Forex Binary Options

Written by Himanshu Jain

FX binary options - up or down?0 or 1, Yes or No, This or That. Only Two Options = Binary Options.

In a trading market the options translates into "Up" or "Down". The options with the price-movements are only two. The price can either go up or down. Hence Forex Binary Options trading is nothing but analyzing the probable direction of price movement i.e. up or down and taking a position just for the direction. Whether the prices will go up in the selected time period or will go down is what the binary options trading is all about.

The normal Forex trading is about buying and selling by putting in own money. Forex binary options trading is like being in the audiance and putting money on the possible performance of the show.

Let's try to see how the option trading differs from the conventional trading:

Differences

Forex trading as such involves the following:

  • Analyzing the price action and decide whether the market will move up or down.
  • Depending on the analysis enter the market at a specific price level for buying or short-selling.
  • Decide about the stop-loss levels
  • Decide about the profit target or exit level.
  • Keeping any eye on the market as sometimes it may be better to close the position before the decided exit levels.

Forex binary options trading involves the following:

  • Analyzing the price action and decide whether the market will move up or down.
  • Take a position and forget.

Please also check Forex versus Forex binary options trading.

Options are not about "How much?"

Forex binary options - market direction

Binary options trading is only about analyzing and deciding about the possibilities about the direction of the price movement in a predetermined time period. Binary options have got nothing to do with "How much" but only about "which direction". A binary option trader can earn a substantial amount even if the prices move just by a fraction of pip. In other words we can earn an amount just by a move of 1 pips or less which may need a move of a lot of pips in the conventional Forex trading. In other words in binary options trading we do not trade "IN" the market but we trade "ON" the market. In simple words we can say that we bet on the market.

Binary options resources

 

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