5 Binary Trading Tips For Beginners

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Complete Forex trading tutorial for beginners

There are many financial markets in the world, such as the stock, bond, and commodities markets, but few of them can compare to the Forex market in terms of daily turnover, trading hours, and opportunities. The Forex market is the largest financial market in the world and is open around the clock, from Monday to Friday. In this article, we’ll provide a Forex trading tutorial for new traders who are interested in joining this exciting market.

Forex tutorial: What is Forex trading?

Forex is the market of the world’s currencies. Being an over-the-counter market, there are no centralised exchanges like in the case of the stock market. Instead, currencies are traded during various Forex trading sessions that span from Sydney in Australia, to New York in the United States. Forex traders buy a currency if they anticipate that its price may rise, and short-sell a currency if they believe its price could fall, making a profit from the difference in the entry and exit price.

In order to start trading on Forex, all you need is a computer with internet access, a trading platform, and a brokerage account. The trading platform is a type of software used to analyse the market and place market orders, and can be downloaded directly from your broker’s website once you open an account. Signing up for a brokerage account doesn’t take more than a few minutes, and most brokers offer demo accounts which can be used to practice trading in a risk-free environment.

In addition to a brokerage account, you’ll also need to learn what the Forex market is and how to make trading decisions. This Forex tutorial covers all the basics you need to know if you’re a beginner to the market. So let’s start right away with the history of the Forex market.

History of the Forex market

After World War II, countries needed stable currencies to restore their infrastructure and spur economic growth. As a result, the Bretton Woods agreement established a fixed exchange rate regime among major currencies and the US dollar, which in turn was pegged to the price of gold. The US government had to devalue the US dollar a few times, before the Bretton Woods agreement came finally to an end in 1973.

As a result, major currencies began floating again and the Forex market with freely floating currencies was born. However, only large institutional players could trade on the Forex market at that time, but advancements in technology have made Forex available to smaller retail traders as well.

The daily market turnover has been on the rise ever since, and reached $3.9 trillion in 2020, up from $590 billion in 1989. Today, the Forex market trades around $5 trillion a day.

The retail Forex market, as we know it today, has started growing in the last few decades with the advancement of internet and technology. It’s estimated that retail traders account for around 5% of the $5 trillion daily turnover, which still equals a respectable $250 billion a day.

Major currencies

Let’s continue this Forex trading basics tutorial with the major currencies that are traded on the Forex market. Those include the US dollar (USD), euro (EUR), British pound (GBP), Swiss franc (CHF), Japanese yen (JPY), Australian dollar (AUD), New Zealand dollar (NZD) and the Canadian dollar (CAD). Besides these eight major currencies, there are two more currencies that round up the G10 currencies – the Norwegian krone (NOK) and the Swedish krone (SEK).

The US dollar is involved in around 80% of all Forex transactions, which makes it the single most traded currency on the Forex market. All currencies are quoted in pairs, which consist of the base and the counter-currency. The exchange rate always shows the price of the base currency, expressed in terms of the counter-currency. For example, if the EURUSD (euro vs. US dollar) pair trades at 1.20, this means that it takes $1.20 USD to buy 1 euro.

All currency pairs that involve the US dollar as either the base or counter-currency are called major currency pairs. They include the EURUSD, GBPUSD, and USDJPY, to name a few. Currency pairs that don’t include the US dollar, but include the remaining seven major currencies, are called cross pairs. Examples of cross pairs are GBPJPY, GBPAUD, and AUDNZD.

Finally, there is also a group of currencies that is not heavily traded on the Forex market, which means that their liquidity is low and volatility is high. Those currencies include the Turkish lira, Mexican peso, or Czech krone, for example. The high volatility of these currencies makes them unsuitable for beginners, at least until they gain enough trading experience.

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All mentioned currencies have their own characteristics and personalities. The US dollar, euro, and Japanese yen are major reserve currencies held by central banks around the world, but the Japanese yen (and US dollar to some extent) are also safe-haven currencies that rise in value in times of political and economic turmoil in the world. On the other hand, currencies like the Canadian dollar, Australian dollar, New Zealand dollar, and Norwegian krone are also called commodity-linked currencies, as they heavily depend on the price of commodities such as oil and copper.

Basic Forex terminology

Let’s continue this Forex tutorial for beginners with the basic Forex terminology you need to know.

