The investment volume sufficient to start trading
When trading binary options, it is possible to choose the amount of investment capital a trader is intended to place on a trade. Profits are calculated as a fraction of a trade’s value, so the bigger funds you place, the greater returns will be expected. For instance, if a dealer initiates a trade by placing £15 with a 70 percent return offered – in a case of the winning trading outcome, the trader’s payoff would be £25.50. At the same time, if the trader had placed £150 into the same position, the payout would have increased to £255. It should be pointed out that trades with failure outcomes lead to money losses. When we are talking about the trader from the first example, he/she would have only lost £15, whereas the predetermined loss would have been £150 in the second instance.
The direction to trade in
Before entering the market, traders should decide on the direction they intend to trade in. When dealing with how/low options, a market player has to make a prediction whether the asset’s value will increase or fall within a set time frame. High/low options trading scenario can be used to stocks, currencies, financial indices and commodities of commerce.