There are five simple steps to trading binary options. Step 1 , you need to have an opinion on what might happen to a particular market at a particular point in time. Step 2, choose an asset. You have a wide range to choose from: forex, stock indices or commodities. Step 3, select the exact price for your trade and time when you want your trade to settle. Step 4, select a direction. If you think the price will be higher at your chosen time, 'buy'. If you think it will be lower, 'sell'. Step 5, decide whether to wait for your trade to settle, or to close it beforehand. Traders can close early to lock in gains or prevent additional losses.