Binary Options Trading for Forex Trader
A Forex trader may find the area of binary options rather unfamiliar. Actually, it is quite simple for someone who has already been trading currencies to transfer to binary options trading. The main reason is that there are many similar principles that can be transferred from one area to another. This fact makes binary options a popular second choice for people who already have experience in Forex trading. Below you will find some quick guide that aims to make it easier for you to switch from Forex trading to binary options trading:
Make an easy start
We suggest that you start options trading with the EUR/USD pair like in the Forex market because the switch will be least painful. Also, starting with this pair will ensure more success than something else that you do not know. One thing that a new binary options trader must keep in mind is the importance of time.
It is hard for a Forex trader to make 100 trades per day, but things are different in binary options thanks to the increasing popularity of 60-second options. If you used to make only a few big trades each day, you ought to use this method.
It is not a good idea to go from a carefully-planned approach where you only make 5 trades each day to another approach where you will be making 50 trades each day with 60-second or 5-minute options. We advise you to stick with the assets you know best as well as the time-frame that you know. You can read more about getting into binary options trading here.
In the forex market, if you are a regular trader of the USD/JPY pair, chances are that you will find this pair making the most movement, during the Asian trading day. Then make many trades in the Asian during day, not the European business day. One thing about binary options that many brokers do not realize is that they move in real time, so they do not try to advertise trading volumes in their platform. As a result, traders often forget the importance of choosing a better time for trading.
Start by choosing time periods the same way you did in forex trading. Get to know the time when your asset moves the most and prepare yourself when the time comes, so that you can make as much profit as possible from the time advantage.
Choose a Trade
It is not a good idea to commit to trading a currency that always moves very little. Instead, you should invest your money into trades with higher potential – those that move a lot and as a result have a better chance of winning. Once you have done this, you will realize that you are making more money with fewer trades each day, thanks to the probability of success of those few trades.
It is more important to improve the accuracy of your trades than to making multiple trades each day with very modest profits. Five accurate trades per day that together get you $500 is obviously more desirable than 20 less accurate trades per day that only get you $200; it generates much more profit yet with less effort.
Try different trading types
Binary options trading is not always about currency movement: there are of course other types of assets, which you should try out once you have learned enough in currency trading. Visit this page to find out yourself which brokers out there provide traders with the largest amount of assets to go with. Although trying out other types of asset means doing more research, in some cases you should still be able to predict correctly with little work.
Let’s take the pair of USD and gold for example. An experienced trader should be able to recognize the contrary movement of the two assets: the price of USD increases and the price of an ounce of gold will usually decrease. In this case, if you stick to trading currency, you will miss this lucrative opportunity. Another example is the relationship between a nation’s currency and its major stock indices, which are available for trading on virtually all brokers’ platforms available out there.
Never Be Complacent
Like we said, never be complacent. Even if you were an experienced trader, trading would never get easier for you. Therefore, you must strive to learn more and improve your techniques. No matter how much time and effort you put into trading, the truth is, you would never fully master the field.
There will be moments when you realize that you are wrong. But don’t worry, learn from those moments and avoid making the same mistake twice. You can refer to this page for some common mistakes that most traders often make.
Forex traders should see binary options trading as the golden opportunity to make their job less boring. Keep in mind all the skills and tips we give you and apply them when you trade, and we believe you will become a good binary options trader soon. To start Binary Options trading, click HERE to check out our recommenced binary options brokers.