What are Binary Options and CFD? (CFD = Contract for Difference.)
ToppTrading’s 10 recommendations for new CFD/FOREX and Binary Option traders.
Trading with CFD’s/FOREX and BINARY OPTION can be extremely risky, and a significant amount of money can be lost in a few minutes. It is advisable to exercise caution.
1. NEVER trade for more than you can afford to lose.
2. Start your new trading career by opening a demo account, or two, in order to get some trading experience before you start trading with your own money.
3. In order to become a successful (spare time) trader, meaning gaining more than you lose, there is some important recommendations (rules) you need to consider:
- timing and common sense.
- Never go against the market.
- Most important: Don’t get greedy.
4. Make a trading plan and stick to it. Meaning, make up your mind on what you want to trade, you can’t trade on everything. E.g. find 4 to 6 stocks – pairs – commodities or indexes you want to follow and stick to those.
5. Start your trading session by reading the financial news and the economic calendar for the day.
6. Don’t trade more than 2 – 3 times a week
7. Never trade if you are tired – in a bad mood – have been drinking alcohol – taking drugs – etc.
8. Always consider to use stop/lost (if available) to avoid excess losses.
9. If you trade with leverage, make sure you understand how it works before trading.
10. The more you know (learn) about trading with CFD’s/FOREX or BINARY OPTION the bigger are your chances for becoming a successful long time winner.
binary options Trading
Binary options trading may be a undemanding approach to profit on the net, “binary” signifies “having two sections” and trading binary options frequently embrace simply two speculation potential outcomes from that to choose. Once you place resources into a Binary Options, you may be paid a settled measure money toward the end of the day and age supported within the venture understanding otherwise you lose all the cash you place resources into the binary options.
The word binary trading stands for “having 2 parts”. usually speaking, all you would like to try and do is predict either decision “Buy” or place “Sell”. Binary Option trading has solely two investment potentialities for you to predict and so choose from. Up or Down.
One investment possibility is expressed when you predict that the price of the asset, E.g. USD, will rise. This type of investment is named “Call” option. The other possibility is presented when you predict that the price of the asset, E.g. USD will fall. This type of investment is named “Put” option.
Choosing an asset is the first step of your investment. For instance, if you have an interest in gold prices, you may choose to place a binary investment in gold. Obviously, the more familiar you’re with the gold market the better your chances are of successfully predicting the fluctuations of gold prices.
To see the and follow the price on the various asses (currency’s – Stocks – Oil – Gold etc.) You will need a price chart like this: http://bit.ly/296i1Zm. You can use the same price chart whatever to are trading binary options or CFD’s or Forex.
The reason why these types of financial trades have become so hugely popular is that traders only have to make just one of two possible decisions. When placing investment, that being yes or no decision which in Binary Options trading are known as Put “Buy” or Call “Sell” trades.
Trading with binary options on the Internet, takes place on trading platforms – you do not have to download anything; the trading takes place directly on the internet with only 2 trading options: Will the rate go up or down (buy or sell). Traders needs to understand the risks and rewords of trading and it is not the traditional way of trading.
You can trade with binary options in currencies, shares, commodities (gold, silver etc.) as well as indexes. Trading currency online, commodities referred to as “Forex trading” or simply “FX trading”.
Trading within BINARY OPTION or CFD’s is straightforward. There are only two options; will the currency, go up? Or will it go down?
if you put in USD $10 thinking that the Euro will rise against the US dollar within a certain period (timeframes/maturity can be for example 30 seconds – 60 seconds – 5 minutes etc.). IF your prediction is correct? Then you will have a profit between USD $6 and $9. (60 to 90% of your investment.)
EVERYBODY, regardless of education, (or lack of education), age, sex and background, can learn to trade with BINARY OPTIONS and CFD’s (Contract for Difference.)
ALL you need in order to get a reasonable profit return is discipline, patience, concentration, timing and, importantly, common sense. (Well, okay, asking for common sense might mean that not everyone can learn how to trade with binary options, maybe in particular politicians whom often seems to be lacking common sense).
WHAT IS CFD TRADING?
The word CFD means contract for distinction. CFD trading permits you to take a position on the estimation of an instrument (E.g. USD.) and anticipate whether it will rise or fall. It’s vital to recollect that as a subordinates item, you don’t really possess the basic resource straightforwardly. This spares you from conventional physical managing costs, for example, UK Stamp Duty, and all you are doing is basically exchanging on the development of basic costs.
CFD trading permitting you to boost your market introduction for just a little division of the speculation you would commonly need to exchange the basic resource straightforwardly.
The agreement itself is an assention between two gatherings to trade the contrast between the opening and shutting cost of the instrument, henceforth the term ‘contract for distinction’.
