Market Update: USD/CHF Economic Expectations and How to Control Trade Risk with Binary Options

Dear Traders,

The USD/CHF ZEW Economic Expectations report comes out today at 10:00am GMT, and the question is, what is the best way to profit from the event?

As a reading of institutional investors, the monthly report is considered a reliable indication of the Swiss economy and the strength of the Swiss franc against the US dollar and other major currencies.

If you were to trade the pair with conventional forex, you would likely need to consider your stop-loss on the report, the amount of leverage used, and margin deposit required. More importantly, you’d have to ask yourself how much risk you’re willing to tolerate on the trade.

Binary trading provides investors with the ability to trade in a time span of one hour with the advantage of having a fixed profit percentage on their stake. Investors do not use leverage when figuring out just how much he/she wants to wager. In addition, the one hour time frame is ideal for taking advantage of breakouts which result in an increase in volume due to the increase in trading momentum. This aspect is a key component to a successful outcome.

To better understand how to control trade risk with binary options ask for the full tutorial by calling +44-2033185970 or emailing support@startoptions.com today. You don’t need to have a funded account, but it helps if you want to make a trade!

Market Events:

Trade Alert for ZEW Economic Expectations

Released monthly, this key index has been in solid negative territory since April 2011, so any major improvement in outlook would be significant for the CHF against the Euro and USD.

Why is it important?

It’s a leading indicator of economic health – investors and analysts are highly informed by virtue of their job, and changes in their sentiment can be an early signal of future economic activity.

Advanced Report

Click here to read today’s advanced report including a resurgent AUD/USD, falling Natural Gas prices and latest analysis of Gold and Platinum markets.

High Payouts Today

StartOptions offers high payouts of 85% on AUD/USD, HSBC, Crude Oil and CAC-40 French market index. With one pip to win and volatility at all time highs, it’s the perfect alternative to standard forex trading. Click here to get started now.

Trading Binary Options involves risk and may not be suitable for everyone. Only speculate with money you can afford to lose.

EURUSD Nears $1.40 – Binary Options Hot Picks March 8

How to Enhance Your Trading Strategy with Binary Options

There are many overlooked technical aspects to Binary Options that make them ideal for Forex strategy trading. The primary advantages, which we will summarize below, are related to leverage, risk/reward and momentum trading.

The most obvious difference between conventional Forex trading and Binary Options is expiration. Hourly Forex Binary Options expire at the end of the hour, and pay out a fixed return of 85% even if the expiration price is just a fraction of a pip in the direction speculated. This has major impacts on your trading strategy since it directly affects leverage, risk / reward and momentum trading. Since the payout is so high, 85%, then a $100 trade will profit $85 if it is just a fraction of pip “in the money” at expiration. Binary Options do not use leverage, so you cannot lose more than you bet. This aspect impacts your risk / reward as well.

The point at which all these components come together is most evident when employing a Forex trading strategy such as momentum trading. In the chart above, a breakout from the base formed by the EUR/USD causes momentum in one direction, but of unknown duration and size. This unknown is felt by the conventional Forex trader in terms of perceived risk / reward. On the other hand, Binary Options offer simple directional trading so they intuitively feel like a perfect fit for momentum trades. As long as you accurately predict direction of the breakout, you can make 85% profits by being right even if the pip moves a fraction in the direction speculated. This would have required huge leverages with conventional Forex with incomparable risk / reward.

Benefits of Binary Option Trading Strategies

Ever wonder how you can combine binary option trading systems with your preferred Forex trading strategy?

Binary trading provides investors with the ability to trade in a time span of one hour with the advantage of having a fixed profit percentage on their stake. Investors do not use leverage when figuring out just how much he/she wants to wager. In addition, the one hour time frame is ideal for taking advantage of breakouts which result in an increase in volume due to the increase in trading momentum. This aspect is a key component to a successful outcome.

During the hour, regardless of how much the asset moved in either direction, the investor needs to simply speculate whether the asset will move up or down. It is mind boggling to me to think of just how much leverage would be needed with a conventional Forex account to get the same profit percentage, which often reaches as high as 85%. With binary options, the risk is fixed and the reward is much higher without any leverage at all.

