The difference between Binary options and Forex.

In the last few years, binary options have become more and more popular. A lot of investors have become interested in binary options because they’re comparably safer and easier to understand than Forex Trading. But what are the exact differences between binary options and Forex Trading? This article gives you the low down. The first difference between binary options and Forex trading is in what they actually are. With binary options, you will just have to predict whether an asset will go up or down in price. For example, if you expect a price to go up within a certain time frame, you just put a call option on the asset. You then check back with the asset after the set time frame, and if it actually went up, you reel in a profit. Forex trading is different because you will actually have to predict the actual future price of the asset. You’ll only reel in the profit if the asset will go up or down to the price you predicted. Secondly, Forex trading uses margin. You use a lever to make your potential profit, whereas you do not use a margin with binary options. The upside of the absence of a margin is that there is not margin call. Thirdly, with binary options you actually know your profit upfront. This is also possible with Forex trading, because you can limit which profit you want with limit/stop orders. Finally, Forex trading closes on a certain profit or loss. This makes it very solid in terms of what you can expect regarding your investment. Binary options are different because it...

A Rapidly Changing Currency Exchange Market

With major economic news on multiple fronts the currency markets promise to be very active. The USD is poised for movement against major currencies based on impending spending cuts in excess of $85 Billion that look likely to slow growth in the US substantially if not move it into recession. This will in turn slow many global economies if goes as widely predicted. In Europe the GBP has been under review for several months by major credit rating agencies and it is appearing likely to lose its AAA rating. Being such a large player in the European market it could easily effect the value of the Euro as well. As always when you trade FX, you must look at both fundamentals such as inflation and production for indicators of a currency strength as well as the technical indicators to show trending. These basics will help you make proper analysis of what currencies should do. In a volatile market (as this is expected to become in the next few weeks) as fallout from the US economy go from predictions to actualities certain market realities must be considered. The two most important are: 1. Predictions of political fallout are only that: predictions. The market and the economy do not always actually do what is predicted. 2. Currencies do not always react exactly as they should based on relevant indicators. Trading pressure and perception also move the valuation of one currency against another. Taking these two facts into consideration when planning a trading strategy in a volatile market is essential. Though any fundamentally sound and disciplined strategy can make profits in this market...

Choosing the Best Time Frames to Trade Forex Within

There are many different time frames to choose from, when trading currencies. Different ones will suit different Forex traders, with each one presenting different opportunities to the next. It is important to choose the best time frame for you to trade Forex within, so that you can maximize your chances of success and your profits too. Since there are many trading sessions with different markets being more active during different times, a Forex trader should be aware of their own time zone when choosing currency pairs to trade and time frames to trade within. There are many different time frames that you can trade within. The one that you trade Forex within, will ultimately depend on your Forex trading strategy. For example, if you are a scalper, you will most likely trade within 1 minute time frames. Whichever one(s) you decide to trade currencies within, you should try to look at the bigger picture too. Remember that it is important to take into account the Forex market’s overall trends, so that you can be aware of where the market is heading. Of course if you are a scalper, you probably won’t be interested in this since you will be trading within extremely short-term time frames. As a scalper, you won’t really be that interested in looking at wider ones since you will be placing many orders each day. However, if you use a swing trading strategy or another medium-term trading strategy or even a long-term trading strategy, you should really study wider time frames too. If you ever find it difficult to profit using the ones that you choose...

Looking at Larger Time Frames in Forex Trading

It is important to look at time frames larger than the ones that you have chosen to trade in. Many Forex traders decide to just focus in on their chosen time frames, but this is just being narrow-minded. Time frames in Forex trading are important and you should definitely choose good ones that are the best, most suitable and most appropriate for you and your Forex trading strategy. However, you shouldn’t just ignore other time frames, because it’s a good idea to get the bigger picture. Too many Forex traders ignore ones that they don’t work within; they don’t look at them at all and as a result, they don’t look at the bigger picture. This is of course not ideal. Now admittedly, this doesn’t include scalpers and day traders. Scalpers for example, can often be in and out of single trades in seconds, so there’s no real need for those using these types of Forex trading strategies to look at the bigger picture. The majority of traders and investors in the Forex market though, don’t use scalping strategies. Beginners definitely shouldn’t scalp the currency market, since it can be very difficult to scalp successfully without a lot of previous Forex trading experience. So, if you don’t scalp or use a day trading strategy of some sort, then you should definitely be looking at the bigger picture. By looking at wider time frames, you will be able to see what the prices of the currency pairs you are trading are really doing in the long run and what direction they are actually moving in long-term. By doing this, you...

Whether Technical Analysis is More Effective in the Short Run or Long Run

Some believe that technical analysis can be used in the both short run and long run, but the vast majority of Forex traders only use it in the short run. Generally, this type of analysis is better suited to those who use more short-term Forex trading strategies, but if you are looking for long-term profits only, it doesn’t mean that you can’t use technical analysis too. Technical analysis is all about studying price action through various charts and graphs. Most technical traders focus on making shorter-term profits, such as scalpers and swing traders. Forex traders who look for more short-term profits, tend to try and exploit technical analysis more often because it is much more accessible. In fundamental analysis, you have to wait for key economic data and such to be released, but with this kind of analysis, you can simply open up a chart  or graph and start looking for trends immediately. Scalpers for example, would look at price charts and graphs for the currency pairs they are trading, with very tight set time frames – some Forex traders even use time frames as tight as a few seconds. Technical analysis is flexible though; you can still look for long-term opportunities using this type of analysis. For example, you might just set the time frame of your price action charts and graphs for the currency pairs you are trading, to maybe 6 months. By doing this, you will be able to spot longer-term price action trends and patterns. This is one of the most easiest ways you can make money in the Forex market; all you have to...

Using Bar Charts in Forex Trading

Bar charts are the commonly used type of chart in Forex trading. They are used by many Forex traders and they can be effective if used properly. Forex bar charts, just like other charts of this type, have two notches on them. The left notches represent the opening prices of the currency pairs in question and the right notches represent the closing prices of them. The edges of each bar on a Forex bar chart, represent the highs and lows of the currency pair prices in question. Bar charts unfortunately don’t bear many advantages over other types of charts used by Forex traders. However, some traders and investors in the Forex market, prefer to use them over other kinds of charts. When using charts to watch the market for currencies and the price actions of the currency pairs you trade, really all you need to do, is use a chart that works for you and you are familiar with. There is no point in using a particular type of chart, just because every other Forex trader does. More experienced currency traders do tend to use candlesticks however, which are somewhat similar to bar charts but present more advantages. When comparing bar charts to candlestick charts, you will notice that bar charts can actually make the process of interpreting data much more slower for more experienced Forex traders. This is why more experienced traders and investors generally move onto using candlesticks in Forex trading, once they feel that they are competent enough with the technical aspect of Forex trading in general. Many beginners first start out using line charts in...