Using Traditional Forex Brokers for Binary Options Trading

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners!
    Big Sign-Up Bonus!
    Free Trading Education!
    Free Demo Account!

  • Binomo
    Binomo

    Only For Experienced Traders!

Using Traditional Forex Brokers for Binary Options Trading

In 2008, Binary Options trading was made easily available to the public. This new trading instrument made a huge impact in the retail trading industry. It is still getting stronger and more and more traders are joining it. Most of you mage have been used to trading through service providers for Binary Options or brokerages who exclusively provide binaries. Recently there has been a developing trend where in Forex brokers begin offering Binary Options trading in other ways. This is just the start of something great but presently you will most likely see it going to a fresher direction. Forex and Binary Options are close to merging together. When this happens, you, as a trader can have more control.

FROM FOREX BROKERS TO BINARY BROKERS

An approach to trading is establishing a relationship with a provider of Binary Options platform. Offering binaries the old way is also another way to do it. You can start with using another platform that is entirely used for Binary Options. You can have a number of Platform options to choose from. Before Alpari was the most popular forex broker which opted to be in Binary Options. However, it seems that a single platform is not sufficient for Alpari that is why they opted to make 2 more platforms which shall be provided to clients with regards to their region. CIS or Commonwealth of Independence States and Russia can use MarketPulse as their platform. SpotOption can be used by traders in the United Kingdom. Forex brokers who have also gone binary include TopOption, HotForex, and Markets.com.

If you already know about the two major platforms mentioned above you will find it easy to understand its typical features. There are no massive changes but there is an extra feature. Alpari’s platform can let you trade with a thirty second expiry. This is by far the fastest available expiration. Thrill seekers will surely love to try this out. If you are bored with the 60 second expiry then you can check this out.

BINARY OPTIONS TRADING FROM META TRADER 4

Another notable innovation that has been influencing Binary Options is the probability to directly trade tom MT4 which is a popular Forex platform. For quite some time, binary options traders have been using it for doing technical analysis. This allows for actual trade to be placed on their platform for binary options. However, this method of trading can be quite tedious especially when you trade really short expirations because prices displayed on MT4 platform is not the same as the one offered by binary options brokers. This is normal because varied brokers have varied price feeds and above all Binary Options make use of their calculation techniques. Through time, some brokers may follow this path and this trend just started after all.

Among the pioneering Forex brokers who directly offer Binary Options from MT4 is Direct FX. It s a reputable and regulated broker from Australia. Many of you may have complained of the issue that binary options traders cannot use necessary tools for conducting correct technical analysis. The good news is, the monopoly is over and you can fully use Meta Trader 4 without opening a demo account from another broker. You no longer have to switch platforms in order to actually trade. The platform’s biggest disadvantage is that as a trader, you can only have Forex assets traded. You cannot trade indices, stocks, or commodities.

IS IT A BETTER CHOICE?

Now that you know these innovations that may change your ideas on binaries it is up to you to choose. The reality that famous brokers such as Alpari reached out to Binary traders cannot actually be considered as an innovation. However, it shows that binaries are kick starting its fame.

MetaTrader 5

What is Forex trading

The foreign exchange market (Forex) is the world’s most liquid and most traded market, where trades worth trillions are completed each day.

Forex trading involves buying one currency and selling another currency at the same time. This is why you always see them quoted in pairs. For example: EUR/USD and GBP/USD.

Which currencies can I trade

Forex trading involves buying or selling these “currency pairs”. When you buy a currency pair such as EUR/USD, it means that you are buying the EURO and selling the USD at the same time.

Currency pairs are categorised as follows:

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners!
    Big Sign-Up Bonus!
    Free Trading Education!
    Free Demo Account!

  • Binomo
    Binomo

    Only For Experienced Traders!

  • Major pairs – Consist of the world’s most widely traded currency pairs
  • Minor pairs – Consist of less liquid currency pairs
  • Exotic pairs – Consist of one non-USD major currency that’s paired with the currency of an emerging economy. For example: GBP/HKD

The spread – why it matters

When you see currency pairs offered by a broker or trading service, there are usually two prices available: the ask price and the bid price. These are also known as the buy price and the sell price respectively.

The spread is the difference between the ask and bid price.

Based on the table below, can you tell what is the spread for the EUR/USD currency pair?