Let’s look at an example of how binary options work, so that you can see for yourself how easy it is. If you were place a $100 Put trade when a breakout begins using a binary options account with StartOptions you wouldn’t need to calculate risk, reward or leverage or even place a stop loss because as long as the USD/JPY closed at the end of the hour even a fraction of a pip below the price that you originally bought it (which was the strike price) you could profit 85%. Unbelievably, it’s as simple as that.

Easy Hedging with Binary Options

Many subtle aspects of Binary Options often go unnoticed by Binary Option traders. The most interesting perhaps is that there are many ways to trade Binary Options in a manner that reduces risk. One of these is hedging.

The principle is simple: Strengthen your position if you are right and hedge it if you are wrong. Let’s see how this works. In the images below, the GBP/JPY succeeds in a breakout in CASE A and fails the breakout in CASE B. Using your Binary Options trading account, at Start Options you would place a CALL Binary Option trade at the moment of the breakout in both CASE A and CASE B. In CASE A the breakout succeeds and you reap an 85% profit, say $85 if your trade stake was $100. However in CASE B the breakout fails. At this point you have 2 choices: lose $100 or hedge your trade. If you choose to hedge your bet by placing a PUT Binary Option trade when the breakout fails, the trades now cancel each other out resulting in a $15 loss instead of a $100 loss(win $85 – lose $100 = $15).

So let’s assume that 50% of breakouts succeed, in a pessimistic world. Under this assumption you will win $85 (50% of the time) and lose $15 (50% of the time) which makes a steady income of $70.

One interesting comment on Binary Options hedging: don’t try this with your conventional Forex account…conventional Forex accounts don’t allow you to hedge on the same instrument…if you try it you will find yourself selling off you own position!

How to Trade Binary Options (Video)

Trading the US Advanced Non Farm Employment Change News Event with Forex Hourly Options

One of the most important market news events, the US Advanced Non-Farm Employment Change, is going to attract the serious Forex traders. One of the easiest ways to profit from this news event is by trading Hourly Forex Binary Options. Hourly Forex Binary Options such as USDJPY Binary Options, offer an easier, more profitable and risk-managed way of trading this news event.

The big advantage of Hourly Forex Binary Options is simplicity. You basically just have to trade in the right direction. Your trades automatically close out at the end of each hour. Forex Binary Options offer is a fixed reward of over 80% profit, even if you are only 1 pip in the right direction. This is so simple and yet so profitable.

Another advantage of Hourly Forex Binary Options is that risk is automatically managed within the option. Offering up to 15% payout out-of-the-money, your maximum loss is known in advance, with no need to place stop-loss orders. More importantly, Binary Option risk management is more reliable than stop-loss orders because they cannot be shaken-out due to volatility. Forex Binary Options trading provide true fire-and-forget trading, whereas stop-loss orders only provide that illusion.

In the chart above, the US Unemployment Claims report produced a strong sell-off in the USDJPY. The sell-off began at the moment of the news release, and broke through several support lines on the way down. Trading this news event was very easy. If you believe that the price will go down after the news event, you buy a Put Hourly Forex Binary Options on the USDJPY. If you on the other hand believe the price will go up, you buy a Call.

Trading the Non-Farm Payrolls News Event with Forex Binary Options

Binary Options are a much more simplified and advantageous way of trading currency pairs than traditional Forex trading. Whether you are a novice Forex trader looking for a more simplified way to succeed or an advanced Forex trader looking for a more profitable Risk/Reward ratio, you need to give Binary Options a try.

This coming Friday one of the most important market news events, the US Non-Farm Payrolls (NFP), is sure to attract Forex traders. One of the best ways to trade this news event is by using Binary Options. As many traders already know, Forex Binary Options such as EURUSD Binary Options, offer a means of trading news events that is much more attractive in these situations than traditional Forex trading.

