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Executing Your First Trade

You will learn about the following concepts

  • Choosing an asset
  • Determining the direction of the price
  • Potential trade outcomes

choosing-an-assetThe first trade is probably the most important one a trader will ever make. It is so, because you need to do it on your own, while ensuring that everything has been done correctly.

What you should note is that there are three main points you need to consider in order to make you first entry in the market. First, choosing your asset; second, determining the price direction; and third, calculating the potential outcomes of the trade.

Choosing an asset

The first step in trading binary options is deciding what kinds of assets you want to trade. Once you make up your mind, it is time to log in the platform you have chosen and select the exact type of asset you feel comfortable with. We recommend you to try an asset, which you are interested in. For example, if you are interested in sports manufacturing industry, then why don’t you try trading the Nike stock? Once you make this important decision, it is time to begin the analysis. Many people underestimate the power of research and analysis, but eventually everyone will draw the conclusion that it is probably the most important part of every successful trade. It will help you determine the future movement of the assets price and eventually generate a profit.

Determining the price direction

price-sizeIf you have been examining Nike’s price chart you will probably get an idea if there is a trend or not. Then you may begin doing some research and go through the financial news concerning Nike. There are thousands of different sources that can help you analyze Nike or whatever asset you have chosen. Those sources will also help you find reliable weekly market reviews or even advanced trading techniques.

You should use such tools because they will help you develop your trading skills and become a successful trader in the binary options market. So, if you believe the price is going to surge before the expiration, then you should execute a call option and vice versa – if you suppose that it will drop, then you need to execute a put option.

Potential trade outcomes

win-lose-drawRight after you have initiated your trade, you should wait for the expiry time and the outcome. As we have already discussed in some of the previous topics of this tutorial, there are two possible outcomes that can occur – “in-the-money” or “out-of-the-money”. In order to make everything clear, here is a brief example. If you have placed a trade in Nike stock at trigger price of 60$ and the current price rises above this trigger level before expiration, you will be in-the-money. Alternatively, if the price falls below 60$, then you will be “out-of-the-money”.