Symbol Bid Ask
EUR/USD 1.05652 1.05653
GBP/USD 1.24509 1.24515
USD/CHF 1.01010 1.01015
USD/JPY 113.248 113.251
USD/CAD 1.31441 1.31444
AUD/USD 0.76876 0.76879
AUD/NZD 1.06683 1.06691
AUD/CAD 1.01043 1.01050
AUD/CHF 0.77652 0.77658

Let’s calculate the spread for EUR/USD:

Ask price – Bid price = Spread

1.05653 – 1.05652 = 0.00001

What time is the market open for me to trade

The Forex is an over-the-counter market where trading takes place between two parties, and not with a centralised exchange or marketplace.

Depending on your broker or trading platform, you can start trading from the time the Sydney market opens on Monday morning to the time the New York market closes on Friday evening – up to 24 hours a day, five days a week.

Binary.com clients can trade Forex from Sunday 21:00 GMT to Friday 21:00 GMT.

How to trade Forex

A Forex trader always has one objective in mind when trading: to exchange one currency for another in order to make a profit.

This is why we’ve come up with the following three-step tutorial to help you bridge that gap and make your first trade:

Step 1: Learn to read currency pairs

One of the first things most Forex traders learn is how to read a currency pair. There are two parts to a currency pair

EUR / USD

Tips

  • The base currency is always equal to one unit.
  • The ask price of the currency pair indicates how much of the quote currency is required to buy one unit of base currency. This is more commonly known as the exchange rate.

For example, if you see that the EUR/USD has an ask price of 1.05382, you’ll sell USD 1.05382 (quote currency) for every EUR 1 (base currency) you buy.

If the bid price is 1.05229, you’ll buy USD 1.05229 for every EUR 1 you sell.

Step 2: Understand when to buy and when to sell

Think that a certain currency will go up or down? Learn when you should buy (or “go long”) and when to sell (or “go short”).

Traders choose to buy a certain currency pair if they think the value of the base currency will rise. The opposite is also true: they sell a certain currency pair if they think the value of the base currency will fall.

Let’s compare the differences between buying and selling, using the EUR/USD as an example:

  • You’re buying the EUR and selling the USD
  • You expect the EUR to rise in value so you can sell it back for a profit
  • Buy = go long
  • You’re selling the EUR and buying the USD
  • You expect the EUR to fall in value so you can buy it back at a lower price (and make a profit)
  • Sell = go short

Step 3: How to purchase your first currency pair

After you’ve decided which position you want to take, your next step is to purchase that currency pair on MetaTrader 5.

Here’s an example of the EUR/USD currency pair and its bid-ask price:

To go long, you’ll want to click on ‘Buy’ to purchase EUR 1 for USD 1.17726

To go short, you’ll click on ‘Sell’ to sell EUR 1 and receive USD 1.17725 in return.

Forex margin policy

Margin allows you to trade on leverage – meaning your existing capital can give you a much higher level of market exposure.

For example, if you wanted to purchase 100 units of a particular asset that’s trading at USD 50 per unit through a traditional broker, it would typically cost you USD 5,000 for this transaction.

However, with leverage you can purchase those 100 units at a fraction of the typical cost – depending on the leverage afforded to you by your broker or trading platform.

How to calculate margin

You can determine the margin for our currency pairs by using the formula below:

For example, if you buy one lot of the EUR/USD pair with a contract size of 100,000 and leverage of 100:1, the margin that you need to purchase one lot of EUR/USD will be calculated as follows:

What’s a margin call and how is it applied

Equity is the sum of your balance and floating profit and loss (PnL). Margin level is the ratio of equity to margin. When that ratio reaches a specified percentage (usually 100%), your account will be placed under margin call. This does not affect your ability to open new positions; it serves to alert you that your floating PnL is moving lower. However, it is recommended to add funds to your account in order to keep your positions open. Alternatively, you may close losing positions.

What’s a stop out level and how is it applied

If your margin level reaches an even lower level (usually 50%), it will reach the stop out level where it is unable to sustain an open position. This will lead to some, or all your open positions being forcibly closed (also known as “forced liquidation”).

