You do NOT need to concern yourself with the its magnitude.
If your prediction is correct, you earn a fixed pre-determined payout for that particular asset, and you are said to end up "in-the-money". You can in fact generate a profit of anywhere between 65% and 85% of the amount that you invested on every winning trade.
If on the other hand your prediction is incorrect, then you will generally lose ALL of the amount that you invested, though in some cases a broker will pay you back a minimal proportion of your 'stake' - say 5% for example - to keep you sweet and encourage you to keep on investing. If you do lose, you are said to end up "out-of-the-money".
The law of averages will tell you that, over a long period of time, you would expect to be correct (and incorrect) about 50% of the time.
And, if you are, then the way that binary options payouts are structured will ensure that you make a loss overall - unlike the brokers, who will end up in profit even if they are correct only 50% of the time.
So you don't need to be a genius to figure out that, to make a financial success of binary options trading, your predictions need to be correct far more often than not.
Now we have to tell you that the only way you can achieve that end is by making use of a reliable 'Binary Options Signals Service' - one with a proven track record of success - one that delivers winning predictions at least 70-75%, and preferably 80%, of the time.
Beware of Signalling Services Offered by Brokers
Just a friendly word of warning here. Do NOT be tempted to use signalling services offered by your broker. These are often provided free of charge - but they cannot be trusted to have your best interests at heart !
The point is that when you place a binary options trade, you are effectively having a bet with the broker. If you win then the broker loses, and conversely if you lose then the broker wins.
In other words, the broker has a vested interest in seeing you lose - so why on earth would he want to help you by giving you signals that help you to win ?
Third Party Binary Options Signalling Services
The truth is that you need to be using a third-party Binary Options Signals Service and it needs to be a good one - one with a proven record of success over time.
So now you hit another problem !
How on earth do you choose a binary options signals service from the many hundreds that exist ?
Well, the obvious answer is that you need to do a lot of painstaking research to "sort out the wheat from the chaff".
You need to find signals services with a proven record of success - the ones that can demonstrate a success rate of somewhere between 70% and 80% over time.
Then select a handful and test them with demo accounts over their respective trial periods and decide which ones work best for you.
Alternatively, you might wish to save yourself a lot of time and donkey work (spent on researching things yourself) by testing one or more of the binary options signalling services that we reckon to give good value for money.
Here then are our recommendations:
1) Quantum Binary Signals
Quantum Binary Signals is a leading signals provider for binary options with trading alerts coming from real ex-hedge fund traders with more than 20 years of experience.
The service claims a 75-85% monthly success rate. We ourselves have managed to achieve a monthly success rate consistently in excess of 70% during the period that we have been using it.
However, there was a change of policy during the Summer of 2014 which led to Quantum Binary Signals offering fewer but supposedly lower risk signals. We did notice a quite significant improvement in our own success rate which has ranged from 73% to 79% each month since then.
The service currently provides about 25 trading alerts each month. These are sent to your mobile (via SMS) and to your email address. Expiry times vary from 10 minutes up to an hour - which is good because most brokers offer expiry times in this range.
2) Binary Options Trading Signals Live! by Franco
This signals service is totally different from all the others insofar as it allows you to watch and learn from professionals trading LIVE in real time.
As you watch, you get live binary options trading signals on your screen, in the form of an arrow pointing upwards for "call" or "buy", and downwards for "put" or "sell".
You also get to hear live audio so you can listen to what the pros have to say as they go about their business, and as they analyse the current market conditions to determine whether or not it is a good day for trading.
The Binary Options Trading Signals Live! trading room is open for 2 hours every weekday, during which time many signals are generated on the master trader's screen. Some of these signals are classed as weak, some as strong, and some as extremely strong - and you get to know which is which because Franco tells you. It is for you to decide how many of these signals you will use to make a trade.
Because of the large number of alerts generated during each daily session, it is not a practicable proposition to keep track of their performance, or quote a periodic success rate, in the way that other binary signals services do.
However, Franco does claim that on average 85% of his trading weeks are winning weeks. We ourselves have traded this system almost every day for the last 6 months and have only suffered 15 losing days.
Until recently, there was NO trial period on offer for the Binary Options Trading Signals Live! service.
However, Franco will now allow you to try it out for FREE on a Monday. Just click here and follow the instructions on the next page if you would like to give it a go.
One last thing: Binary Options Trading Signals Live! claims to be the world's largest, most profitable and longest running binary options trading service with more than 5,000 members. You can get to see real results achieved by some of those active members, and watch part of a live session, when you visit their website. And you can do that simply by clicking here.
3) Binary Options Pro Signals
The Binary Options Pro Signals service sends trade alerts in real time as they occur during market hours. The signals can be sent both by email and by SMS text message.
The SMS messages are an important feature because it means that you can place the trade as soon as you receive the signal - something that you need to do no matter which signal service you are using.
The Binary Options Pro Signals trade alerts are currently based on the monitoring of 14 carefully selected assets and are very clear and simple to read.
You can choose from U.S. or European trading sessions or both. And you can expect to receive somewhere between 6 and 12 signals per day.
When it comes to performance, we have to say that we have always found the Binary Options Pro Signals team to be open and honest about the success rate of the service that they offer. They went through a bad patch back in 2014 when the success rate dropped to around 65% - but things seem to have improved of late.
They are currently advertising an average success rate of 72.5% which makes the BOPS trade alert service well worth testing out as one of your options - especially when you can get a full 14-day trial for just 14 dollars.
If you would like to take advantage of this trial offer, all you have to do is click here to reach the Binary Options Pro Signals website, and then follow the instructions that you find there.
Whichever course of action you choose, make sure that you choose a broker/trading platform that will allow you to practice on a demo account BEFORE you start trading for real and once you do start trading for real NEVER EVER risk more money than you can afford to lose.
After all, your binary options adventure needs to be FUN - don't let it turn into a NIGHTMARE !!!
Important Message for U.S. Traders
Are USA Residents Allowed to Trade Binary Options ?
There seems to be a lot of confusion these days regarding the legality of binary options trading in the USA.
The simple truth of the matter is that USA traders CAN if they wish register with brokers for the purpose of trading binary options; and there are many binary options brokers - most of them based in the European Union - that WILL accept traders from the USA.
However, if you ARE a United States citizen, you need to know that offshore brokers who are NOT regulated in the USA are NOT allowed to offer binary options to retail customers in the USA.
For example, the CFTC (Commodity Futures Trading Commission) have made it quite clear that it is against the law to solicit United States citizens to buy and sell commodity options, unless they are listed for trading and traded on a CFTC-registered exchange, or unless they are legally exempt from registration.
Both the CFTC and the SEC (Securities and Exchange Commission) have placed detailed warnings on their respective websites to dissuade United States citizens from engaging in off-exchange binary options trading.
And they recently issued (June 2013) a joint bulletin which discusses in detail the potential risks of investing in binary options, and warns investors that they may not have the full safeguards of the federal securities and commodities laws - laws that have been put in place to protect U.S. investors - if they purchase unregistered binary options that are NOT subject to the oversight of United States regulators.
If you ARE a resident of the USA, and you wish to trade binary options, your best course of action is to use a regulated U.S. exchange, such as Nadex, which is legally permitted to accept U.S. residents as members.
Nadex is based in the USA, is subject to regulatory oversight by the CFTC, and is registered as an Exchange (Designated Contract Market) and a Clearinghouse (Derivatives Clearing Organisation).
We trust that you have found this information to be helpful.