CFD trading explained
Unlike conventional forms of trading, CFDs enable you to profit from falling markets as well as rising ones.
If you believe the price of an asset is going to rise, you go long or ‘buy’ and you’ll profit from every increase in price.
If you believe the price of an asset is going to fall, you go short or ‘sell’ and you’ll profit from every fall in price. Of course, if the markets don’t move in the direction you expect, you’ll suffer a loss.
So, if you believe for example that Appel’s share price will fall in value, you simply go short “Sell” on Apple share CFDs and your profits will rise in line with any fall in price below your opening level. However, should Apple’s share price actually rise, you would suffer a loss for every rise in price. How much you profit or loss will depend on your position size (lot size) and the market price movement.
The ability to go long “Buy” or short “Sell” along with the fact that CFDs are a leveraged product makes it one of the most flexible and popular ways of trading short term movement in financial markets today.
How to set Stop – loss ?
Stop – loss setting is a very important and absolutely necessary tool to use when you trading FOREX or CFD Trading.
Stop losses not only help you limit your losses and help you move on, they also eliminate the anxiety caused by losing on an unplanned trade.
There are different ways to set “Stop – Loss”
We highly recommend you to learn more from here: http://www.babypips.com/school/undergraduate/senior-year/setting-stop-losses
How to Analyze Ranges with RSI?
In between times of market volatility, traders may find extended periods where currencies are trading sideways. These periods are defined as a ranging market and seen on the graph as trading between established levels of support and resistance. Below we can see an example of a defined 46 pip range range on the CADCHF currency pair. Our pertinent price points include resistance at current highs near .9715 and support at a price level near .9669. With these areas defined we can then proceed with a trading plan to trade these pricing levels. For this we will once again turn to the RSI oscillator.
Yesterday we discussed using RSI in trending conditions. But the truth is, that RSI can be used just as well in a range . In a ranging market we want to time our entries when support/resistance points line up with RSI and overbought/oversold conditions. Timing is key, and we can see on the graph below that the previous trading signal allowed us to sell resistance as RSI moved from overbought levels. A s price declines traders can look for a fresh signal to buy the
CADCHF at support if RSI becomes oversold.
The great thing about ranging markets is that you do not have to have a specific market or trend bias. Traders have the ability to trade the range until price breaks out from support and resistance levels. Due to the possibility of a breakout, range traders can use half the distance of the current range to asess potential stop levels. In this example traders would look to keep a minimum stop of 23 pips from their point of entry.
Using the RSI with the chart mentioned above, my preference is to buy the CADCHF on a return from oversold levels near .9668 or better. New orders can target range resistance at .9715 with stops placed outside of support as described above. Depending on where RSI creates a signal to buy, traders can then extrapolate a 1:2 or better Risk/Reward level. Alternatives include price breaking out of the mentioned range.
You can trade with BINARY OPTIONS and CFD’s in currencies, shares, commodities (gold, silver etc.) as well as indexes.
What does it mean to be “trading with BINARY OPTIONS or CFD’s”? Trading with BINARY OPTINOS and CFD’s is all about being able to predict e.g. a foreign currency/price-development within a given timeframe. It could, for example, be the ability to predict whether the dollar is going to rise or fall within the next 60 seconds or within the next five minutes as compared against another currency. It’s that simple. (See video.)
Let me stress right at the beginning! Trading in BINARY OPTIONS and CFD’s is not a science that requires special skills such as calculations or being good at math. Trading binary options ONLY requires common sense and a good portion of patience.
Choosing Broker for binary options trading
You can download our E-book that is very effective guide for beginners to learn how to make money from trading in Binary Options. That is why much of such unnecessary detail and unimportant “noise” is omitted from this book. In short, this book focuses on teaching you how you trade with binary options on the Internet. Neither more, nor less.
At some point, when you feel that you have the necessary knowledge on binary options trading (and I do recommend that you read the entire book and can answer all the questions first), your first step of action will be to open a trading account. You will need to find a serious binary option broker. This is not necessarily an easy feat, especially not for anyone new to binary options trading.
Whatever you want to trade LIVE online with BINARY OPTIONS or CFD’s or FOREX the most important part is choosing best BROKER and below given are our best recommended brokers. Click on the banners given below and check out the BINATY OPTIONS or CFD’s trading platforms from different companies. The most important decision is choosing the right CFD brokers for trading and we have made this task easy for you, as the companies’ banners given below are most trusted and reliable.
Unless you are a natural talent, it requires plenty of time and practice to become good at anything. The same goes for trading with binary options on the Internet. If you want to be good, keep practicing.
You can compare learning to trade with BINARY OPTIONS and CFD’s to that of learning to drive a car. EVERYBODY can learn trading.
