Binary Option Indicators - PROFXINDICATORS
The exchange model is a very new approach to mainstream binary options. Classical options exchanges such as the Chicago Board Options Exchange are not very accessible to regular traders because of the complicated contracts they sell and the high requirements. This is why retail providers of binary options chose the broker model, since it was easier to build and very profitable. Hundreds of binary options brokers flooded the market trying to attract clients, but none of them offered something different because the broker model was the easy way to do it.
You cannot place a trade whenever you desire, even if your trading strategy provides you with a decent entry. Additional precautions must be taken to ensure the outcome of the established trade. There are hundreds of trading strategies but we will attempt to provide a universal guideline that anyone can employ.
Binary options – are electronic contracts with a fixed high yield. Thanks to binary options, it is possible to earn on stocks of various companies, commodities, currencies, and not only on the rise of their rates, but also on the fall. It is an opportunity to earn a lot of money just by determining whether the market rate of an asset will go up or down. The whole principle of trading is very simple, and there is no need to install any programs.
Market risk. Like any other type of financial activity, for example, Forex, Binary options also have an element of unpredictability, that is, the market can move in any direction, often without even signaling the upcoming change in its direction. There are analytical methods which allow forecasting a potential trend with high accuracy, but even the most thorough analysis will not give a one hundred percent guarantee that the market will move in that direction. The probability that the forecast will be wrong is always there, but it is minimal in case of a qualitative analysis. Fixed/limited income. In binary options risks there is the limited maximum profit, this should not be forgotten by beginners. Binary contracts are characterized by limited losses as well as profits, that is, when you make a deal, there is always an upper limit of profit, and above it cannot rise in any way. But this could also be a risk free binary options strategy, as you can know your risks and almost control them. The trader can be separated from profit or from loss by only a few points. In this type of contracts, the number of points passed does not affect the amount of profit, but its profitability can be determined by only three or four decimal places. The fact that the price is at least for 0.0001% higher or lower than the set value is important in binary trading. Illiquidity. Binary options are difficult to call a liquid instrument, so traders cannot close a trade already open and take their funds whenever they want, even if they see that the market is going against them. When trading this derivative, one should simply wait for the expiration time of the option to take their profit or accept the loss. The asset is not owned by the trader. The peculiarity of binary options is that the trader does not need to buy the asset physically, he only bets on the direction in which its value will go. Some traders do not see this as a problem, while others find this feature as binary options risk. Lack of regulation. As binary options is a fairly new financial instrument, not every regulator on the markets controls the activity of brokers that provide intermediary services in this area. Cooperating with a broker that does not have a license increases the probability that the trader will fall into the hands of fraudsters. Choose a broker with a license, such as Binomo, eToro, FXPro.
Also unlike binary options, where contracts usually expire within 24 hours, vanilla options provide much longer expiry dates up to six months. This allows traders greater flexibility to profit from changing market dynamics. After all, vanilla options are very much susceptible to the same market movements that govern other financial assets.
In the meantime, the binary options market has some work to do in cleaning up its image. The UK Treasury recently announced plans to change binary options’ legal status to investing from gambling, which should help provide greater regulatory certainty around this instrument. It will also help to bolster its legitimacy worldwide.
A binary options exchange offers the unique possibility for traders to write options and act like a binary options broker by selling them to other traders. This means that a trader can turn into a liquidity provider listing his own options with the payout he is willing to offer. A higher payout will increase the chances of the options to find buyers but will reduce the edge the option writer has against the option buyer.
We discussed short expirations such as 60 seconds in our previous article, ‘The Binary Options Lie .’ We have developed our own trading strategies for Engelhardhanovia.Com such expirations but we must warn such expirations, unfortunately, are open to manipulations.
