Trading Articles

Here's the Pro's & Con's of Binary Options!

If you have decided to trade in binary options, you should learn about the advantages as well as disadvantages to be faced in the long run. Given below are few of the pros and cons.

Pros of Trade Binary Option

• You can trade from anywhere in the world. All you need is a tablet or mobile phone.
• Get a quick pay off! You can have above 70% on your capital in a very short interval of time. This high payoff is a very attractive advantage of binary options trading.
• Binary options trading is very simple and easy. If a trader has experience in the stock market or forex market, he will not hesitate to move to binary options. Its simplicity makes it fascinating.
• You will have a wide range of companies. You may choose from them to trade.
• You don’t need a huge capital for trading in binary options. You may start from what you have in your account, and trade in a vast market. This is a good reason for the popularity of binary options among traders.
• There are no fees or commissions. The spreads that are contained within the payoff/rebate structure bear all the costs.
• Another advantage is that brokers are offering advanced features for traders who have the most experience. As your experience grows in the trade, there come more chances for you to make success in the field.

Learn to Trade Volatile Assets!

In the first part of the tutorial, an indicator that can help gain profit returns by trading high volatility stocks will be reviewed.

Keltner Channels:

This indicator adds three bands on the stock chart in the upper, lower and middle portions surrounding the price action. This indicator provides best results in a very trending market, either when the price is experiencing higher highs and higher lows during an uptrend, or when the price is making lower highs and lower lows when following a downtrend.

Which Direction Will You Go?

There are no better tools to trade the market direction than binary options regardless of its upward and downward movement. Whether you are trading as a seller or a buyer, you will never get more than the amount you paid for the binaries. The cost for the buyer is the trade price of the binary options, whereas, the cost to the seller is the difference between the contract value (i.e. 100 dollars) and the price.

The binary options contract always closes at the zero value or the 100 value at the time of expiry, but only one binary party earns the potential profits. Because there is a cap of 100 dollars assigned to binary options, it has become easier to quantify and match the risk, returns and ROI choices made by the traders at different exercise prices and durations of the binary options that are primarily based on the underlying market.

What's the Best Strategy for You?

In order to fully benefit from binary options, you need to understand many strategies. Depending upon your preferences, following two types of strategies may be most suitable for you:

1. Strangle strategies
2. Straddle strategies

Strangle strategies:

Strangle strategies can be viewed as a hedging strategy where the trader tries to balance his losses with the winnings. It is useful when the trader is unsure in which direction the asset price will move. The two well-known types of strangle strategies are:

Learn How to Trade Minor Pairs!

There is an astonishing trend among FOREX trading gurus to only focus on major currency pairs when providing training to new traders. If you read online tutorials and follow blogs of renowned FOREX traders, you will find that almost all strategies are designed around major currency pairs and at the end, it is usually remarked they will also be applicable on all other FOREX pairs. Are minor currency pairs really that insignificant to totally ignore them? Let us review the options.

The Number Game:

New traders are encouraged to trade more on EUR/USD, GBP/USD, USD/CHF and USD/CAD.

With The MACD Strategy, You Can't Lose!

If your trading strategy is based upon trend following, then Moving Averages Convergence and Divergence (MACD) is the best tool to analyze market price momentum. Many trading gurus have derived various advanced techniques to efficiently utilize the powers of MACD to increase profit returns. In this article, you will learn how trading decisions can be optimized by depending less on base indicator signals, and using more of MACD signals for alternate trading ideas.

Using MACD Crossovers:

When traders are introduced to MACD, one of the first method they become familiar with is to utilize crossovers as the main source of trading signals. When the market is under bullish influence, a trading signal is generated when MACD crosses the signal line.

What Elements Affect Volatility?

The elements that are used to determine the options pricing of binary options are the same as typical options. These elements include time frame, volatility, exercise price and the underlying security. All of these elements carry great importance as they affect the pricing of the options. However, in order to understand how volatility is traded using binary options, let’s look at how the traders can take advantage of the short term opportunity associated with trading volatility using binaries. Binary options pricing is basically defined with the mutual understanding of the market, according to which there will be a certain result during a fixed period of time. For example, the market expects that the underlying asset will be above 1250 at 1400 EST the next day.

The pricing of binary options will approximately be 50 if its exercise price is at or near the market price of the underlying asset. As you already know, the value of the binary at the time of expiry is 100 dollars per contract, so in this case, the buyer and seller of the binary contracts do not get any benefit from it instantly as its half of the actual worth of the contract.

How Are Quarterly Closures Related to Binary Options?

Many traders in the binary options market want to know what quarterly closures are and how they are related to binary options. You should know that quarterly disclosures and binary options are closely related to each other. You can get a chance to earn profits by trading binary options if you learn the basics of quarterly closures.

A large number of companies that are quoted on the indexes market use a tool known as the business quarter technique to report the incomes, benefits and destinations in the same way as governments report the spendings of their countries by spreading their GDP on quarterly basis. This technique makes it easier for the traders to identify the important events on the business date-book of these companies.

What's the Forex Fix?

Traders use a couple of corridors in order to affect the forex ‘fix’. They may set it artificially and finally rig it. Given below are a couple of points that can give you an idea of the rigging.

• Collusion is the result of sharing proprietary information. It is done on the basis of client’s pending orders that a trader receives before the 4 pm ‘fix’.  Information is allegedly shared through electronic chat rooms by exchanging instant messages. These electronic chat rooms are named such as ‘The Cartel’, ‘One Team, One Dream’ and ‘The Bandits Club’. But these rooms are only accessible to a few traders who play an active part in the forex market. Membership for these rooms is highly sought-after.
• The ‘fix’ window refers to currency’s volatile sale and purchase that is executed in the 60-second ‘fix’ window. Traders pile up clients’ orders during the period leading to 4 pm and make a frequent sale and purchase in the 60-second window.

How the rigging is executed:

Let’s suppose that a trader, who works at the London branch of a big bank, receives an order at 3:45 pm. The order is placed by a U.S. multinational company. The company needs to sell its one billion euros and buy dollars in exchange at the 4 pm fix. The exchange rate is EUR 1= USD 1.4000 at 3:45 pm.

When's the Best Time to Trade Twitter Options?

The major question in every trader’s mind regarding Twitter options is to figure out the most suitable time to buy it, because it is very difficult to anticipate its movement in a short period of time during which they are traded in the binary options market. This is the reason why traders find it hard to predict the appropriate time in which they can trade call or put options. However, if they are able to resolve this issue and know when to trade Twitter options, they will be in a very good position to earn profits no matter how the stock market will perform. Some of the techniques that enable traders to trade effectively by recognizing the right time to trade the Twitter options are discussed below. These techniques can also be used for other stocks, currencies and commodities.