What are binary options
Binary options entail financial options that have one or two payoff options: either a fixed amount or no amount at all. That points to why they are called binary options since there are no other settlement options available.
The aspect behind binary trading is a yes or no proposition where traders trade based on whether they believe the answer is yes or no. That makes it part of the simplest assets to trade with the simplicity attracting many traders and newcomers to the financial markets. Although the trading option is straightforward, traders ought to understand how the binary options operate, their advantages and disadvantages, and the legally authorized companies eligible to provide binary options.
There are many binary trading options types, with the most common being the “Up/Down” trade. The one common factor about all the option types is that they have a binary result (Yes or No).
Binary Options Types:
- High/Low or Up/Down – it is the most basic binary option. You have to predict if an asset’s price will end up higher or lower than the current price at the expiry time.
- In/Out Range, or Boundary – the option sets a minimum and a maximum figure where the trader predicts if the price will finish within or outside the boundaries set.
- Touch/No Touch – the option sets levels higher or lower than the current price where the trader predicts if the actual cost will “touch” the levels set within the trade time. However, with the touch option, the trade can close before the expiry time. If the price level is touched before expiry, the option will immediately payout without considering whether the price leaves the touch level afterward.
- Ladder – the option behaves like an Up/Down trade, but the ladder has preset price levels other than using the current strike price.
Trading binary options in Kenya
Kenya has been a late starter for binary trading options, although it is slowly peaking as people with sufficient disposable income invest in the trade. It is legal to trade binary options in Kenya, but one must be careful in deciding which broker is safe and suitable to trade with.
Kenya lacks locally-based binary options broker implying that traders have to work with offshore brokers. Finding a trading option is not easy, especially as a Kenyan, but we’ve got you covered in that. The list below entails the best binary trading sites that would allow you as a Kenyan trader to trade binary options:
1. Pocket Option
It is the best site for binary trading which offers many excellent features to add to the future and existing traders. The account types in the site work for traders in all levels; newbie, beginner, experienced, master, and others. It is easy to use with proof of that by the positive feedback online.
2. IQ option
It is the leading online broker that offers binary options, forex trading, and cryptocurrency. IQ has various instruments and bespoke trading platforms to provide clients access to online trading and financial markets. It is the best trading option to use as you are provided with a free demo account and support in different languages for quick resolution of complaints.
3. Expert Option
Expert Option recently entered the fixed time trades market, which enables them to provide what traders need. They provide a demo account for newbies and novices to learn the basics of trading without risk before they start. They offer a wide range of account types to suit people of different income levels and those who want to learn the trade without parting with high amounts slowly.
4. Olymp Trade
The site provides a seamless platform with excellent competitive rates of returns. They are massive players in the fixed time trading marketplace with minimum deposits of $10 and $1 trades allowing anyone who wants to trade the privilege of doing so. It is also the best mobile app to use.
How to Make Money with Binary Options Trading in Kenya
In binary trading, investors are allowed to predict whether the price of an asset will rise or fall in the future; a case in point is Bitcoin price, the price of gold, and the stock price of Google. The period to make that prediction can be as little as 60 seconds; thus, it is possible to trade many times in a day across any global market.
Before placing a trade, you need to understand how much you stand to gain if the prediction turns out to be correct. Understanding that makes trading decisions and risk management simpler.
How to trade Binary Options
Below is a guide to placing a binary trade:
1. Select a Broker. Select a broker from the list discussed above using feedbacks and reviews from their site to select the best trading site to suit you.
2. Select the market or asset to trade. There are huge asset lists available that cover cryptocurrency, stocks, indices, and commodities. Examples could be the apple stock price.
3. Set the expiry time. Options can expire between 30 seconds to one year.
4. Set the trade size. Remember, the whole sum of your investment is at risk, so carefully consider the trade amount.
5. Click sell, call, or put or buy. Will the asset value fall or rise? Brokers label the buttons differently according to their preferences.
6. Check to confirm the trade. With many brokers, you will be allowed to check the details and make any required adjustments before confirming the trade. If all the details are satisfactory according to you, confirm the trade and wait for the outcome.
Using bots to trade binary options
The use of binary options robots – ‘bots’- and other automated trading applications and software has started in the past few years.
How auto-trading robots work
Auto trading algorithms and robot software combine automated trading with signal service. The software attempts to identify profitable trades and places them automatically. The automated element takes signal services forward and places the trades rather than leaving the task to the trader. The systems have different levels of risk management, from daily fixed spend limits to stop losses. The automated element overall, however, does not raise the financial risk for traders.
Top bots and auto traders in Kenya
- BinBotPro- provides automated trading in three steps.
- AutomatedBinary- provides options for money management and algorithms with a free demo account.
- Binary.com- provides tools for building robots with a wide range of features.
- OptionRobot- it’s free to join option offering flexible settings like indicators, methods, and expiry.
How to Avoid Binary Options Scams in Kenya
People are afraid of trading binary options in Kenya due to many fraudulent operations in the business. They thus fear getting into the industry due to the concern about falling into scams themselves.
The following points will assist you to avoid being scammed when it comes to binary trading:
- Check for client review and feedback online. Many public forums and websites gather reviews of different online binary options brokers with many topics allowing clients to share good or bad experiences. Doing in-depth research about brokers puts you able to make an unbiased opinion about brokers and the service quality.
- Take caution on withdrawal details. A significant problem faced with scam brokers is the inability to make a smooth withdrawal of your profits. Mainly, clients realize they have become victims of scams during a trial of their first withdrawal where the brokers stop replying to your inquiries. Ensure you understand the site’s withdrawal method and get information about it through other clients’ feedback.
- Monitor alerts from financial regulators. The most respected financial regulators release binary options broker’s blacklists to highlight the brokers you should avoid from time to time. The lists indicate unauthorized brokers to provide financial services and those who have attracted complaints from many clients.
- Changing terms and conditions. Fraudulent brokers modify their rates and commissions without notifying clients about their intention. It is the most challenging fraud to spot as it requires constant observation of underlying assets and binary options types. To avoid this type of fraud, compare different major brokers for some time before placing your money anywhere. You can also demo accounts for brokers that provide that service, as it is a great tool to understand brokers’ details before making an opinion about them.
To avoid landing into a scam, only open trading accounts with regulated brokers (FCA agreement) with a long track record of client satisfaction. Since client feedback in broker’s sites can be forged, check feedback about sites from public forums where the information is trustworthy.