  • Pips – Pips are the smallest increment that currency pairs can change in value. A pip refers to the fourth decimal place of an exchange rate, but bear in mind that some pairs that include the Japanese yen have their pips on the second decimal place. For example, if the EURUSD pair rises from 1.2050 to 1.2057, this would equal an increase of 7 pips. On the other hand, if USDJPY rises from 110.35 to 110.42, this would also equal an increase of 7 pips.
  • Leverage – Since most major Forex pairs don’t move more than 1% a day, Forex traders use leverage to magnify the profits. Trading on leverage refers to borrowing money from your broker in order to open a larger position size than your initial trading account size would allow. For example, leverage of 100:1 allows you to open a position 100 times larger than your account size. But be cautious when trading on leverage, as it magnifies both your profits and losses!
  • Margin – To be able to trade on leverage, you need to put a small part of your trading account aside as collateral for the leveraged trade. Don’t worry, your broker does everything automatically for you. The margin will be returned to your trading account once you close your leveraged trade or it hits its exit price. The following table shows the required margin to open a trade, based on the used leverage ratio. For example, a leverage of 100:1 requires a margin of 1%.
  • Spread – The spread is the difference between the bid and ask price of a currency pair. This is usually the only transaction cost you need to pay to your broker in order to open a Forex trade. Spreads can be as low as 1 pip (or lower) on major pairs like EURUSD, but can widen in the event of lessliquid cross-pairs and exotic currencies.
  • Market, stop loss and take profit orders – A market execution order is used to open a Forex trade at the current rates offered by your broker. The trade will immediately be executed and you’ll have an open position on your account. Whenever you open a new trade, you should use stop loss orders to prevent large losses if the price goes against you. A stop loss order automatically closes your position once the prespecified price is reached. Similarly, take profit orders are used to lock in your profits after a trade plays out well and hits a certain price.

Forex trading platforms and tutorials

To conclude this Forex basic tutorial, let’s see what trading platforms are all about. A trading platform is simply a program that you install on your computer which is then used to connect to your brokerage account and start trading. Nowadays, there are also web-based and mobile-based trading platforms which can be opened directly in your browser or installed on your smartphone. Check with your broker if those types of platforms are offered.

One of the most popular trading platforms among retail Forex traders is the MetaTrader platform. It offers advanced charting tools, a range of market orders and a large online community were you can ask for help whenever you need it. There are many Forex exchange tutorials that cover how to use MetaTrader to trade on the Forex market, and your broker of choice might also have some basic guidelines on its website.

It’s important that you understand all concepts outlined in this Forex trading online tutorial before opening a real account and trading real money. It’s always a wise decision to apply for a demo account with your broker first in order to get familiar with your trading platform, and prevent costly mistakes on a real account.

Trading Tips For Beginners | Inspirations from Forex Trader

Trading Tips For Beginners, Inspirations & lessons from The 5%ers’ Forex Funded Trader:

Jerry.S.

37 years old, USA.

Jerry.S. has just successfully passed our evaluation program with a great trading plan and has become a forex funded trader.

He is now one of our funded traders and is trading with a 52K forex funded account on our platform.

His next mission is to reach 10% of profit and double his funds to 104K.

We spoke with Jerry.S. about his trading plan, insights, and lessons gained while trading in the Forex market and on our platform as a funded trader.

  • How were you introduced to the Forex market?
    Read about people who were economically independent so I decided to research how to invest.
  • Do you have a specific trading plan?
    I do some sort of study on how the market is doing. To understand the market and to see if it will go in the direction I predict. Then I would trade accordingly to it.
  • Tell us about your trading routine.
    My routine is to look at Fibonacci pointsand see if it will be a trend or not. I trade both range and trend.
  • Do you have any risk management techniques? If so, please, elaborate?
    Understanding risk is important and having a stop-loss is important.
    If a trade does no go my way, I get out and respect my trade.
  • What was your biggest challenge in trading, and how did you overcome it?
    My biggest challenge is to accept losses and learn from them.
    This is my second try with 5er’s and I did reach the goals within the account, but towards the end, things did not go my way.
    I did not follow the rules and ‘chase my losses.’ I learned from it and not to do it while respect my stop-loss.
  • What was the key moment of your trading career?
    The key moment for my trading career is how to manage my emotions. Once I am able to understand it then I can think clearly.
    It’s always a constant battle and I have to succeed. Things will show in my trading if I do win.

  • In your opinion, what are the most important characteristics for maintaining a steady trading career?
    Maintaining a level head and to see things objectively is the most important key I say to be a successful trader.
    Emotions are my downfall and I can be able to see it, then I know I will succeed.
  • What was your strategy for successfully passing The 5%ers’ Evaluation Program?
    My strategy is to look at Fibonacci areas and to see if it’s oversold or overbought.
  • Would you like to share anything else with us?
    This is my second time, I know I can succeed because I believe in myself.
  • How long did it take you to become a consistent trader?
    It took me nearly 12 years to be consistent and find my understanding.

Top Five Successful Strategies For Trading Binary Options

If you are trading without a strategy or a tactic to help you with binary options, you might as well

The article was written by Connor Harrison from Binary Brokers (BBZ). BBZ makes an effort to educate their traders so that they can understand recommendations regarding binary options, international legislation, risk management and other issues related to trading.

