Exciting and easy to learn, binary / digital options are among the many teasers that offer promises of great returns to traders. They are very easy when explained, but they can be risky as well. The thought of making up to 80% interest on your money can be exciting, but you should be able to understand the risk involved. 60 second binary options may seem very easy as you have just one minute to get in and out of the market. You do not have to go through the agony of waiting as it often happens with long term trading options.

Trading 60 second binary options is easy even to novices. You can know the maximum amount you would gain or lose before the market closures. All you have to do is to choose your option; it could be a commodity, a foreign exchange index or a stock index. You can CALL if you speculate that the price of the asset will increase or you PUT if you think the price will decrease. When you purchase a binary option, you state your price and you are told how much you will gain or lose depending on whether you are right or wrong with your speculation on price closing above or below the strike price.

One advantage of trading 60 second binary options is that you do not need a large amount of money to invest as is the case with other trading options. But it is important to note that there is no 50/50 lose or gain in this simple market strategy. You can gain or lose your investments up to 85-100%. Although the trade may seem simple, it requires skills and intelligence. It is not a trade for greedy people. The fact that you can make great money within a minute also means you should be able to make intelligent decisions within that short period of time.

It is important to choose your asset wisely. Understanding the factors affecting the price of an asset is very important. It is not time to gamble if you want to make money. There is a science in binary options and it works well with those who can use short-term charts without any difficulty like technical analysts and news traders. You may be inclined to believe that all the parameters of this form of trade are known before hand, but you might be in for surprises. That is why it is important to understand the factors that affect the price of a commodity or an option before you bet on it.

It is also important to understand that the law of benefits does not work for this kind of trade. You can lose many times in a row as you can win. Do not be carried away by the idea that you can correct your mistake on your next option. Every item in this market is independent of every other. If you are trading blindly, you may stand many chances of losing huge sums of money. You should be able to work with detailed charts, understand how to use short-term charts and how to execute fast. It takes skills and knowledge to become successful in a market trend that may seem too easy.

Source by Johnathan Pollis