Every trader should understand the difference between binary trading and forex trading since applying the same methodology in both cases can damage your capital.
What is binary trading?
It is very important to understand that binary options are contracts with fixes risks and fixed rewards. In this case, the trader must decide if a particular financial asset will go up or it will go down during a fix period of time. The trader knows from the start how much he can make if he is right and how much he can lose.
Risk management strategy should also be adapted to this circumstances as in case you are wrong and the price does not go in the direction you predicted you will lose all the money you’ve risked. What each trader should understand is that if you want to make money with binary trading in the long run, accuracy is very important, so your number of gains should be higher than your losses. Less than 50% accuracy means that you are mathematically going to blow up your entire account.
How is forex trading different?
The forex market is a more flexible environment since you can set by yourself the amount of risk that you take and also you can decide when to take profit. Since the ultimate risk and profit are unknown, forex trading carries higher risks as it is harder for any individual to predict exactly where the price is headed.
Another key difference is margin trading. In forex you can use leverage so you are able to trade larger volumes than your initial deposit, while in binary trading that tool is not available.
In terms of similarities, it is worth to mention that both binary options and forex trading are online investments opportunities, being available through a broker platform.
To sum up, both binary options and forex trading have strengths and weaknesses, but what any trader should understand is that you have to adapt your strategy to the environment that you trade. A strategy with very high accuracy is a must for binary trading while in terms of forex trading, an increased attention to a more complex risk management system is absolutely required.
The market is a community of people which interact on a day to day basis. The purpose of their interaction is to buy or sell financial assets in order to make a profit out of price differentials. What any beginning and experienced trader need to understand is that price do not move up and down just randomly or driven by a mysterious force (or an occult conspiracy). The people who sell drive the market down and the people who buy it lift it up. They make the decision to buy or sell based on the view that they over a particular market or equity or any other financial instrument.
What is the market sentiment?
The market sentiment is the overall view that its participants have over a given period of time. The market can’t be moved by a single individual, even though it had a vast sum of money, so the combined force of a certain percentage of market participants is the one that drives prices.
Understanding how the other market participants view a certain financial instrument is crucial when trading as it can enable you to anticipate future move and avoid being trapped in the wrong side of the market.
By developing skills that can help you examine and determine the market sentiment you will have a highly valuable tool for forex analysis or equity analysis etc.
There no use of having tons of knowledge about the markets, trading, risk management etc., if you are not able to apply that information in order to understand how the market works and make good trading decisions.
Since the market sentiment can help you determine the overall view of its participants focusing on learning how to read it is essential.
To sum up, market sentiment refers to the general view of the majority of a particular market and it also represent one of the key elements a trader should learn how to master, no matter what type of analysis you need(forex analysis or commodity analysis etc.). Learn how to read it and you would be one step ahead in your trading adventure.
Jan. 14, 2017 – News broke this week that the Banc De Binary (BDB) will be closing its doors for good. Since their inception, they have faced a constant array of issues including several lawsuits. Although they were one of the very first binary options brokers, their reputation has been taking hit after hit. It has reached a point where they felt it is no longer worth staying in business.
The company has been having difficulties dealing with the problems that they have been facing. The fines that they have been fighting are having a net negative impact on them. It has reached the point where the best option is to shut things down and move on.
One such lawsuit involved being fined by Cysec for €350.000. In another, BDB was forced to pay out $11 million in fines for taking in US customers, which was forbidden at the time. In addition to those fines, another significant hit came when the BDB’s founder was charged with $150,000 in fines. These fines quickly began to pile up and they push the broker past the tipping point.
One insider confirmed the motivation behind closing their doors. FinanceMagnates explained that the damage that the company was taking him is not worth the reputation that they had to carry around.
Since the announcement, BDB has ceased the acceptance of any new accounts. In the meantime, they are working to get the funds returned to all of their account holders. Returning all of the funds to their account holders will take a long time, but the expectations are that they will be able to recover and return all of the money that customers have put into their system.
This will have a significant impact on the binary options industry. BDB is a $500 million company and they are about to close their doors. Experts are concerned about the impact this will have throughout the world of binary options trading. In a place where consumers are skeptical of the nature of binary options trading, a firm this large closing like this will only lead to further skepticism.