When your account hits the forced liquidation level, your orders and positions are forcibly closed in the following sequence:

  1. We delete an order with the largest margin reserved
  2. If your margin level is still under the stop out level, your next order will be deleted. However, orders without margin requirements will not be deleted
  3. If your margin level is still under the stop out level, we will close an open position with the largest loss
  4. We will continue to close open positions until your margin level becomes higher than the stop out level

Forex contract specifications

Major pairs

Symbol Description Lot size Minimum volume Volume step
AUD/CAD Australian Dollar vs Canadian Dollar 100,000 0.01 0.01
AUD/CHF Australian Dollar vs Swiss Franc 100,000 0.01 0.01
AUD/JPY Australian Dollar vs Japanese Yen 100,000 0.01 0.01
AUD/NZD Australian Dollar vs New Zealand Dollar 100,000 0.01 0.01
AUD/USD Australian Dollar vs US Dollar 100,000 0.01 0.01
EUR/AUD Euro vs Australian Dollar 100,000 0.01 0.01
EUR/CAD Euro vs Canadian Dollar 100,000 0.01 0.01
EUR/CHF Euro vs Swiss Franc 100,000 0.01 0.01
EUR/GBP Euro vs Great Britain Pound 100,000 0.01 0.01
EUR/JPY Euro vs Japanese Yen 100,000 0.01 0.01
EUR/NZD Euro vs New Zealand Dollar 100,000 0.01 0.01
EUR/USD Euro vs US Dollar 100,000 0.01 0.01
GBP/CHF Great Britain Pound vs Swiss Franc 100,000 0.01 0.01
GBP/JPY Great Britain Pound vs Japanese Yen 100,000 0.01 0.01
GBP/USD Great Britain Pound vs US Dollar 100,000 0.01 0.01
NZD/USD New Zealand Dollar vs US Dollar 100,000 0.01 0.01
USD/CAD US Dollar vs Canadian Dollar 100,000 0.01 0.01
USD/CHF US Dollar vs Swiss Franc 100,000 0.01 0.01
USD/JPY US Dollar vs Japanese Yen 100,000 0.01 0.01

Minor pairs

Symbol Description Lot size Minimum volume Volume step
CAD/CHF Canadian Dollar vs Swiss Franc 100,000 0.01 0.01
CAD/JPY Canadian Dollar vs Japanese Yen 100,000 0.01 0.01
EUR/NOK Euro vs Norwegian Krone 100,000 0.01 0.01
EUR/PLN Euro vs Polish Zloty 100,000 0.01 0.01
EUR/SEK Euro vs Swedish Krona 100,000 0.01 0.01
GBP/AUD Great Britain Pound vs Australian Dollar 100,000 0.01 0.01
GBP/CAD Great Britain Pound vs Canadian Dollar 100,000 0.01 0.01
GBP/NOK Great Britain Pound vs Norwegian Krone 100,000 0.01 0.01
GBP/NZD Great Britain Pound vs New Zealand Dollar 100,000 0.01 0.01
GBP/SEK Great Britain Pound vs Swedish Krona 100,000 0.01 0.01
NZD/CAD New Zealand Dollar vs Canadian Dollar 100,000 0.01 0.01
NZD/JPY New Zealand Dollar vs Japanese Yen 100,000 0.01 0.01
USD/CNH US Dollar vs Chinese Renminbi 100,000 0.01 0.01
USD/MXN US Dollar vs Mexican Peso 100,000 0.01 0.01
USD/NOK US Dollar vs Norwegian Krone 100,000 0.01 0.01
USD/PLN US Dollar vs Polish Zloty 100,000 0.01 0.01
USD/SEK US Dollar vs Swedish Krona 100,000 0.01 0.01
USD/ZAR US Dollar vs South African Rand 100,000 0.01 0.01

Exotic pairs

Symbol Description Lot size Minimum volume Volume step
AUD/SGD Australian Dollar vs Singapore Dollar 100,000 0.01 0.01
CHF/JPY Swiss Franc vs Japanese Yen 100,000 0.01 0.01
EUR/HKD Euro vs Hong Kong Dollar 100,000 0.01 0.01
EUR/ILS Euro vs Israeli New Shekel 100,000 0.01 0.01
EUR/MXN Euro vs Mexican Peso 100,000 0.01 0.01
EUR/SGD Euro vs Singapore Dollar 100,000 0.01 0.01
EUR/TRY Euro vs Turkish Lira 100,000 0.01 0.01
EUR/ZAR Euro vs South African Rand 100,000 0.01 0.01
GBP/SGD Great Britain Pound vs Singapore Dollar 100,000 0.01 0.01
GBP/TRY Great Britain Pound vs Turkish Lira 100,000 0.01 0.01
HKD/JPY Hong Kong Dollar vs Japanese Yen 100,000 0.01 0.01
NZD/CHF New Zealand Dollar vs Swiss Franc 100,000 0.01 0.01
NZD/SGD New Zealand Dollar vs Singapore Dollar 100,000 0.01 0.01
SGD/JPY Singapore Dollar vs Japanese Yen 100,000 0.01 0.01
USD/HKD US Dollar vs Hong Kong Dollar 100,000 0.01 0.01
USD/ILS US Dollar vs Israeli New Shekel 100,000 0.01 0.01
USD/RUB US Dollar vs Russian Ruble 100,000 0.01 0.01
USD/SGD US Dollar vs Singapore Dollar 100,000 0.01 0.01
USD/THB US Dollar vs Thai Baht 100,000 0.01 0.01
USD/TRY US Dollar vs Turkish Lira 100,000 0.01 0.01

