The order is fixed at 1. So how do us, and both banks get the maximum profit from that order? At 8 am GMT, London open, the liquidity is million euros, and price is 1. So million euros is equivalent of USD. Euro outlook is bullish, Asian markets rose during the night, and the US fiscal cliff is getting resolved. Millions of retail investors and outlets take BUY orders and place their stops 10 pips under the current price. The market pending liquidity is million euros and current liquidity is million euros.

So, the total equivalent liquidity in USD on the market at the moment is 1. The data tells us that the stops are at 1. The price flies to 1. On your chart this is shown by the green candles getting smaller in size after a good run upwards. Not a lot you say, but we were provided with a leverage of 10 from Barclays on our position for a commission of 0.

This is then shared between HSBC, us and Barclays. The numbers above are just an example, the truth is that the volumes are huge 4 trillion USD daily and a lot of players, but that example is to show you how FX works, and this is necessary when analyzing SR levels and trends.

SR levels are defined by the Big players Smart Money and they also hold really well because retail investors use them as well. The smart money cycle happens in 3 price cycles, and then we see a short-term channel where the price is stuck for a bit accumulating strength GBPUSD last week during US session.

These price cycles do not happen randomly, they have a sequence, and in fact every candle or price move has an inside cycle and sequence. This sequence is defined by a set of numbers called Fibonacci numbers. Fibonacci numbers were not developed for trading, and they happen everywhere around us in nature, where many biological systems can be described in terms of Fibonacci-like sequences.

And combining Fibonacci algos with extremely precise price channel calculator and information on how others trade, you got the formula to rule over all other systems and strategies.

Now, why would you care when trading binary options? Because unlike with spot FX, you need to be right every time. Basically you have to have the ability to predict whether the candle is going to be red or green. For binaries and spot fx day trading I use 3 indicators with very precise functions. Forex correlations are an important trading tool.

Correlations show us which forex move together, which ones moves in opposite directions, and which ones have very little relationship to each other. This information then helps us determine which trades we should take, helps control risk, and may even provide additional trading opportunities not easily seen on the price chart. Forex correlations are typically shown in a table, with values ranging from to A value of negative numbers are called inverse correlations means two forex pairs move exactly opposite each other—when one rises the other falls, and when one falls the other rises.

A value of means two forex pairs move in sync—when one rises the other rises, when one falls the other falls. It is very rare to find an asset that has a or correlation to another asset. Although as figure 1 shows, there are a number of forex pairs which have very high positive or negative correlations to each other. That means that most the time, on a daily basis they move in sync with each other. This is important to know for reasons which will be discussed in the next section.

Find the box where the row and column meet, and it shows that the correlation between these two pairs is That means that they share a very strong inverse correlation.

Sometimes there is no relevant correlation. If a pairs has a correlation value positive or negative less than 60 the correlation is not very strong, and as we approach 0 there is no correlation between the pairs at all. Correlations tables are typically offered based on hourly, daily and weekly timeframes.

All these timeframes provide valuable information depending on what timeframe you trade on. For short-term trading, the hourly and daily correlations will be the most important important. It is also important to note that correlations change all the time.

Pairs that have a very strong correlation right now, may not down the road. Therefore, it is important to monitor correlations frequently to be aware of the changing relationship between pairs.

There are a number of reasons to care about forex correlations. The main reason I monitor them is to control risk. If one goes against you, they will likely all go against you. Another reason forex correlations matter is that they can provide you with trades you may not have seen. For instance, you believe the EUR will appreciate against the USD ie. High correlations positive to negative provide you with alternative trades; choose the one with the best trade set-up.

I also like to use forex correlations to confirm trades. Upon finding forex pairs with high correlations, I will use one pair to confirm trades in the other.

Since these pairs are highly correlated they should be moving together. Correlations can be a complex statistical topic, but hopefully this introduction gets you familiarised enough with the concepts to do a bit of homework on your own as well. Check correlations studies frequently to be aware of relationships between forex pairs which may be affecting your trading.

