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May 9, 2016, 8:50 pm

Quick Guide to Understanding Binary Options

by: The Financial Blogger    Category: Investing Ideas

 

 

When I first read the words “binary options” I wasn’t sure what it meant. Even though I have a strong background in financial products, the industry keeps introducing new ways to invest. Some of them are complex and hard to understand (not to mention they could be very risky) and some others, like binary option trading are quite simple, yet unknown to the public. I’ve dug into this topic with the help of Banc De Binary to offer you a quick guide about this relatively new investment product.

 

What is binary option trading?

Binary options’ rose in popularity back in 2008 due to heavy market swings. In fact, this is a great vehicle to benefit from market volatility. It has gained in stature both among investors looking for a simple and profitable way to trade, and also among first-time traders hoping to better understand the markets and grow their assets. As opposed to other types of investments requiring you to do heavy research on various metrics, binary options simply require that you choose a market direction for a specific asset. Binary options trading is solely based on the direction the asset will take (up or down) and you can trade on both.

 

Here’s an example:

For example, assume you think company XYZ is doing well and you think the stock price will rise momentarily. On the binary options platform, you see the potential return is 85%. If you buy the option for $100 and the XYZ goes up, you will earn back your $100 plus $85. If the stock goes down, you lose your $100. If the stock is back at the same price at the option expiry, you get your $100 back.

 

How to successfully trade binary options

At first, this seems complicated as you must determine where the asset will go: up or down in a short manner of time (these options are usually traded and expire the same day). The idea here is more to “trade based on the events” of the day than thinking long term. For example, when there is a catastrophe happening (like the huge fire in Alberta, Canada since the beginning of May), you can think that Canadian insurance companies along with oil sands companies will be affected.

Finding this information is not always easy.This is why it is recommended to find a brokerage service providing you with a list of events each day telling you what is happening on the stock market and how it will affect various asset classes. After reading these, you can then login to your binary option platform and look at the potential return for each asset. The usual expected returns vary between 70% to 90% per trade. But don’t forget that if you are wrong, you lose 100% of your investment. This is why it is a good strategy for a part of your portfolio but definitely not for your entire nest egg.

How to trade binary options

There is an easy 4 step process to complete if you want to start trading:

  1. Select the asset you wish to trade.
  2. Select the expiry time for the trade.
  3. Enter the amount you wish to invest in the trade.
  4. Click ‘call’ if you believe the asset value will go up, or ‘put’ if you believe the asset value will go down.

 

As you can see, all type of investors, beginners to advanced can benefit from this new investment vehicle.

 

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April 26, 2016, 8:22 am

How to Know if Binary Options Are Right for You

by: The Financial Blogger    Category: Investing Ideas

If you’re like most people interested in investing, you’ve heard about binary options by now. While they’re still a very new investment vehicle, they have so many advantageous features that countless people all over the world have made them their number one choice. However, that doesn’t mean you should necessarily go putting your own money into them right away. Instead, consider the following about trading binaries before you start doing it yourself.

Do You Have the Time to Learn?

binary options, trading binaries, binary options trading

This needs to be the first question you ask yourself before you start trying to make money with binary options trading. While it’s true that one of the reasons binary options are so popular is because of how straightforward they are, they’ll still take time to learn so you’re a competent trader. You can’t just begin trading today because you have the money. Doing so is sure to end in losses and you’ll most likely become disillusioned with this opportunity.

No, you don’t need a lot of money to begin trading, but why waste it? Read up and educate yourself on binary options trading before you take the plunge.

Keep in mind, too, that you’ll most likely need to read up on a specific type of asset. Unless you already have a background in one you’ll be trading binary options in, you won’t be ready for this opportunity until you spend time learning about a particular asset to specialize in. Just pick one for now. Later, after you’ve had some success, you can decide to specialize in others too.

Can You Afford to Trade Binary Options?

Again, trading binaries is extremely affordable. However, you shouldn’t treat it like you’re playing cards or otherwise gambling for fun. People all over the world from all kinds of backgrounds have struck it rich because they dedicated themselves to binary options.