If you are a customer of BDB, we would recommend that you login and try to withdraw your funds as soon as you can. Although we do not anticipate any of these account holders having a problem withdrawing your funds at any time, there have been cases where companies had trouble recouping all of the money that was deposited in through their accounts. It is better to err on the side of caution and withdrawal as soon as possible.
The impact of this will be felt for years to come. Although binary options trading is a perfectly legitimate way to invest and increase your income, people will look at things like this and hesitate the next time they are thinking about getting involved with this industry. It is a black eye on what is otherwise a perfectly legitimate form of investing.
It is a fact that a brokerage account is essential for starting any investment or trading. You can open such an account only with a broker. So, selecting the most knowledgeable and reliable broker is as vital as selecting the right commodity to invest. This vital task is not completely different from choosing a commodity or stock, as it needs muchmeticulous contemplation.
Perhaps, this is because not all brokers are suitable for all investors. Each investor has its own unique priorities based on which she or he selects an online or a brick-and-mortar broker. A few investors do not mind paying higher commissions, while others have a priority of lower overall cost. Here are some factors to consider and weigh as per your priorities for selecting the best broker.
Your Trading Style -> Full-Service or Discount Broker
Before you look for any brokers or online reviews, find out your trading style or how will you trade. You might choose the buy-and-hold strategy or move-with-the-market strategy to trade more frequently. Regardless of the chosen approach, do a thorough research on it, evaluate the current market state, and then pick a broker that can offer all services and tools for your strategy.
Here, you get two choices: Discount and full-service brokers. While discount is tempting, it is not always a great deal. It is more reliable to choose a full-service broker. Such brokers provide more services and have enough knowledge to guide the beginners.
They do much groundwork, offer timely advice, and give personalized recommendations. Thus, you can easily gain confidence for trading and knowledge of different markets.
However, a full-service broker charges handsomely. So, if paying brokerage fees is an issue, you can go for a discount broker.
Recognition/Endorsement -> The Key to Trustworthiness
It is essential to choose a licensed broker with good experience and loyal customer record. Having such a broker increases your probability of making profits. Well, licensing and loyal records only follow a certified/recognized broker.
Such brokers are usually the members of renowned institutions or agencies such as the Securities Investor Protection Corporation (SIPC) and Financial Industry Regulatory Authority (FINRA).
Pricing -> Quality Functioning
Selecting a broker just because its commission is the lowest one, is unwise. Remember, you get only what you pay for. This is how price indicates quality. If you choose an online service, an ad fine print states the services for which the advertised rate is applicable. So, do read it! Mostly, fees are high for limit orders and options.
Availability for Service -> The Key to Reliability
Ideally, a broker should be available to help whenever you need it. You can check out the work timings for that purpose. In case of an online broker, try visiting the site at different times, particularly during the peak hours of trading and see how fast is the loading speed. Further, test some links to ensure that there are no navigating issues. As a tip, check out this aspect in the specific reviews, such as trade.com review.
You can even call a company and ask for help to see how promptly it gives the response. At least, you will know the waiting time.
Extras -> Diversified Portfolio at Economic Rates
Choose a broker that offers extra freebies or goodies as well as different products such as bonds, options, gold, futures, and financial services. He will be an economical choice for you.
Every trader desires to earn more money so that he/she can have that ultimate vacation or buy that dream gadget or other stuff. Nonetheless, before success knocks on your door, you have sweat hard. With this, you need a good strategy to navigate your way through the trading arena. Once strategy that you can most likely use is Reversal Channel Binary Option.
HOW DO YOU USE THE STRATEGY?
The strategy’s name speaks for itself. You can use the strategy based on your personal trading decisions. Its strength evolved around the thought of knowing reversals wherein channels are formed on its charts. This method only needs two easy Metatrader indicators known as the CMA indicator and the TMA or Price border indicator.
You can use the price border indicator to know potential reversal places, as well as channels. This indicator’s lower bands are green which means bullish and higher bands are indicated in red which means bearish. CMA indicators run through charts either reflecting red or green. It actually acts like chameleons having 2 colors that depend on market situations. Both indicators need to agree so that you can open trades. For you to buy a Call, you have to confirm if prices has crossed over the Price Border indicator’s green bands and when CMA indicator has changed green. After so, you can then put calls at the next bar’s open. Conversely, in buying a Put, you have to make a confirmation that prices have crossed the price border indicator’s red band and that the CMA indicator has turned red. After this, you then place Put at the next bar’s open.
