Have you just made a conscious decision to make trading a part of your life? If the answer is yes, you probably have plenty of questions, and the most pressing is “How to trade?”. You are not the first one to wonder what a trader’s initial steps should be. In this article, we will provide you with a general idea of trading and, specifically, explain how to trade on IQ Option for beginners. Let’s get into this IQ Option review to see what the platform has to offer.
IQ Option Broker: what is it?
IQ Option is an online broker that offers different types of trading. Here you will find instruments like Binary options, Digital options, stocks, Forex, cryptocurrencies, ETFs, and indices. Each instrument has its advantages and any type of trader can find what suits them best.
A free replenishable demo balance of $10,000 is provided so that you could try out different strategies and decide on what works best for you. Traders often consider it a great day trade simulator to get some practice, test new tools and features and understand the platform better. For example, if you want to trade stocks, this demo account can become your free stock simulator to get a feel of the market.
Once you decide to move further, you can make a deposit to your Real account and start trading with your own funds, making real profits.
Many other features and offers are available to traders: tournaments, bonuses and promo codes, VIP accounts, educational videos, chats with fellow traders, and more.
Binary Options on IQ Option
Binary options are one of the most popular trading instruments on IQ Option for beginners. This instrument allows traders to trade with quick expirations of one, two, or three minutes, or set a longer expiration like end of the day, week, or month.
With binary options, you can make a prediction about the price direction: if you predict that the price will grow, you can click “Higher”. If you predict the price will fall, you can click “Lower”. At the end of the expiration time, the deal will close. If the prediction is correct, you will receive the profit to your trading balance. However, if the prediction turns out to be wrong, you will lose the investment amount.
The maximum payout on Binary options is up to 95%, depending on the asset and the trading conditions.
Digital Options on IQ Option
Another options instrument that is available on the platform is Digital options. Digital options function like binary options, but bring an extra concept to the table: the strike price. This instrument provides an exciting challenge: you can predict not just the direction of the price, but the exact level that it might hit. You can choose a strike that is very close (or equal) to the current price, or one that is much further away.
The further the strike price is from the current level, the higher the potential payout. Digital options can offer up to 900% profit, which makes them a popular instrument among traders.
CFD-type trading
There are many more available assets on IQ Option to choose from, but it is important to know how they work. Keep in mind that all Forex, stocks, and crypto trading on the IQ Option platform is carried out with Contracts For Difference (CFDs).
CFD trading means that when you open the deal, you do not actually acquire the asset, but rather invest in its price development. The payout you receive will depend on the prediction that you make. If your prediction is correct, you will receive your investment back plus a profit (the precise amount will depend on many factors). If your prediction turns out to be wrong, you will lose the investment amount.
CFD trading is a great option for traders with a limited budget, as it allows them to trade stocks and benefit from deals without having to purchase the often expensive shares.
Market Analysis Tools
Now that you know the types of instruments you can trade, it is time to learn about market analysis. The decision you make regarding the direction of the future price movement determines the outcome of your deal. Therefore, it is crucial to learn as much about the behavior of the asset you are about to trade as possible. Your task, as a trader, is to squeeze the most out of the information that you receive from the market.
Educate yourself by watching video tutorials (which can be found on the trading platform itself) and reading blog articles. You must understand how and what exactly you trade before you allocate real-life funds to a trade. What should you do to make a correct prediction when you trade with IQ Option for beginners? There are two major ways to analyze the market: technical and fundamental.
Fundamental analysis relies on market news and earnings reports. In other words, factors that cannot be directly spotted on the price chart. This analysis method is usually applied to long-term deals, but can also help predict volatility spikes — situations when the price grows or deteriorates rapidly. To assist with fundamentals, an economic calendar is available on the platform so you could always stay on top of the latest news.
Technical analysis, in its turn, relies on the recent price developments to predict the future. Technical analysis is performed with indicators that apply special calculations to the chart to help identify the trend, its direction, strength, volatility etc. You may use several indicators at the same time in order to see the full picture before you make your next deal. IQ Option offers over 100 indicators to choose from, as well as various graphical tools like the Fibonacci retracement, trend lines, and more.
Keep in mind that you can test all of these tools on the free $10000 day trade simulator that’s available for all IQ Option traders. You can use it at any point, even before making the first deposit.
Tournaments
When you have learned enough about the basics of trading, you can start competing with other traders in the IQ Option tournaments. Anyone* can participate in the tournament: simply choose one from the list and register. Tournaments are a fun and competitive way to improve your trading strategy, as well as attempt to earn some money.
So, how do tournaments work on IQ Option? After paying the registration fee, you will be provided with a tournament balance, which you can use to trade Binary or Digital options. The start balance is equal for all participants. Depending on the type of tournament it can be $100, $1,000, or $10,000.
The main goal of the competition is to increase the tournament balance as much as possible, making profitable deals. Those traders who finish at the top will become the winners and split the prize.
Note that your tournament balance is “dummy” money, which means that it doesn’t contribute to the prize pool. The prize pool is always stated at the beginning of the tournament, and it will be split among the winners according to the distribution guidelines.
*Note that the availability of tournaments is subject to the conditions the broker can offer at the moment.
Traderoom Customization
An IQ Option review for beginners would not be complete without a few words on customization. Changing the set up according to your personal needs is a powerful way to enhance your trading experience and results.
The IQ Option platform has many features that allow you to set it up according to your needs. You can change the appearance of the screen by choosing a light theme, increasing or decreasing the scale of the font and elements, opening up to 9 tabs at the same time, creating your own indicators and indicator templates, and much more.
Find out about all the ways to customize your IQ Option platform from our article: Use the Platform to the Fullest: How to Customize It According to Your Strategy.
Conclusion
There are many things to consider when starting to trade on IQ Option for beginners, however, do not feel pressured. This IQ Option review covers your first steps, which are all about learning and practising. So spend enough time on trying out different strategies, reading about instruments, and watching educational videos. Take advantage of the Practice balance — a free day trade simulator — and use it to test out any approach you like. Good luck!
