How to Make a Smooth Transition from Forex to Binary Options
How to Make a Smooth Transition from Forex to Binary OptionsMay 19, 2013
If you are an experienced Forex trader and feel it’s about time to make a transition to binary options, you are not alone. Binary options have become increasingly popular not just because of their diverse offering, but also because of the simplicity and the amazingly high returns on investment.
Furthermore, Forex traders (particularly experienced ones) have an advantage since they already possess most of the knowledge required and should have no difficulties starting to execute successful trades right from the start.
If you have access to trading software and can perform candlestick analysis on Meta Trader 4 or 5 and Ninjatrader for example, you can leverage this and start trading currency pairs in digital options (High/Low) format.
Understanding basic charting concepts like parabolic SAR and MACD will give you an advantage in 60 second options, specifically when looking for optimal entry, exit, and/or reversal signals.
If your using fibs (Fibonacci Levels) to trade Forex, you should have a very easy time adapting your strategy to digital options (AKA all or nothing options).
The trading platform and navigation should be a cinch for you to grasp since it’s basically the same thing, only with more assets available to trade (indices, commodities, and stock).
The main difference has to do with the actual financial instrument and the logic behind it. Simply put, Forex trading (AKA Spot Forex) involves spreads and contract rates that do not exist with CySec-licensed brokers.
The whole bonus structure is designed to provide traders with additional incentives to re-invest. A complete promotional scheme full of cash-back and deposit bonuses has been devised to entice traders. Keep in mind, this does not come with out a price.
How to Make a Smooth Transition?
Step 1. Find the Right Broker
This trading blog is packed with broker reviews – simply take your pick. We don’t recommend unless we actually invest with a broker and try it ourselves.
Step 2. Understand the Risks Involved
Binaries are particularly high risk/high rewards instruments. Make sure you allocate a certain amount of money for investing purposes and don’t get tempted deposit more than you can afford to.
Step 3. Have the Right Strategies Ready Before-Hand
If you want to trade Forex binary options make sure you have all your charting tools ready and your eyes glued to the financial news bulletins.
Step 4. Open a Demo Account
Starting to practice and simulate trades in a risk-free environment will give you a better understanding of the platform and how it reacts to your trading style. Make sure to ask the staff questions, this will be a good indication of how professional they are and if they are quick to respond.
Step 5. Investing
Eventually you will have to take a risk if you want to profit and make money. You will know it when you are ready, its like an inner voice telling you its time to pull out that credit card and deposit. When that happens don’t think too much just dive into it and make your initial purchase.
Making a good transition from Forex to binary options trading involves careful research, planning, but also effective execution once you feel you are ready to invest. If you have experience, make sure to use all the tools you already have at your disposal and use your advantage right from the start.