Trading with Forex Binary Options-JB88

Trading with Forex Binary Options

As one of the most active markets with the highest volatility when prices change, the forex market is the market with the biggest liquidity for traders. Forex binary options are simpler and lower risk trading methods than ordinary forex trading (spot forex). This is because, we do not need to make sell / buy orders on the traded pair, but only estimate the value of the pair's currency movements.

For example, if we trade forex with a EUR / USD pair, we need to open a position to buy or sell a base currency based on currency value movements. In forex binary options, we only need to estimate if EUR / USD will go up or down for a certain period, and get profit if our estimates are correct.

Like other binary options, forex binary options have a predetermined time period and price specifications. This type of trading also provides a predetermined payout. The range of payouts ranges from 0% (if prices move according to estimates) up to 85% (if prices don't move as expected).

Start Trading
Starting trading with forex binary options is not difficult. You can follow the steps below to start trading with forex binary options:

Choosing a Broker: Before starting trading, prospective traders are advised to choose the broker as well as possible. Choosing the right broker is very important because besides the payout ratio can vary, the deposit and withdrawal system also varies from one broker to another broker. Therefore, it is highly recommended for beginners to find a lot of information about binary options brokers on broker review review sites.

Opening a Binary Options Account: Prospective traders are now greatly facilitated by the facility of a demo account that can train them to learn to trade correctly before actually plunging as a trader on a real account. Therefore, after determining the preferred broker, beginners are recommended to open a demo account first on the broker platform that has been provided. But if you want to immediately feel real trading, prospective traders can immediately open an account at their respective broker by filling out the registration application form that has been provided.

Choosing Trading Instruments: Binary options have many instruments that can be traded, but because here we are discussing forex binary options, prospective traders are recommended to choose currency assets or forex to run binary trading. After that, prospective traders can immediately determine the currency pair to trade.

Setting Expiry Time: Expiry time or the due date is the deadline used to close a trading position. In binary options, expiry time is determined before trading starts. After selecting a currency pair, the prospective trader then sets the most appropriate expiry time. Although usually the maturity ranges from 1 hour to a maximum of 1 month, there are also brokers with expiry time services of less than one hour.

Analyze and conclude the results: Forex binary options are inseparable from various types of analysis to detect movements in currency values in the market. Therefore, beginners will be safer if they make an order after analyzing the price movements of the value of the pair being traded. The results of the analysis are then used to determine the direction of the option along with the approximate number (strike price).

Choosing Transaction Types: Forex binary options trading is executed by specifying a put option if you estimate the price to be lower than expected or call if you predict the price to rise higher. This type of trading is high / low trading. In addition, there is also a touch / no touch option if you will estimate the price in a more specific number when expiry time arrives.

Setting the Amount of Capital and Setting the Payout Ratio: The amount of capital in a trading session varies between $ 5 to $ 5000. Meanwhile, profit and refund in binary options are selected before starting trading. The payout ratio usually ranges from 60-80% for profit and 5-25% for refunds, depending on the policies of each broker.

After that, the trader can wait until the due date to find out the estimated results. If the prediction is correct, the trader will make a profit. But the trader will also get a refund if the prediction turns out to be wrong.

The trading process with forex binary options is inseparable from analysis as well as forex spots. Starting from determining expiry time to the last step, traders need good analytical results to secure their position in this trade.

Binary Options Forex Trading Method
After understanding the steps to start trading with forex binary options, then you can listen to a further example of the forex binary options trading session through the following trader A experience:

It is known that USD / JPY is at the level of 103,903. A estimates that if another hour the pair will be above the level of 103,907. Therefore, A takes the option call and determines expiry time of 1 hour. Broker A has a payout ratio of 60-80% for correct predictions and a 5-25% refund if the estimate is wrong. The number of transactions A is $ 100 and with a payout ratio of 80% for correct predictions and 5% if the prediction is wrong. An hour later, it turns out that USD / JPY is at 103,909, or higher than previously estimated. Thus, A gets an 80% profit so the amount he receives is $ 180.

Then what happens if it turns out that the value of USD / JPY actually falls from the estimated A? The answer, A will receive a return of 5% of the initial investment, which is $ 5 only.

The picture above is trading that is done with one type of binary options trading, which is high / low. There are several other types of binary options to be able to start trading with other variations.

From the explanation above, it can be concluded that you can reap profits in less than one hour, thanks to the slightest pip gap above or below the strike price. Whereas if you do regular forex trading, the price must move at least 81 pips if you want to get the same profit on an account with 1: 100 leverage and $ 1000 capital.

Advantages of Binary Options Forex
Compared to forex spot, forex binary options have their own advantages that are not owned by ordinary forex trading, including:

Easy to learn
Getting started Trading binary options is one of the easiest processes of various types of trading that are on the market today. Just imagine, someone just needs to set his predictions at a certain price and take advantage of the results of these estimates. This condition is certainly different from the forex spot which requires traders to actually buy their trading instruments. Although both trades have the same basis in estimating price fluctuations, forex binary options are much simpler to do because they only place estimates as a traded tool.

No Need for Much Experience
To become a successful trader in forex binary options, experience is not the main factor to achieve it. Through several advantages of forex binary options, beginner or experienced traders can both benefit. For new traders, forex binary options are a fun trading tool because of the simplicity of the system and not too high risk. As for experienced traders, forex binary options can certainly bring periodic profits in each trade.

Have a fixed payout ratio
With the calculation of the payout ratio that has been previously set, traders do not need to worry about guessing profit or loss waiting for the trading process to take place. By choosing a profit and refund level at a certain percentage, the trader can immediately find out how much profit is earned if the trading is successful and how much the loss is if it turns out that the trading failed. Thus, the risk management applied can be simpler than a forex spot, where traders must take into account the number of stop losses and different profit targets for each trade.

Benefits of being earned in a short time
The expiry time facility in forex binary options helps traders to set a certain period in a trading session. This makes the calculation of profit and loss in forex binary options more consistent and convincing. Some brokers even provide roll forward services to speed up expiry time if prices turn out to move faster than expected. In this case, the trader can estimate for himself the desired expiry time, starting from 1 hour to 1 month. If profits are achieved in a period of less than 1 hour, of course this will make profit as something that can be obtained quickly and easily.

Promising Hedging Devices
One of the advantages of other forex binary options is its ability as a hedging device, because it allows traders to move or limit risks from changes in the direction of price movements. For example, you open a long position in ordinary forex trading, then after it detects reversal signs, or the price moves lower, then usually you will immediately cut loss there.

But with binary options, there are other alternatives that you can do. The trick is to open the "put" option in binary. Thus, even if one of the two transactions gets a loss, you really don't suffer a loss. Therefore, investing through binary options is considered easier and more enjoyable, especially for newcomers.

Basically, forex binary options have a much easier and more promising process than forex spots. Although it has the same basis and analysis in determining price movements, forex binary options do not have complicated calculations in determining risk management. Therefore, trading with forex binary options can be an alternative to cover losses from trading forex spot.