Still, just like how it will take time to learn the ropes, you’ll also need sufficient funds in the beginning too. Obviously, the longer you take to learn, the less you should have to worry that those funds will go to waste. What you don’t want, though, is for limited funds to force you into irrational decisions. Expect that you’ll accept some losses in the beginning, but that this is par for the course.

Also, make sure your finances are relatively sound at the moment. You’d hate to have to stop trading abruptly because you’re just about to take on a mortgage or new car payments.

You’ve Found a Quality Broker

Even if you have all the time and money in the world, you won’t succeed with binary options if you don’t have a good broker to facilitate your trades. What exactly a good broker is will depend on you and your unique needs.

As a beginner, though, you’ll definitely need someone who can help usher you into the world of binary options trading. Amongst other things, this will mean extremely user-friendly software—you really don’t need another challenge at the moment.

You should also look for a broker who can provide you with educational resources as well. This shows that they’re actively interested in your future as a trader, not just taking your money for short-term gains.

Don’t pick a broker simply because they offer great deals. A lot of them are scams anyway and, even if they’re not, none of them are worth putting your investments at risk.

Binary options could supply you with nice earnings on the side or eventually become your sole source of income. Before you begin trading binaries, though, you need to make sure you’re ready.

 

 

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April 8, 2016, 7:10 am

Forex Market Trends in 2016

by: The Financial Blogger    Category: Investing Ideas

Although there is no doubt that capitalising on the short-term movements within the Forex markets can generate sizeable profits, appreciating the long-term outlook is just as important. This is now more critical than ever before due to the interconnectivity of the world that we live in. While there can always be surprises around the next financial corner, it is still wise to take a look at some of the most predominant trends to expect during the remainder of 2016.

 

The Anchor of the Asian Marketplace?

 

Once thought to be the powerhouse of the modern world, the Asian markets have had an influence upon Forex trading for well over a decade. However, their strength seems to be waning. Many analysts feel that 2016 will a trying year for this region of the world. As regional economies continue to display rather dismal production data, confidence in both the yen and the renminbi has likewise soured. This has led some to speculate if there could be a financial “bubble” around the corner. Pairing western currencies against the eastern markets may be an excellent way to capitalise on any such fiscal ripples.

 

The Looming Brexit Concern

 

The western world has been dominated by the possibility of the United Kingdom leaving the European Union. Currently, it seems is if there is a rather even split in regards to those who deem such a move a reality and those who continue to be sceptical of this shift. It could even be argued that a thinning of market volume will be observed as any type of definitive vote draws closer. However, it is pivotal to appreciate that money can be made within the currency sector during both good and bad times. Those with a keen eye on short-term profits are actually more likely to enter into positions during a greater amount of volatility and fear.

 

The Shift to the Mobile Trading Platform

 

We would be remiss to not mention the prevalence of mobile trading during the year ahead. Astute platforms such as CMC Markets have already embraced this eventuality. Offering streamlined trading systems alongside the same sense of reliability espoused by PC-based platforms, investors can now execute trades through smartphones and tablets. If anything, this pronounced trend is likely to gain pace as operating systems become even faster and more reliable. When we factor in 4G data transfer rates and other advancements, it is easy to appreciate why mobile trading will dominate many strategies within the very near future.

 

Of course, these trends have yet to be fully defined. Unexpected geopolitical events or sudden market movements could still dramatically change the landscape of the Forex marketplace. This is one of the main reasons why investors need to keep abreast of all of the latest news. It is only through this proactive approach that informed decisions can be made. CMC Markets is pleased to be able to offer numerous tools and instruments which will place anyone in the right position at the most opportune time.

 

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January 15, 2016, 10:44 am

Protecting Your Funds When Trading FX

by: The Financial Blogger    Category: Investing Ideas

Forex trading has caused large losses to many inexperienced and uneducated traders. For all of its numbers, charts and ratios, trading FX can been seen as more of an art than science.

 

As with anything talent is key, but at the end of the day it will only get you so far. The key to being successful is developing a strategy that keeps your losses to a minimum whilst maximising your profits. Below we’ve listed 7 tips to help protect your capital whilst risking it on the forex market.

