Forex Binary Options

The following are the considerations that binary options players who want to start trading forex binary options should consider:

  1. Time of trade.
  2. What currency pair(s) to trade.
  3. The best contracts to use.
  4. How to analyze currencies for money-making opportunities.

Trading Times

Forex is a market which operates on a 24-hour schedule, making it possible to place trades at any time of the day. This is not obtainable in other markets. This means that on a binary option platform, currencies will be available for trading always. There will hardly be a time when a trader will login to his binary options account and see currencies slammed with a “not available at this time” notice. However, the best opportunities to make money with the Call/Put option occur when the markets are at the peak of activity, when the major forex trading time zones overlap. A digital option trader who is in the markets to make real money should therefore be conversant with these times so as to key into the opportunities when they present themselves.

What Currency Pair to Trade

What currency pairs should those trading forex binary options be concerned with? These are pairs which command good movement and have a healthy intraday range. Some currency pairs are notoriously static. An example is the EURCHF which used to be the darling of safe haven currency traders until the Swiss National bank’s intervention in the markets in 2011 spoiled the party. Today, that currency pair simply hovers around a very static range, with occasional breakout movements. Not only does this not present good opportunities, but brokers will offer low payouts for such assets with highly predictable price movements. This is not good for account growth.

Of all the contract types available, the Call/Put option and the Touch binary option contract present the best opportunities, and it will be necessary to use assets with reasonable volatility to bet on these option contracts. Therefore, currency pairs with adequate volatility and intraday ranges of at least 100 pips are the way to go.

The Best Trade Contracts

As we just stated, the Touch/No Touch option and the Call/Put options are the best contracts to use when trading assets because these are the trade types that easily respond to the conventional methods of technical and fundamental analysis used in the financial markets. The Call/Put option trade contracts mimic the Buy-Sell trades used in the forex market, and selecting price targets that the asset will make contact or fail to make contact with (the Touch/No Touch bets) is directly dependent on the direction and extent of price movement of the selected asset.

Analyzing Currency Pairs

The forex market is generally a very volatile market. This provides opportunity for the binary options trader with a mitigation of some element of risk that is present in the spot market. While this sounds appealing, it does not remove the element of analysis as a means of achieving profitability in the binary options arena. The all or none nature of outcomes in this market place a tendency on the average trader to risk a guess on one out of the two trade options being the correct one. Using the same methods of technical analysis that are used in forex and other markets (albeit with some modifications), it is possible to pick out profitable opportunities with a 60-70% degree of success. When combined with good money/risk management techniques, forex binary options can become a profitable investment vehicle for today’s retail trading population.

Recommendation:

Recommendation:

Risk warning: Trading binary options, CFD or other leveraged products carries a high degree of risk. Be aware that you can lose even more than the capital you invested. Only trade with money that you can afford to lose. This site is purely informational and cannot replace getting professional advice before trading for real money.