How to read the contract specifications table

The Forex is typically traded in lots. One standard lot is equivalent to 100,000 units. Each time you open a position on a currency symbol, you can start with a minimum transaction of 0.01 lots.

For information about Forex leverage refer to our Margin Policy.

Important notes on our swap rates (overnight funding)

If you keep any positions open overnight, an interest adjustment will be made to your trading account as indication of the cost required to keep your position open.

This interest adjustment (or swap rate) is based on interbank lending rates, on top of a 2% fee.

The interest adjustment is calculated in ‘points’ – meaning we will convert the relevant interbank lending rates to ‘points’ in the base currency.

Please take note that our swap rate also depends on the time and days you hold your positions open:

  • You will be subjected to swap rates if you keep a position open past 23:59:59 GMT.
  • Positions that are still open on Wednesday at 23:59:59 GMT will be charged three times the swap rate to account for weekends – a standard practice for all Forex brokers.
  • Our swap rate may also be adjusted to take holidays into account.

Our Company

Education

Banking

Trading

Partner With Us

In the EU, financial products are offered by Binary Investments (Europe) Ltd., W Business Centre, Level 3, Triq Dun Karm, Birkirkara, BKR 9033, Malta, regulated as a Category 3 Investment Services provider by the Malta Financial Services Authority (licence no. IS/70156).

Outside the EU, financial products are offered by Binary (SVG) LLC, Hinds Building, Kingstown, St. Vincent and the Grenadines; Binary (V) Ltd, Govant Building, Port Vila, PO Box 1276, Vanuatu, regulated by the Vanuatu Financial Services Commission (view licence); Binary (BVI) Ltd, Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands, regulated by the British Virgin Islands Financial Services Commission (licence no. SIBA/L/18/1114); and Binary (FX) Ltd., Lot No. F16, First Floor, Paragon Labuan, Jalan Tun Mustapha, 87000 Labuan, Malaysia, regulated by the Labuan Financial Services Authority to carry on a money-broking business (licence no. MB/18/0024).

This website’s services are not made available in certain countries such as the USA, Canada, Hong Kong, Japan, or to persons under age 18.

The products offered via this website include binary options, contracts for difference (“CFDs”) and other complex derivatives. Trading binary options may not be suitable for everyone. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, the products offered on this website may not be suitable for all investors because of the risk of losing all of your invested capital. You should never invest money that you cannot afford to lose, and never trade with borrowed money. Before trading in the complex products offered, please be sure to understand the risks involved and learn about Responsible Trading.

In the EU, financial products are offered by Binary Investments (Europe) Ltd., W Business Centre, Level 3, Triq Dun Karm, Birkirkara, BKR 9033, Malta, licensed and regulated as a Category 3 Investment Services provider by the Malta Financial Services Authority (licence no. IS/70156).

In the Isle of Man and the UK, Synthetic Indices are offered by Binary (IOM) Ltd., First Floor, Millennium House, Victoria Road, Douglas, IM2 4RW, Isle of Man, British Isles; licensed and regulated respectively by (1) the Gambling Supervision Commission in the Isle of Man (current licence issued on 31 August 2020) and by (2) the Gambling Commission in the UK (licence reference no: 39172).

In the rest of the EU, Synthetic Indices are offered by Binary (Europe) Ltd., W Business Centre, Level 3, Triq Dun Karm, Birkirkara, BKR 9033, Malta; licensed and regulated by (1) the Malta Gaming Authority in Malta (licence no. MGA/B2C/102/2000 issued on 01 August 2020), for UK clients by (2) the UK Gambling Commission (licence reference no: 39495), and for Irish clients by (3) the Revenue Commissioners in Ireland (Remote Bookmaker’s Licence no. 1010285 issued on 1 July 2020). View complete Regulatory Information.