Trading in binary options is one of the popular trends in the financial markets today. Both experienced and novice traders are rushing to include them in their investment portfolios. Just like any other trading platform or business, you must have a strategy to use in order to consistently be making money.

If without a strategy or a tactic to help you trade in binary options, you might as well consider yourself gambling. Relying on luck is not very safe in trading binary options as it will eventually not work for you and might end up losing all of your investment. You will need a solid technique that you can use every time, which will help you make the right predictions. Moreover, you need to employ a strategy that you understand well and which consistently increases your chances of winning.

Bet or Trade?

Strategies are generally categorized into two groups. These categories are;

  • Betting model based strategies – In these strategies, it is assumed that the investor will employ betting strategies, whether they are familiar with financial markets or not. These strategies use several tactics that are designed to increase the probability of winning. Strategies based on the news are the best example in this category.
  • Market behavior strategies – In these strategies, the investor relies almost wholly on technical and statistical data that are readily available or that which they have researched and worked on. While these strategies are a bit harder to understand and master, they are the most reliable ones since they are objective. There are techniques developed to help you understand some of the data, such as charts and which will make it easier for a new trader.

I – Fundamental Analysis Strategy

This strategy is concerned with the analysis of the behavior of the overall performance or attributes of a company. As an investor or trader in binary options, you are interested in knowing about the health of the balance sheet, income statement and the cashflow statement of the company before you consider buying an option. The other factors that you should check out include the employee and the business partners’ satisfaction. In short, this strategy tries to look at the overall picture of the business they want to invest in their stock and at times the overall industry.

II – Technical Analysis Strategy

This is a quite popular strategy in options trading. It is mainly concerned with the study of the past, using different parameters such as charts in order to predict the future price of an asset. This method is not concerned with getting the intrinsic value of an asset. It’s quite useful in options trading because as a trader, you don’t have to delve into the company’s financial statements. Among the tools used in technical analysis include Bollinger bands and Moving Average among others.

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III – Basic Options Strategy

This strategy is quite popular among options traders. It is designed and employed by a trader to safeguard him/herself from incurring total losses on their investments. You will pick an underlying asset or currency that you are interested in and then if the market movement of the strike price is heading towards a good direction, say upwards, you place a call option. At the same time, you will place a put option on the same asset.

Let’s use an example:

The GBP/USD currency option is going at 1:4000. You place the call option of $100 which will expire in 30 minutes. The payout is 70% and 15% if you lose. In the first 15 minutes the asset is at 1:4015 which is good so far. At this specific time, you buy a put option for the same asset at 1:4015 expiring in 15 minutes at $100. The payouts are the same as those of the call option.

At the end of the 30 minutes there will be two outcomes;

  • Your 30 minutes call option wins and the 15 minutes put option losses. You will have earned $185 from the 70% call winnings and the 15% consolation refund from the put option (the opposite can happen, put option wins and call option losses).
  • Both the call and the put options end up in the money. You will get $340 ($170+$170). Since it’s almost impossible to lose on both options, the general risk of loss in this strategy is only $15 in order to win $140.

IV – Algorithmic and signals

There are apps which are sold and which are very good at trading or analyzing the market data. You might find it appropriate to invest in such an app. This app is installed in your computer and gathers data that you want and then analyzes it to come up with the best possible outcomes. Technical and fundamental analysis data are used here.

The computer will then pick a trade for you to trade in. You could even go ahead and design the app to be actually trading for you. You will however need to be regularly updating the raw data that the app picks its analyzing details from.

V – Co-integration Trading Strategy

There could be two stocks in the market that have a high correlation relationship. This could be because they are in the same industry and are traded in the same market, hence affected by many factors the same way. Given the high correlation between such a pair of stocks, you will find that whenever there is a gap between them it will close soon after. The gap can be caused by the weakening of one stock temporarily. The main task here is to identify the gap.

After identifying the gap, you should buy the call option for the stock that is weak or a put option for the asset if the stock higher in price is bound to come down. Eventually, the two assets will come to the correlation path and that should be the ‘point of exit’.

Final Word

Strategies, just like investment options, are many and you could end up with one which gives you consistent winnings. If you are a new trader, research well and identify the one strategy that best suits your trading portfolio and pattern. If you are a bit more experienced, you can create your own strategy or combine two existing ones to form a hybrid.

What are some tips for binary trading?

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Sorry for the late answer. Health issues.

So, tips for binary trading. I’m going to give you a couple of tips that really do not have much to do with actually opening a position.

I believe that the method you use to trade is only 20% of what determines your total success. When it comes to overall trading. What are the other 80% determined by? You may ask. Well, lets say the remainung 80% are determined by your psychological make up.

Most of the edges available out there have a 60% success rate at least. If you keep using them as they are. Only as they are. Without tweaking them. But would you .

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    Free Demo Account!
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  • Binomo
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    Trustful Broker!

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