Use the correlation data to control risk, find opportunities and filter trades. If you are having trouble seeing how correlations work, try looking at the figures in the correlation tables and then pulling up price charts of the two forex pairs in question. Notice how the pairs move relative to one another; doing this will help create a general understanding of correlations.

Forex represents rich hunting ground for signals and alert services. With no central market, and multiple driving factors, volatility is high. Forex pairs are traded 24 hours a day, for 5 and a half days of the week. Trading volumes of currency traded are huge. All these factors mean opportunities are large, and signal services provide regular trading suggestions.

As a more established trading vehicle, signal providers for forex are more established than binary platforms. Many of the best services have been going for well over a 10 years. Potential clients can therefore check a large amount of past performance to see how good a service is. The service providers also have greater confidence in their systems, given their long term performance. For traders, this means free trials, or discounted membership for new customers.

The signal services know that traders will only be impressed via results — so they encourage traders to give them a go risk free.

We have seen a lot of forex signal services, and related ads. For us, results are the important thing. To that end, we suggest Signal Hive deliver the best forex signals, and here is why:.

This service, named Master T v2, has delivered annual profit for nearly 14 years. Signal Hive is a market place for different systems, but this one is the most consistent. Crucially, you not have to take our word for it. The system is available on the free trial the firm operate. So you can receive these signals absolutely free, with no risk. The software can be automated with some of the leading brokers. With MetaTrader 4 integration and real time indicators, the software is as good as anything we have seen.

It is easier than performing technical analysis, but it requires you to read the news and stay in the loop all day, every day. Online news is only the start. You must pick up newspapers, tune into news stations, and leverage as many other sources of information as you can. The idea here is to understand the asset as deeply as possible before evaluating whether its price will rise or fall.

You also need to reflect upon human behavior. A piece of news you find positive may not be seen as great news by the rest of the market.

One of the drawbacks of using the news to make trading decisions is that you cannot tell how far up or down the price will go and how long the price movement will last because of a particular event. If you find out they will be unveiling a new product, you can buy options and wait for your profits to roll in when everyone loves the new product.

This strategy must be used in conjunction with the news strategy. Straddle trades must be made right before an important announcement. The strategy leverages the swings of a trend. You will make some money regardless of if the price goes up or down. The straddle strategy is known among traders as one of the most consistent ways to make profits — even in a volatile market. In this scenario, the affected companies will scramble to find a solution to continue production.

Using the straddle strategy and leveraging the waxing and waning of the market in scenarios like these is an excellent way to make profits using binary options. You will benefit from the market regardless of what happens in the long run. The Pinocchio strategy is similar to the straddle strategy — it calls for deliberately betting against the current trend. In a nutshell, if an asset is experiencing an upward trend, you must place an option expecting the price to fall.

While beginners with no knowledge can apply the strategy, a deep understanding of the asset is essential to making this strategy work. Only if you understand how the asset works will you make accurate predictions and make profits. When the candle is white or dark, it indicates that the market is bearing or bullish, respectively. If the wick of the candle points downwards, place a call option. If the wick points upwards, place a put option. If you know how to read asset charts, you can try out this strategy.

Candlesticks show you a lot of information about how the asset behaves over time. You will start to see formations that repeat over time, which will reveal the potential movement of the price in the future. If you see that the candlesticks of an asset are taller and the price is experiencing a peak, you can expect the price to fall soon.

On the other hand, if you see a trough of candlesticks, you can expect the price to rise. These mountains and valleys often appear over months. You can set expiry times by looking at the frequency of a mountain and valley appearing to make a profit. Fundamental analysis is less a strategy and more a tool to help you understand an asset better. The goal of fundamental analysis is to gain information about the asset so you can profit from it later.

It requires you to perform an in-depth review of every aspect of the asset or company. Once the trade expires, you will know if you can make money from the asset and trade larger amounts.