The good news is that you can simply download the strategy’s archive with all its indicators necessary for the strategy. You can paste all .ex4 indicators in your trading platform’s program files which are in the indicator’s folder and then apply them to the chart and then they will appear. These indicators are specially created for Metatrader trading platform. Moreover, you need to paste the template file to your templates folder then re-open the trading platform. After this click on the chart and then select template and then finally click on reversal channel binary options strategy.
WHY IS IT BAD?
The fact that it shows false reversals make this strategy suck. Yes, indicators typically show fakes signals but this signal actually repaints which means that the indicators recalculate’s its past price’s behavior. Moreover, if you already have a trading knowledge., you can observe higher time frames in order to know existing trades including resistance and support levels. This actually helps limit repainting.
WHY IS IT GOOD?
It does not suck primarily because it is a combination of everything that you might like in an ideal trading system. It is also quite east to use, well presented and allows traders to properly interpret signals. Its best feature is that it provides the probability of promising profits with a hundred twenty minute expiry. Moreover, it can be installed easily on Metatrader platform.
Overall, this strategy has a useful system especially when you can solve its repainting issue. Sadly, you cannot back test it even by scrolling back your charts. It may seem promising but when you test it out in live market, it can be very different. In its present form, not all traders can use it because it comes with advanced techniques that have to be used to lessen repainting indicator impacts. The best thing to do here is to try it out first and then find out if you are happy with it.
If you love writing on your diary then you will surely enjoy trading. You will also get then chance to keep a diary when you trade. Yes, it may sound boring or corny but with a trading journal, you can be one step higher on your trading goals. You may think that there is nothing worth writing about it, but it is actually a very useful process. Why should you write and what should you write about in your trading journal? Here are some reasons why and how you should start writing a trading diary now.
Keeping track of Wins and Losses – Say for example you have lost a trade, and you become so angry and miserable. You will most likely behave in a very common manner. You will probably jump from trade to another so that you can immediately makeup for your losses. And then you will blame your losses on being unlucky or bad luck and then get’s very pissed and so something strange. Another example would be the opposite – winning. You have delightfully succeeded, and you behave in a typical manner. You believe that you are invincible, and you think that you had the best strategy, and you feel buying everyone a drink. You might also feel that you will trade more. These are really awful examples, but this will actually happen to you and if you are smart enough to notice – none of these behaviors are admirable in the trading world. Why is this so?.Simply because there are lessons that you have to learn in every trade you have.
It is hard to achieve a useful experience when keep ignoring results and if you do not assess and analyze these results. This is when the need for keeping a diary comes in the picture. One of the best ways to organize and enhance your memory is by keeping a diary or journal. When you come across similar trade opportunities, you can act in a methodical and concise manner. You can do away with similar mistakes, and you can remember the right decisions that you have made in the past. Thus, your anger and celebration can hold because you need to jot down your trades while you still have a fresh memory. By using a journal, you can identify your strengths and weaknesses.
Keeping a trading diary is pretty easy. It’s just like keeping a diary when you were a kid. You need to have a safe place for your diary. No, it’s not on a notebook were you need a pen and paper. Times have changed and letting anyone know about what you went through with your trades is ideal. It is best to have a public journal so that you can share your ideas with others, and you can have their ideas as well. There are many online trading forums that you can go to such as Communitraders. Here, you can easily have your own thread. You can make use of this thread as your own trading journal.
Trading implies that you have deal with charts, it is also ideal that you put pictures on your journal. With detailed pictures, you don’t have to write more and explain more. Chart screenshots are highly recommendable.
Moreover, if you choose to write a journal the traditional way, you can always keep a notebook where you can put your notes and experiences. It’s always nice to read and re-read your notes before going to bed. You can make your journal as your trading novel.And here you are. They Why and the How in writing a diary for your trading experiences. The more organized and detailed your diary is, the more convenient it is for you to follow and learn from.