Binary.com is an award-winning online trading provider that helps its clients to trade on financial markets through binary options and CFDs. Trading binary options and CFDs on Synthetic Indices is classified as a gambling activity. Remember that gambling can be addictive – please play responsibly. Learn more about Responsible Trading. Some products are not available in all countries. This website’s services are not made available in certain countries such as the USA, Canada, Hong Kong, or to persons under age 18.

Trading binary options may not be suitable for everyone, so please ensure that you fully understand the risks involved. Your losses can exceed your initial deposit and you do not own or have any interest in the underlying asset.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.6% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Binary Options Trading Strategies

Trading with Binary Options

Binary Options, known also as Digital Options or All-or-Nothing Options are not new financial instruments, but thanks to the new technologies, these are now available to the public and present an easier and faster way to make money.

The Digital option term derives from the digital nature of electronic devices which have only two states of being, “on” or “off” as with digital options trading.

When you hold a digital option, you are either in an ―On‖ state indication which means you are in the money or in an ―Off‖ state implying you are out of the money.

The value of the payout (Some brokers offer up To 85% return) is determined at the onset of the contract and does not depend on the magnitude by which the price of the underlying asset moves, so whether you are in the money by $0.01 or $0.05, the payout that you receive will be the same.

Binary Options are sometimes called all-or-nothing trades, meaning that either you are In-The-Money (ITM) and you get the specified payout, or you are Out-of-the-Money (OTM) and you lose your traded amount.

Binary options trading are a fast and exciting way to trade the financial markets. The payout rate trading digital options is high in comparison to any other traditional financial trading.

From the buyer’s perspective, the main advantage of binary options trading is that the Risk taken is limited to the premium that the trader pays up front to take on a binary option position. So in above example, the Risk taken by the trader is limited to $100 in that particular position.

This benefit means that the binary options trader can feel secure in knowing that their downside is limited to their initial trade size. While they can still profit if their market view turns out to be correct, they avoid having to worry about stop loss order slippage or losing their trading discipline.

Furthermore, binary options are a simpler trading vehicle having a limited risk profile since they either pay off a fixed amount or they do not, depending on where the underlying instrument is trading at the binary option’s expiration.

Another advantage is that binaries can often be traded for shorter time frames (1 hour, ½ hour or even 15 min) via binary options trading platforms then are typically available for normal options offered by exchanges.

Several types of Binary Options can now be traded online using a variety of binary options trading strategies.

High/Low: The most commonly available binary options are “High/Low” also known as “Above” and “Below” or “Call/Put” binary options. Basically, a trader will receive a payout on a long binary option if the market is higher than the strike price of an above binary at expiration, or under the strike of a below binary.

Fr om the buyer’s perspective, the main advantage of binary options trading is that the Risk taken is limited to the premium that the trader pays up front to take on a binary option position. So in above example, the Risk taken by the trader is limited to $100 in that particular position.

This benefit means that the binary options trader can feel secure in knowing that their downside is limited to their initial trade size. While they can still profit if their market view turns out to be correct, they avoid having to worry about stop loss order slippage or losing their trading discipline.

Furthermore, binary options are a simpler trading vehicle having a limited risk profile since they either pay off a fixed amount or they do not, depending on where the underlying instrument is trading at the binary option’s expiration.

Another advantage is that binaries can often be traded for shorter time frames (1 hour, ½ hour or even 15 min) via binary options tradingplatforms then are typically available for normal options offered by exchanges.

Several types of Binary Optionscan now be traded online using a variety of binary options trading strategies.

High/Low:The most commonly available binary options are“High/Low”also known as“Above” and “Below”or“Call/Put”binary options. Basically, a trader will receive a payout on a long binary option if the market is higher than the strike price of an above binary at expiration, or under the strike of a below binary.

One Touch:Some online binary options trading platforms also offer“One Touch”above or below binary options that generate a payoff as soon as their trigger level trades in the underlying market… even before the expiration time.

Boundary:Another popular type of binary option is the“Range or Boundary”binary that is characterized by a range that is compared to the underlying market at the option’s expiration. Typically, an ―in‖ range binary pays off if the market ends up inside the range, while an ―out‖ range binary pays off if the market ends up outside the range.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners!
    Big Sign-Up Bonus!
    Free Trading Education!
    Free Demo Account!

  • Binomo
    Binomo

    Only For Experienced Traders!

Like this post? Please share to your friends:
Binary Options Trading Secrets
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: