The Simplest Way To Trade The Currency Market Using Binary Options
It's no secret the forex market could be a awfully profitable place to be if you would like to earn cash by trading currencies.
However , it's also no secret that achieving consistency in the foreign exchange market needs a large amount of preparation ( you need education and trustworthy trading tools ) because not only you have to have an excellent idea of where the price is about to move, but also how far it is going to go.
as an example if you're trading the EUR / USD pair and you decide it is a good idea to go long, you would place a "buy" order, because you forecast the price of the Euro against the greenback to go up.
If you placed your trade using one mini lot ( this equals $1 profit for each pip ), and your target for that trade is thirty pips, you would need to have at least $1,000 in your account to meet margin needs and allow some room for drawdown, and if the trade is successful you will make $30 in profits.
However, in order for this to happen the cost of the EU Buck has to move thirty pips against the greenback, otherwise you will not reach the proposed target and realize the profits. As you can see, if you trade the foreign exchange market using the traditional approach you'll have not only to predict where the price is going, but also how far it is going, which simply makes it twice as hard.
Now, if you have $1,000 in a binary options trading account, what would you want in order to place a successful trade, and moreover, what sort of profits a successful trade would deliver for you?
In order to respond to this question, let us say that the cost of the EUR / USD is at 1.47849 and based a given research into the market ( e.g. Swing trading pattern recognition ) you think that the Euro Buck is trending up against the Dollar. You can see an example of a real case study of financial software for forex trading hitting a rolling stop-loss here.
In this example you would go long also but instead of placing a "buy" order for currency, you would simply buy a $100 call option for the EUR / greenbacks pair with an one hour expiration. If you're right and the price goes up, even if it is only 0.001 pip above the price you purchased your call option ( which is the strike price ), and it is still there or above till expiration, you would get as much as 75% return on your $100 investment.
In other words, a single $100 trade could deliver $75 in profits and you could repeat this process numerous times in the day.
But the outstanding thing here is that you did not need the price to go up thirty pips in 1 hour to get a 75% return on your investment, you only required 0.001 points of variation to achieve this.
In this scenario you certainly had to figure out in what direction the price was going to move ( this is usually an ingredient of the trading process ) BUT your outlook did not have to take you all the way to a thirty pips increase in the price for you to make get the anticipated return, because you got it with just 0.001 points of change, and you made $75 instead of $30.
Also, you can open a binary options account with only $100 and you can trade with as little as $30 with no commissions charges.
So as you can see, the potentiality of foreign exchange trading through binary options is great and the method is far faster therefore increasing your possibilities for moneymaking trades {, however ,} you should have a feeling of where the market is going. Provided that you have this, you are likely to make take far more winning trades than losing ones and a lot more money too.
If you're new to binary options you can read more currency trading tutorials here which will teach you how to exactingly find the direction in the price of any asset, currency or index, therefore enabling you to be profitable in your trading.