You must then study the asset and place a small trade as a call or put to test out a strategy you think will work. Some traders consider hedging lazy, and for good reason. It involves placing both calls and puts on the asset at the same time. In a way, it is similar to the straddle strategy — you will make money regardless of where the price goes. It is also a great method of picking the right type of Binary Option.

Using boundary options is one of the best ways to leverage the momentum and win trades. In fact, they are the only options type that will let you win a trade based only on the momentum. Using the MFI indicator is one of the most effective ways to make money using Binary Options in short periods. Furthermore, since your capital will be blocked for a short time, you will be able to make many more trades in a day.

However, all short-term strategies are based on technical analysis, including this one. In short periods, the only thing that influences the price of assets is the supply and the demand.

Technical analysis is the only way to understand if traders are buying or selling, and one of the best indicators that help you understand this relationship is the Money Flow Index MFI indicator. The indicator compares the number of assets sold to the number of assets bought, generating a value between 0 and If you understand the relationship between the traders that are buying and selling an asset, you can also estimate what will happen to the price of the asset since it is determined by supply and demand.

The demand will go down, and the price will fall. The supply will exhaust, and the market will rise. The MFI strategy works exceptionally well in five-minute spans. However, in the long run, and in periods longer than a year, the MFI remains in the extremes.

The fundamental influences have a strong effect on the asset and will push the price in the same direction for years. The strategy combines simple signals to make sophisticated predictions about the price.

The fastest-moving average will be closest to the price; the second-fastest will be the second closest, and so on. When you see that multiple moving averages are stacked in the right way, you will know that the price is making a strong movement in one direction.

This is the right time to invest. If the shortest moving average is above the medium one, which is above the longest moving average, bet on the prices rising. If the shortest average is below the medium average, which is below the longest moving average, you must bet on the prices falling. While you can set the moving averages to have any number of periods, consider doubling the number of periods in each moving average.

The ratio guarantees that the averages are just different enough to create a helpful and accurate signal. You will see the same opportunities that other traders do, allowing you to tune into the inside knowledge the rest of the market has.

You must remember that using a strategy just once will not bring you any gains. Repeated trading is the only way to figure out how well the strategy works out for you. Thеrе is nο οnе-sizе-fits-all answеr fοr thе bеst tactic or strategy. Diffеrеnt stratеgiеs will wοrk bеttеr οr wοrsе dеpеnding οn yοur lеvеl οf еxpеriеncе, markеt cοnditiοns, and thе undеrlying assеt.

Hοwеvеr, thеrе arе a fеw gеnеral rulеs that can hеlp yοu bеcοmе mοrе succеssful whеn trading οptiοns. But the basic rule is to analyze the assets and determine the condition of the market. Dеspitе thе sοmеwhat nеgativе rеputatiοn, thе rеality is binary οptiοns arе lеgal. Thе majοrity οf cοmpaniеs οpеratе fairly. Οpiniοns havе bееn split bеcausе thеrе arе sοmе οut thеrе that οpеratе scams. If yοu want tο prοfit trading binary οptiοns, yοu nееd tο first undеrstand bοth thеir prοs and cοns.

Yοu nееd tο makе surе binary οptiοns will suit yοur trading stylе, risk tοlеrancе, and capital rеquirеmеnts. Trading thе samе amοunt οn еach tradе until yοu find yοur fееt is sеnsiblе. The purpose of the binary options strategy is to analyze assets and market conditions. Last Updated on December 8, by Rohan Mahndiratta. Risk Warning: The financial products offered by the promoted companies carry a high level of risk and can result in the loss of all your funds.

You should never invest money that you cannot afford to lose. Your capital can be endangered. Trading Forex, CFD, Binary Options, and other financial instruments carries a high risk of loss and is not suitable for all investors.

The information and videos are not an investment recommendation and serve to clarify the market mechanisms. The texts on this page are not an investment recommendation. Trading Futures and Options on Futures involves substantial risk of loss and is not suitable for all investors.