One advantage that Forex Binary Options offer is a fixed reward of 81% profit, even if you are only 1 pip “in-the-money”, meaning that you chose correctly the direction that the EURUSD is moving and it closed just 1 pip or more in the direction that you choose, at expiration. Another advantage is that expiration, which is the end of every hour, is usually just a few minutes from the news event, so you can be “in-the-money” and get your reward within the time frame of the news event rally. Lastly, Forex Binary Options, besides being a simplified way of trading, also have the advantage of providing a risk-managed way of trading, since the “out-of-the-money” reward is known in advance, so there is no need to guess where to put that elusive stop-loss-point. Every seasoned Forex trader knows how often he gets shaken-out of his trade when his stop-loss is hit. This situation does not exist with Forex Binary Options.

In the example in the chart shown, we traded a news event rally by buying a Put Binary Option immediately after the news event was reported and the rally began at the break of the support line. There was no need to set stop-loss or limit orders as in traditional Forex trading. By the way here are 2 more trade ideas for the NFP: as seen in the chart, you can buy a Call Binary Option when the rally reverses or buy another Put Binary Option when the reversal ends and the trend re-continues.

How Using This Thursday’s BoE Release with Binary Options Can Be More Profitable Than Conventional Forex

A fraction of a pip in the right direction at expiration with binary options and you are profitable. Hence, releases that are not expected to create great volatility are more advantageously traded using Binary Options rather than conventional Forex.

A perfect example of using Binary Options with announcements that aren’t expected to create volatility is this Thursday at 12:00 GMT, when the Bank of England will release its Official Bank Rate. As the new rate is usually already priced in the market, this release is not expected to create great volatility in the GBP/USD.

Trading the GBP/USD with a Binary Options as opposed to conventional Forex warrants profits that are usually fixed at 81% of the amount invested. Compared to conventional Forex, one would have to leverage 100s of times the investment to reach still smaller profits for a small pip move. For this reason, when a news event is about to be released which is not expected to create great volatility, such as this Thursday’s release regarding the BoE Offical Bank Rate, trading GBP/USD with Binary Options can be more profitable.

 

 

To exemplify this correlation, in the chart above we can see how the EUR/USD reacted at 14:30 to the unemployment claims data. A great rally ensued but then reversed almost to the breakout point.

If you had believed that the direction of the rally would continue beyond the breakout point then placing a PUT Binary Option trade (A PUT Binary Option trade is considered ‘in the money’ if the price of the underlying closes below the strike price at expiration) would have returned an 81% profit, despite the reversal. On the other hand, a conventional Forex trade would have been very tricky to exit with a sizable profit, and an 81% return would have required significant leverage.

With Hourly Forex Binary Options there is no need to place a Stop-Loss order as there would have been in this example had you chosen conventional Forex. Since Binary Options expire at the end of the hour there is no fear that a Stop-Loss order will shake you out of our position due to volatility related to the news event. With Binary Options, all that is needed is for you to decide on the direction of the news event rally, and the Binary Option will do the rest.

Welcome Binary Options Trader!

In front of you on the trading platform for each market trade is a one hour graph that represents the price of the asset.

The first thing to notice is highlighted on every chart is the current price of the asset. Scrolling over the chart, you will get the price at each place where your curser is placed. You can see by looking at the chart the general trend of the price of this asset. See what the asset’s price opened the hour at, the volatility of the price,etc.  Get a feel for the general feel of what the market is pricing this asset at for this hour. Notice if you see a pattern emerge that represents the market’s sentiment for this asset at this present hour. Did the asset price spike up and drop down suddenly at any point so far into the hour? Does it appear to be a relatively steady climb or decline? Did the asset price start off low and then increase, and now appears to be remaining relatively steady?

As you watch the asset you are placing your trade on, you want to be aware of what is happening in regards to news about this asset. Is this asset’s reaction to the news going to be volatile or steady? With Binary Options, as you are choosing the direction of the price within an hour’s window, it is important to have an understanding of the market. In other words, understand currency swings and what that could mean, or stock swings, gold swings, etc. Since Binary Options are traded on the hour, you may want to place your trades when you know that particular asset is having a new occurance, such as a bank releasing a certain rate at a certain time, or etc.

Remember that the beauty of Binary Options is that you only have to choose the direction of the asset. So as long as you choose the right direction, you are “in the money.” Unlike other trading methods, in which what you profit is dependent on you being able to predict exactly or close to how much an asset’s price will move in a certain direction, with Binary Options you are able to get a high return (75-85%) just with getting the right direction.

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