The Beginners Guide To Trading Binary Options In Zimbabwe
There has been a sustained interest in trading binary options in Zimbabwe in recent years. This interest has also been the same with online forex trading in Zimbabwe.
Here we will help you understand what binary options are and how you can start trading binary options in Zimbabwe.
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Binary Options are also referred to as ‘digital options', ‘fixed return options and ‘all-or-nothing options'. A binary option is a prediction of which direction the price of the underlying asset (a stock, commodity, index or currency) will move by a specified expiration time.
With binary options, an investor doesn't purchase the asset – he is merely predicting the direction that the underlying asset moves. There are actually just two possible outcomes (binary means two). A fixed gain if the option expires “in the money”, or a fixed loss if the option expires “out of the money.”
The price of the asset is not important. The only thing that is matter is whether the prediction is correct or incorrect. The prices of these assets are in constant fluctuation and this makes binary options trading possible.
A binary options trade involves three steps:
Choose Asset & Expiration Time
First, you choose an asset and trade expiration time, this is the time you want the trade to end. It could be any time period between a minute and a week – usually, it is within the day. Some brokers even offer 5-second trades for some assets, what this means is that in 5 seconds you either win or lose a trade.
Choose Asset Direction
Second, you choose Call or Put. If you think the price will end up above the current price: click the buy/call/higher button. If you think the price will end up below the current price: click the sell/put/lower button. Different brokers name the trades differently but in essence, they all mean the same thing one broker calls it a Call option, another one calls it a Higher option.
Wait For The Outcome
Now that the trade is placed, you simply wait for the outcome. If the trade expires ‘in the money', you make a profit. If it expires ‘out of the money', you'll lose. In the money (ITM) means you made a correct prediction and out of the money (OTM) means you made a wrong prediction.
High Return on Investment Potential
Due to the higher risk nature of binary options, typically the returns on your investment are also higher. Average returns are typically between 70-94% depending on the broker and the underlying asset. This compares to a FOREX trader who would typically realize returns of approximately 10%.
To put it into context, say you risk $100 on a trade with a 90% pay-out and you get an ITM you will make a $90 profit anywhere from 5 seconds to a day depending on your time frame! Binary options offer greater reward in a shorter period of time to as compared regular investments like stocks.
Known Risk And Reward – Fixed Risk
You know right upfront exactly how much you are risking and exactly how much you will profit if you win the trade. There is no risk of leverage costing you more than the amount you risked on the trade. Only your chosen investment amount on any particular trade is at risk on that trade(in the example above, you will lose $100 if you get an OTM). You know exactly how much money you can lose and how much exactly you can make if you win.
Binaries are unlike forex. It does not matter how high or low a price goes as long as it closes in the money for you. A single pip in the money is as good as 50 pips in the money. You still get the same payout on the trade either way.
Low entry point
Trading binary options in Zimbabwe online can be done using minimal amounts of money. Some brokers like Deriv offer their trades starting from just 50 cents. This means that you can risk as much or as little as you can afford to. Initially, it’s wise to risk small amounts until you get to grips with it and only trade as much as you are willing or can afford to potentially lose.
Brokers have made trading binary options in Zimbabwe as simple as possible to speed up the process from your initial deposit to getting started. There are only a few steps that are involved including choosing the financial asset you want to trade, select the amount you want to trade and the direction in which you think the price will go.
Then select the expiry time and sit back and wait for your options to expire. A few clicks and you are done. If the outcome of the trade is in your favour then you typically stand to gain a high profit.
Wide Range of Internationally Traded Assets
Many financial assets can be traded all over the world daily. This means that no matter what your preferred asset is or where your knowledge in the financial markets lies you should have the ability to select it for your options.
Many binary options brokers offer different sets of assets that they allow you to trade so check each one carefully. Some brokers offer an extensive range of commodities, stocks, indices and currency pairs up to around 90 of them meaning you have your pick of assets to trade.Open A Free Deriv.com Account Here
Trade on Any Market Condition
With binary options, you can make money whether the price of an asset goes up or down as long as you end up with an ITM.
Trade Anywhere, Any Time
Binary options brokers have made their online trading platforms as accessible as possible with many of them not just offering the conventional web-based trading via your desktop or laptop but also through your mobile. This means that you can trade on the move and check your options regularly and conveniently. Some brokers have like Iq Option simulated markets that you can trade over the weekend when the financial and stock markets are closed.
Unlike with other trading instruments, there are usually no fees or commissions attached to binary options. Brokers make their money from the percentage discrepancy between what they pay out on winning trades and what they collect from losing trades.
Easy To Trade – Not Complicated Like Forex
Binary option trading platforms have begun to cater to investors who have little experience trading this style of assets. As such, websites have become incredibly user-friendly with features such as demo accounts, informative videos and live chat features to answer any questions you may have while trading.
You also only have to make a prediction correct out of two possible outcomes. You do not have to worry about stop losses, leverage and magnitude of price movement when binary trading.
Let’s explore the other differences and similarities between forex and binary options
In both forms of trading you aim to profit from price fluctuations, however, with binary options you know beforehand your potential profit. With forex, your profit is determined by the number of pips you capture.
The maximum loss in forex would be all the money on your trading account(if you do not have a stop loss in place), in binary options the maximum loss is the amount risked in that particular trade.
With forex, you can get out a trade anytime you want whether to lock in profits or to cut your losses. In binary trading with most brokers, you don’t have the option to sell a contract (getting out of a before your chosen expiry time). This means that with binary options a trade can be going your way and turn against you at the very last moment and there is nothing you can do about it.