You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past performance is not indicative of future results. This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

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Forex binary options is one of the most active and volatile markets — making it ideal for short-term trading. Our guide to trading forex binary options provides a starting point for beginners; plus tips, strategy and education for seasoned investors too.

We explore forex trading hours, explain how to compare online trading platforms, how to manage risk and even where to find the best forex trading demo accounts. Global businesses, governments and holiday makers all need to exchange currencies at different times though is hugely different volumes.

The forex markets allow them to do this. The usual forces of supply and demand will dictate the movement of those exchange rates — and forex trading is the active speculation of those exchange rates. Buying US dollars with Euros today and selling them some time later can yield a profit if timed right. Forex binary options are a really simple way to engage in short-term speculation on currency markets.

These represent the two currencies being exchanged. The exchange rate is stated as how many of the second currency are required to buy 1 of the first. Exchange rates will often be quoted down to 6 decimal places. Online forex binary options platforms will allow retail investors to speculate on the movement of these rates, no matter if they go up or down. The fact that traders can easily speculate on both up and down movements of the price with forex binary options is a huge advantage over directly buying and selling real currencies.

Normally you only make a profit if you can sell something at a higher price than you bought it. Retail investors can start trading forex binary options using the online platforms and software of numerous brokers. One difficulty however, is in selecting which broker to choose. One key issue, is that the best broker for one trader, may not be as suitable for another.

There are a huge variety of comparison factors when looking at forex binary options brokers. Many people will look at the offers and spreads, the leverage or margin required to trade, the additional available assets like gold or Bitcoin or even if the broker is based in a well regulated jurisdiction like the UK or Switzerland.

We cover all of these popular factors in our reviews, but we also try to include some comparison factors that might get overlooked, like the minimum deposit and trade size, the type of spread is it fixed or variable and deposit and withdrawal methods such as Paypal or Skrill. Some of these factors will be important to some traders, but irrelevant to others. In addition to our comparison lists, potential new traders can use demo accounts to trial different brokers and see which they prefer.

This is especially important when it comes to usability or look and feel. Opinions on different online trading platforms will often vary. The best way to judge a particular platform is to use it. This also allows new customers to check the assets they trade frequently are available, and spreads are competitive. To summarise, here is a list of comparison factors that are worth considering when judging different forex brokers:. Beyond these there might be other important considerations such as does the broker accept traders from a particular country?

Some regions such as Australia and the US have different regulatory bodies and many brokers may not service those regions. Our broker tables will generally only show relevant brands, based on your IP. One of the biggest advantages of options trading in the forex market is that brokers are flexible and allow you to trade variations. A typical trade involves choosing a currency pair. Even the smallest fraction of a pip over or under your strike price can fetch you as profits in less than an hour.

With short expiry terms you can take advantage of any news event that can trigger market fluctuations rather than place a stop-loss.

One of the most interesting applications of forex binary options is that they can be used as a powerful hedging tool. It allows traders to transfer any risk from below the buying point to above it. If a rally continues in the right direction you can end up with a successful trade. This makes investing in binary options more fun, exciting, and less stressful for the novice trader as well.

For more about hedging, read this great article by Mifune. One of our professional traders, and founder of a money management and trade advisory firm, shares his thoughts on the fundamentals of trading forex binary options and the system he personally uses. The strategy I want to talk about is nothing secret — however it is also not very common — and the reason for its success is its simplicity.

This is simply because it is the most volatile and predictable pair. Euro-Dollar is the most traded pair, and since the opening of the Forex market to retail investors, its daily volume has increased dramatically.

The main problem I see every day when reading through binary options forums , is the sheer number of different strategies. It seems that traders think that the more complex the system, better the profits. Then, when they fail, they blame the system they were using, when in reality, the problem is behind the screen. No system will adapt itself to ever changing market conditions; it is up to the trader to adapt the approach.

As an example: A seasoned trader will quickly detect support and resistance levels on a chart. A rookie will not. For binary options, the knowledge of finding the best entry point accompanied with a prediction of the next price move is key.