 

Stick to what you understand

As a rule of thumb, if you’re unsure of what you’re doing, or don’t feel as if you can fully justify any decision you’re making then simply don’t place the trade. You should avoid trading on the basis of hearsay or rumours and ensure you understand both the positive consequences, and the adverse results that may result from any trade.

 

Discover Your Risk Tolerance

To get the most out of your trading career, it’s important to ensure you understand how you cope with risk. To start with, it’s essential to ensure that your tolerance for risk and allocation of funds aren’t overly liberal. It’s wise to carefully determine your personal goals and proceed accordingly, especially at the start of your trading career.

 

Strategy

To start any journey you need to know where you’re going and how you’ll get there.

Whether you’re shooting for financial independence or just trying to generate extra income, it’s wise to allocate a timeframe and stick to a plan at least in the beginning. Also knowing what you constitute as failure and define as success is imperative to gaining the insight necessary for successful trading.

 

Never add to a losing position

While this seems to be common sense, many novice traders will try to drag themselves from a loss by throwing more money onto the fire. It’s impossible to know how a currency pairing will move during any given period of time. Hazarding educated guesses is all you have in FX, meaning you’ll never have solid knowledge of where a price will be even in a short amount of time.

 

Simplicity is Key

Forex trading isn’t rocket science, however overcomplicating things can make it feel like it. You needn’t be a maths genius or economics wiz to be successful. Clarity of vision alongside well-defined, carefully chosen goals and techniques offer the best path to success.

 

Don’t go against the markets

No matter what level you’re at, trading against the market is always risky. Remember trends are called trends for a reason, and joining them allows you peace of mind. Fighting the trends will create stress, pressure, fear and probably a loss.

 

Restraining emotions  

Every is human meaning that greed, excitement, panic and fear will inevitably play a role.  However, emotions have no place in a traders calculations. It’s important to control your emotions and minimize their effect on your decision making. This is one of the big reasons traders are advised to start with small amounts. Having a logical approach, and reducing your emotional intensity is the best formula for success.

 

In conclusion, trading forex is risky. Nothing will remove the risk element but you can take these steps to minimise it, helping to protect your funds. By sticking to these basic principles you’re putting yourself in the best position to ensure your losses are infrequent and to an absolute minimum. If you’d like to learn more about FX trading then visit ETX Capital for more information.

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January 5, 2016, 5:30 pm

Trading Binary Options with Bitcoins

by: The Financial Blogger    Category: Investing Ideas

Within the past couple of years more and more people have started trading binary options. Binary options trading are different from trading traditional options because you do not actually make any type of purchase. Instead of buying stocks or bonds from a company or on the market you are simply making a bet to determine whether the price of a stock or commodity will go up or down within a set amount of time.

 

Trading binary options is done by purchasing a contract that states whether or not you think a certain asset is going to finish above or below a specified price within a set amount of time. The time frame is called the expiry. The expiry can last from as little as 30 seconds to several months away. If you choose correctly at the end of the time you will win the trade. The amount you win is a bit less than 100%, with many brokers paying from 65% to 85%.

 

Some of the assets that can be traded through binary options include currencies, stocks, commodities, and indices.

 

Bitcoin and Binary Options

 

With the rise in popularity of the online currency bitcoin, there has been interest by many traders to be able to use bitcoins for payment on binary options broker’s sites. Many safe binary options brokers have seen this trend and have started to allow their clients to make trades using bitcoins. This recognition of bitcoins as a currency has helped to expand the growth of the binary options market. While many brokers are currently only offering bitcoin as a pair with the United States dollar, some binary options brokers are opening up that deal with bitcoins only.

 

Bitcoin only Binary Options Brokers

 

There are several binary options brokers that are now offering bitcoins as a means of exchange. This means that all of the prices for binary options being traded are quoted using bitcoins as the currency. The benefit of this type of site for traders is that they get to earn bitcoins from the binary options brokers bitcoin account.

 

 

 

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