Trading Articles

Playing With Forex Breakouts

How Can I Utilize Breakout Strategy?

Trading, though risky, is very much rewarding. It demands hard work along with discipline. Throughout the process, only the breakouts can give you tough challenges. In this sense if you have a proper understanding of the process, you can net profit out of them.

Understanding breakouts will make you ready to handle them. The moment an underlying price of a commodity or forex runs out of its lines of support and resistance, it is time for breakout to happen. After breaking a level of support of resistance, the stock makes it way in the same way. It doesn’t stop unless it finds another trading range. So when a line of support is broken, you should sell the stock short.

Binary Option Traders Approach for Managing Risks

Taking the Correct Approach to Risk Management

To really take benefit from binary option trading, you should have very good management skills. You must be able to manage your routines, schedules, your personal and professional life, your bank and trading accounts, trading strategies and most importantly, you must know how to manage the risks involved in trading binary options.

Do you know in which category you fall as a trading risk manager? Find out now.

Types of behaviors:

Binary option traders mainly fall into three categories.

Understanding the Implementation of Knock-on Effect Strategy Part 2

Round 2 of the Knock-on Effect Strategy

In the first part of this article, we reviewed the basic principle behind the Knock-on Effect strategy. Some preferable asset combinations were also analyzed to see how this strategy can be beneficial to every binary option trader. In this we will review the challenges this strategy offers to the traders, its limits and how much you can expect improvement in your trading results by implementing knock-off strategy.

The challenges in implementing Knock-on Effect strategy:

Also known as market pull strategy, this strategy may seem to be the fast track to success in binary option trading. But the fact is, the trader must acquire a lot of knowledge and information about the assets he plans to trade with this strategy if he wants to actually increase the number of winning trades.

Understanding the Implementation of Knock-on Effect Strategy Part 1

Get Ready for a Very Unique Strategy!

In this article, a very unique strategy will be discussed that significantly increases the probability of making more profits in binary option trading. The strategy is known as the knock-on effect strategy, commonly called the market pull strategy by binary option traders.

The underlying concept:

This strategy is based upon the fact that the price variations in one option causes price variations in another option. It is therefore, very important to understand how different assets are interrelated, and which asset combination is the best to use with this strategy.

How to Use Technical Indicators to Trade Volatile Assets - Part 3

Getting Advanced With Volatile Assets

In the last part of the tutorial, we will discuss volatility, what stock traders should know about it and how to find the perfect high-volatile stock that will guarantee increased profit margins.

The concept of volatility:

Every trader wants to know: “How to decide whether one asset is more volatile than some other?” The interesting fact is, it is very easy to know. The stock whose price movement goes up and down by $5 when its price is $50, is more volatile as compared to the stock whose daily high and daily low price varies by $5 when its price is $150. It means when deciding how much a stock is volatile, the trader must correlate the price fluctuations with the stock’s base price.

Using knock-out options to lower the cost of hedging

Learn to Lower the Cost of Hedging!

One of the main advantages of knock-out options is that it cuts down the expense of hedging. Lower cost is needed in order to purchase this option. As a result, a trader has a hefty percentage payout if the option ends in money. Otherwise the trader faces minute loss in case it does not work out.

Types of knock-out options:

There are two types:          

Up-and-out---Through a particular point of price, the underlying asset’s price lifts up for it so that it may get knocked out.

Down-and-out---This is totally opposite. The underlying asset’s price slides down through a particular point of price so that it may get knocked out.

Pros & Cons of Trading Binary Option

Here's the Pro's & Con's of Binary Options!

If you have decided to trade in binary options, you should learn about the advantages as well as disadvantages to be faced in the long run. Given below are few of the pros and cons.

Pros of Trade Binary Option

  • You can trade from anywhere in the world. All you need is a tablet or mobile phone.
  • Get a quick pay off! You can have above 70% on your capital in a very short interval of time. This high payoff is a very attractive advantage of binary options trading.
  • Binary options trading is very simple and easy. If a trader has experience in the stock market or forex market, he will not hesitate to move to binary options. Its simplicity makes it fascinating.
  • You will have a wide range of companies. You may choose from them to trade.
  • You don’t need a huge capital for trading in binary options. You may start from what you have in your account, and trade in a vast market. This is a good reason for the popularity of binary options among traders.
  • There are no fees or commissions. The spreads that are contained within the payoff/rebate structure bear all the costs.
  • Another advantage is that brokers are offering advanced features for traders who have the most experience. As your experience grows in the trade, there come more chances for you to make success in the field.

How to Day Trade Volatility ETFs

When Should I Trade Volatile ETF's?

Day trading volatility Exchange traded funds can prove very attractive at times. But there are moments when people should keep distance from volatility ETFs. Volatility ETFs have an inverse relationship with major market indices such as S&P 500. With the rise in S&P 500, volatility ETFs will face a decline. With the fall in S&P 500, volatility ETFs will see a rise. As trends develop in market indexes, volatility ETFs too has development of trends. Since their relationship is inverse, a great uptrend in S&P 500 shows that there is a downtrend in volatility ETFs, and vice versa. Big moves that occur in volatility ETFs at reversal points of major market can be exploited by day traders.

Choice of Volatility ETF does matter

Day traders may choose from a number of volatility ETFs. It can be an inverse volatility ETF. An inverse volatility ETF moves in the direction of major market indexes. In this regard, simple and high volume is considered to be the best choice for day trading.

How to Use Technical Indicators to Trade Volatile Assets - Part 2

Technical Indicators to Trade Volatile Assets Pt. 2

In the first part of the tutorial, a technical indicator was analyzed to see how it could increase profits by trading volatile stocks. In this part, we will review how another indicator can be used to make more money by trading volatile assets.

Stochastic Oscillator:

It is another very effective indicator to trade the most volatile stocks. It is applied to a ranging stock, a stock that doesn’t follow any trend. This strategy takes into account the fact that every volatile stock price usually settles within a range before moving in a particular direction.

How to Use Technical Indicators to Trade Volatile Assets - Part 1

Learn to Trade Volatile Assets!

In the first part of the tutorial, an indicator that can help gain profit returns by trading high volatility stocks will be reviewed.

Keltner Channels:

This indicator adds three bands on the stock chart in the upper, lower and middle portions surrounding the price action. This indicator provides best results in a very trending market, either when the price is experiencing higher highs and higher lows during an uptrend, or when the price is making lower highs and lower lows when following a downtrend.

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