The first thing you need to know about binary options is how to take a position and how to predict price movement. While trading Forex is all about currency pairs, in this case you need to learn a few things about the underlying assets as well, as these can include commodities, stocks or indices. Opening a position is very simple and even those who lack any previous experience will find it easy to buy or sell assets, but unless the option ends in the money, it is all in vain.

For beginners, the deluge of helpful information included in the binary options trading platforms will be of little help, because they won’t have the ability to process it. Charts are easier to read, but as more indicators are added into the mix, it becomes increasingly difficult. Signals will make up for this downside as they simply instruct you what position to open and recommend you to sell or buy the asset.

The prices are higher if the risks are considerable, and opening a position that has a potentially high payoff implies certain risks. A short position should be taken when you think that the underlying asset will lose its worth, because this means that you are selling, while a long position implies the buying of the same asset. For example, the trend is to open long positions for gold, as this crisis commodity is constantly on the rise.

If you are interested in buying precious metals, position trading will appeal to you, because you could hold it for several weeks or even months. Unlike day trading which focuses on short term binary options with the intention of scalping the market, position trading is better suited for those who think on the long run. You don’t need such a big bankroll to make it work and you have more time to do the research and all the reasons to invest the needed time in this process.

Among the main differences between day and position trading is that the first uses technical analysis exclusively, while the latter focuses on fundamental analysis. The most reputable traders confirm that if you want to succeed in this branch, you need to combine the two. For the beginners this can be a bit problematic, as they struggle to cope with the technical analysis and find it impossible to make the most of the fundamental one. Those who are not intimidated by research though, will rise up to the challenge and the benefits will be considerable.