When you start out learning how to drive a car, you don’t need to know how you build a car engine, how you replace the brakes etc. There are, naturally, some ground rules that you need to learn in order to drive, such as where is the steering wheel, which pedal to use for what, how to accelerate, etc.
The same is true for trading with BINARY OPTIONS and CFD’s – you don’t need to learn or know about all kinds of trivial detail such as what, whom or how. That is why much of such unnecessary detail and unimportant “noise” is omitted from this book.
In short, EVERYONE, skilled as well as unskilled workers, regardless of age, background and gender, all over the world. CAN learn to trade BINARY OPTIONS and CFD’s.
On the http://www.topptrading.com/ homepage you will find a number of links to websites where you can read more about Online trading currency with binary options (Forex), a number of free courses, links etc. (most of these are in English).
Much of the research on how people trade, undertaken by the large trading houses and experts in financial trading tools (stock traders, option traders, currency traders) has shown that, by and large, most people tend to base their trading on emotions and belief, and less on common sense and knowledge. This tendency applies to professional traders as well as the average person that is trading. Obviously, trading based on emotions and belief will mean that you are doomed to lose in the long run.
When you trade on financial markets, there are certain ground rules that you have to follow, and in particular if you want to be successful and belong to the winning team. I will tell you one of these ground rules:
Greed is the biggest danger when you are trading in finances. That’s right. Take care that you do not become greedy. If it happens, you can be certain to lose, if not now, then in the long run. It is not just 100% it is 200% certain. If nothing else, NEVER become greedy.
Trading with BINARY OPTIONS and CFD’s on the Internet is not without a certain amount of risk of losing your hard-earned savings. And the same goes for trading in shares and commodities. In order to become successful in trading with binary options, shares, currency etc. it is absolutely essential that you develop a solid forex CFD trading strategies.
The same goes for a sensible “money management” strategy. It is recommended that you never enter into a trade at more than 2 to a maximum of 5 percentage of the total value of your trading account. If, for example, you have USD$ 200 in your account, you should never go above USD $10 for each trade.
How Binary Option Trading Differs from CFD Trading.
When most of us make the decision to start trading binary options, we do a lot of research on the different styles of trading. There’s no doubt that there is a lot of choice in today’s world when it comes to selecting one that works for you. Whether you’re new to binary trading or not, it’s really important that you understand the differences between each type so you know which one is best to help you meet your financial objectives.
Contracts for Difference (CFD) trading consist of a contract between the broker (seller) and trader (buyer) where the broker pays the difference between the value of the asset at the strike price and its value after the contract is closed. If the difference is negative, then the buyer pays instead to the seller. CFD trading is often used to speculate on markets without the need for ownership of the underlying assets.
CFDs are currently available across a range of countries including the UK, Canada, Hong Kong and a number of European countries. They are not permitted in a number of other countries—including the United States, due to restrictions by the US Securities and Exchange Commission on over-the-counter (OTC) financial instruments.
Binary Options & CFDs
Since you are able to profit from rising or falling market conditions, many people believe that they are similar – or even exactly the same – as binary options. However, there are some important differences that you need to be aware of.
Like options, you do not actually own the asset, so you don’t need to worry about when to sell. Your responsibility is limited to agreeing to the CFD contract which stipulates when the contract will end and any profits assessed.
Additionally, with CFD and BINARY OPTIONS trading, you don’t need to have a lot of money to begin trading. You can place fairly small sums of money in both instances. Both styles of trading are also geared towards shorter time periods in comparison to traditional trading methods. If you trade with CFDs or binary options, you’ll typically select a timeframe of anywhere from a minute, 5 minutes etc. to an hour or even weeks.
With regards to the differences between the two, there are a number of them. First of all, when you trade binary options, you’ll have a fixed amount of risk per contract but with CFDs you can instruct your broker to use leverage in your trades. This means that your risks can be inflated if you are unsuccessful in your predictions.
These exclusive resources, gettable in a very big selection of languages, not solely function nice instructional tools however provide a really intimate method of learn trading online. Participants area unit exposed to a large vary of online trading techniques and methods. Don’t miss your probability to listen to what the trading specialists have to be compelled to say.
Also, a Markets.com representative is available via Live Chat to answer your questions.
Register with one of the brokers below and start fulfill your dreams.
Click on the banners and check out the online trading platforms, offers of different CFD And Binary Options brokers companies, commitment free. The Binary Option and CFD brokers you will find here on topptrading.com are all government authorized and controlled. (E.g. by CySEC, Cyprus Etc.)
(From this website, it’s 100% free and no commitment is needed to open a cfd trading “live” or a demo account)