Binary option is a financial instrument that you can use to make huge profits in less than an hour. In recent months, we hear more and more about binary options trading and people who use this financial instrument report great profits; the main reasons for this are the simplicity of trading and the ability to earn 75% in less than 1 hour.

If you don’t know what binary options is, the name itself should tell you something about the meaning of binary options, like in binary code it uses only 2 digits “0” and “1” in binary options trading only has 2 options:

1. Prediction that the price of an underlying asset will rise: This is called a binary call option.

2. Prediction that the price of an underlying asset will go down: This is called a put binary option.

The fact that the trader has only 2 options “Call Option” or “Put Option” makes things much simpler, a trader does not have to predict which asset will give him the best profit or how much it will go up or down. what you have to predict is only the direction of the market price of assets, in other words, you have to predict whether the market price of a certain commodity, stock, index or currency will go up or down during the time between when you bought the option and its expiration time (at most asset traders you can choose between hourly expiration time and daily expiration time).

Another different thing that makes binary options such a popular financial instrument is the huge payoff, when trading binary options the profit you get on a successful prediction is 75% which is tremendously high compared to other ways. investment like Forex.

So as to the main question, how do you improve your chances of predicting whether the price of an asset will go up or down?

One of the most important rules in binary options trading is to choose the assent for your investment, the more you know about the asset, the more likely you can predict its direction, try to read some information about the asset before buying an option. Learning about the company’s background and industry will teach you a lot about what could happen in the next trading day or hour.

Another thing that might be helpful is to read the charts above, but you had to be careful because sometimes things change pretty fast, even a stock that’s down 5% in a day, it could go back up if there’s a reason for that and sometimes even for no particular reason.

One more important thing you can do is read financial news; Websites like “Yahoo Finance”, “CNN Money” and “Financial Times” can give you a good analysis of the market, this will help predict if the direction is up or down.

Another source of information can be binary options trading sites, on some sites like GlobalOption.com you can find daily tips that will help you with your prediction.