In both types of trading, there is the use of fundamental and technical analysis tools in making forecasts. Forex trading is not limited by any time guidelines one can stay in the trade as long as they wish or as long as their trading balance would allow. Binary options, on the other hand, are based on timeframes.
This depends on the underlying asset you want to trade. If you are trading binary options using forex pairs then the best time to trade is when there is an overlap of the London & New York sessions. This is around 9 am to 12 pm Zimbabwean time. Profiting when trading binary options in Zimbabwe depends on volatility and the volatility will be at its highest during this time in the forex market.
Having said that, it's important to stress that you can trace them at any time successfully if you know how to read the charts to generate your own signals.
On the other hand, if you want to use synthetic indices from Deriv then you can trade them at any time because they have uniform volatility all the time. The simulated forex markets offered by Iq Option over the weekends also have uniform volatility.
To trade binary options in Zimbabwe you will need the following:
- choose a broker with favourable deposit and withdrawal methods
- register a demo account to test the platform & practice your strategy
- register a real account and deposit your funds
- trade real money and withdraw using convenient methods
Choosing a broker for binary options in Zimbabwe can be tricky just like choosing a broker for forex trading in Zimbabwe. Some brokers do not accept Zimbabweans due to sanctions. The other brokers that allow Zimbabweans to open accounts with them may not accept local payment methods like EcoCash for making deposits and withdrawals.
Thus, the balancing act at the outset when planning to trade binary options in Zimbabwe is to find a broker that accepts Zimbabweans and has convenient funding methods.
We have researched for you and we have found one reputable broker that satisfies both these requirements. That broker is Deriv and it has been in operation since 2000.
On top of offering trading in binary options in Zimbabwe, the broker also offers forex and cryptocurrency trading. It also has popular synthetic indices that you can trade as binary options 24/7.
You can also deposit to this broker via payment agents using methods like EcoCash, Zipit, Mukuru and even US$ cash. The broker also has a minimum deposit of only US$5 and you can trade with as little as 50 cents!
Another exciting quality of using Deriv as your broker is that it allows you to trade without verifying your account. This can be handy if you have difficulty acquiring proof of residence documents.
All these qualities make Deriv a truly all-in-one broker that is convenient and welcoming for Zimbabwean traders. You can start with a free $10 000 demo account to test out the platform and practice.Open A Free Deriv.com Account Here
You can also get step by step instructions on how to open a Deriv account here.
Other brokers accept Zimbabweans but they do not support the local payment methods. You can create free demo accounts with them just to see how their interfaces work. If you have access to other non-local deposit methods like AirTm, PerfectMoney, WebMoney or Bitcoin you can open your real accounts and trade with these brokers.
- There is a risk of overtrading
Binary options trades usually last for a short period of time and because of this, you may be tempted to overtrade and thus hurt your profits.
- Rushing to trade live funds
Binary options trading seems to be very simple because there are only two possible outcomes. This may mislead newbies to rush to trade live funds without getting proper knowledge first. This will almost certainly end badly as the newbies will be doing more gambling than trading.
- Smaller timeframes are hard to analyse
Smaller timeframes like one minute and thirty seconds are really hard to analyse and make a correct prediction.
- You lose 100% of your investment
When you make the wrong forecast in binary options trading you will lose all your stake or investment. This is different from forex or stock trading where you can cut your losses and recover some of your invested funds if the trade goes against you.
Strategy is one of the most important factors in successful binary options trading. It is the framework from which you base your trade decisions, including your money management rules, and how you go about making money from the market.
A good strategy for trading binary options in Zimbabwe will simplify much of the decision making about where and when to trade. With timing being the key to everything where trading is concerned, the less guesswork there is around entry and exit points, the better. Particularly for less-experienced traders.
A repeatable strategy will always highlight the trading opportunities, where otherwise, the majority of those openings would be missed. Strategies encourage discipline, aid money management and provide the clearest predictor for positive expectation. While traders can profit from binary options in Zimbabwe without a strategy, it will be exponentially harder.
We have a collection of free strategies that you can use for binary options and you can see them here.
Is it legal to trade binary options in Zimbabwe?
Yes, it is legal to trade binary options in Zimbabwe but you must use a regulated broker
How much do I need to trade binary options in Zimbabwe?
You can open your account for trading binary options in Zimbabwe for as little as US$5 depending on your broker. So, in essence, choosing the amount you want to start trading with depends on what you can afford and the risk you are willing to take. Remember you can lose all your invested funds in binary options.
However, the small the amount you invest in binary trading, the smaller the returns you will get when you win your trades.
How can I open an account for trading binary options in Zimbabwe?
You can visit Deriv and open a free demo account with $10 000 virtual funds.
Can I fund my account for trading binary options in Zimbabwe using EcoCash and other local payment methods?
Yes, you can. You can use a broker like Deriv that will allow you to move money into and out of your account using local payment methods like EcoCash, Zipit, Mukuru and cash.
Is binary options trading in Zimbabwe a scam?
No, binary options trading is not a scam. However, some people scam others in the name of binary trading. You can learn about such scams here.
What is the best time to trade binary options in Zimbabwe?
This depends on the underlying asset you are using to trade binary options. If you are using forex then you will get the best volatility during the overlap of the London and Asian sessions (around 9 am -12 pm). if you are using synthetic markets from Deriv then you can trade at any time since they have uniform volatility.
Binary options are one method that Zimbabweans can use to make money online from the comfort of your home. However, you will need to invest a lot of time into learning before you can get profitable.
There is also a risk of losing all your funds in binary trading so you should be aware of that.
If you have any questions or comments about binary options trading you can say them in the comments below and we will respond.Open A Free Deriv.com Account Here