With binary options every 10 th of a pip counts. Disclaimer: This sections represents my personal opinions and a strategy I personally use.

Please read through everything carefully, and do not jump to using the high-risk strategy before understanding fully how the strategy works. Please trade using a demo account before going live. This strategy is the Holy Grail for me because I do not get too greedy and if I do not feel the trade I simply pass, and wait for the next one. It is important to understand what forex is and what its main usage is: Exchange of currencies ruled by the laws of supply and demand. A simple hypothetical example: Apple sells 1 million Iphones in Europe in September for euros a piece with Euro as base currency, they deal through HSBC, meaning their invoicing receiving account is under HSBC.

But Apple reports in dollars, and the governing account is with BOA. So Apple made million euros that now sit in their HSBC account in Luxembourg. That money has to be now transferred to their BOA account and changed to USD. Now it gets interesting. The transfer order comes in on Tuesday at 4 pm GMT. The bank accumulates all the dollar orders during the night. The orders can be from yesterday or a month ago.

The bank sends operation orders to their partners like us and the commission structure, and order deadline. Euro-Dollar is trading on Wednesday at 6 GMT at 1. The order is fixed at 1. So how do us, and both banks get the maximum profit from that order? At 8 am GMT, London open, the liquidity is million euros, and price is 1. So million euros is equivalent of USD. Euro outlook is bullish, Asian markets rose during the night, and the US fiscal cliff is getting resolved.

Millions of retail investors and outlets take BUY orders and place their stops 10 pips under the current price. The market pending liquidity is million euros and current liquidity is million euros. So, the total equivalent liquidity in USD on the market at the moment is 1. The data tells us that the stops are at 1. The price flies to 1. On your chart this is shown by the green candles getting smaller in size after a good run upwards. Not a lot you say, but we were provided with a leverage of 10 from Barclays on our position for a commission of 0.

This is then shared between HSBC, us and Barclays. The numbers above are just an example, the truth is that the volumes are huge 4 trillion USD daily and a lot of players, but that example is to show you how FX works, and this is necessary when analyzing SR levels and trends. SR levels are defined by the Big players Smart Money and they also hold really well because retail investors use them as well.

The smart money cycle happens in 3 price cycles, and then we see a short-term channel where the price is stuck for a bit accumulating strength GBPUSD last week during US session. These price cycles do not happen randomly, they have a sequence, and in fact every candle or price move has an inside cycle and sequence. This sequence is defined by a set of numbers called Fibonacci numbers. Fibonacci numbers were not developed for trading, and they happen everywhere around us in nature, where many biological systems can be described in terms of Fibonacci-like sequences.

And combining Fibonacci algos with extremely precise price channel calculator and information on how others trade, you got the formula to rule over all other systems and strategies. Now, why would you care when trading binary options?

Because unlike with spot FX, you need to be right every time. Basically you have to have the ability to predict whether the candle is going to be red or green.

For binaries and spot fx day trading I use 3 indicators with very precise functions. Forex correlations are an important trading tool. Correlations show us which forex move together, which ones moves in opposite directions, and which ones have very little relationship to each other. This information then helps us determine which trades we should take, helps control risk, and may even provide additional trading opportunities not easily seen on the price chart.

Forex correlations are typically shown in a table, with values ranging from to A value of negative numbers are called inverse correlations means two forex pairs move exactly opposite each other—when one rises the other falls, and when one falls the other rises. A value of means two forex pairs move in sync—when one rises the other rises, when one falls the other falls. It is very rare to find an asset that has a or correlation to another asset.

Although as figure 1 shows, there are a number of forex pairs which have very high positive or negative correlations to each other. That means that most the time, on a daily basis they move in sync with each other.

There is no external source of money in the binary trading platforms. Trend follow Strategy. High correlations positive to negative provide you with alternative trades; choose the one with the best trade set-up. Using any strategy for one time will not bring you profits. So, the money flow index strategy is time-saving but also includes lots of risks.

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