24 Binary Trade Academy
24 Binary Trade (24BT) is trying to be one of the best places traders can turn to for beginner level and expert trading strategies and general education. The goal of our website is not only to protect traders, but also to educate them to become better in 24 Binary Trade trading. This is why, in addition to the strategy section where traders can get to know some basic strategies in binary options trading.
Step1 Trading a Currency Pair – EUR-USD
A good starting point is the understanding that this is indeed a currency pair and nothing else and this means it is moving based on the differences between the two economies it represents: the Eurozone and US economies.
Trading The Way The Market Goes
Trading 24 Binary Trade should go hand in hand with trading any other financial instrument as it implies the same thing: to find out the direction the market is going and then take a decision based on that analysis.
In the case of binary options, besides telling which way the market is about to move, one should also look at the expiration date involved as it is critical for the profitability of your option.
Sometimes it is possible to trade binary options using a simple and straight forward correlation strategy and for that a couple of things are required.
First of all, correlations can be direct or inversed and one should trade call and put options on two currency pairs, for example, that are inversed correlated. The classical example here goes with the eurusd and usdchf inversed correlation as, because the eurchf peg at the 1.20 level it implies the two majors will move in opposite directions almost tick by tick as closer to the 1.20 level the eurchf gets. However, this is not valid anymore as the SNB (Swiss National Bank) dropped the peg and this made the eurchf to be, again, a free floating currency pair.
Secondly, look to trade correlations between the risk on/risk off environment, in the sense that rarely in a risk on environment the usdcad is moving higher as it is bearish in these situations and put options should be traded.
Risk OFF/Risk ON Environments
A risk off environment implies eurusd, gbpusd, audusd, nzdusd moving in the same direction, lower, while usdcad, usdjpy and usdchf higher, so put options for the first category and call options for the second one are recommended.
And thirdly, the usdjpy and US equities correlation should be traded normally as a direct correlation and if the US equities are bullish, or in a bullish trend, then it doesn’t make any sense to trade put options on the usdjpy.
Trading in a correlated manner implies also avoiding overtrading as this is one of the worst enemies in trading. For example, let’s assume one is trading a call options on the eurusd at the start of the trading week with end of week expiration date.
If market goes against your option during the trading week and until the expiration date and the trader still wants to take a trade then it is advisable to choose a currency pair that is not directly correlated with the currency pair initially traded. For example, if the trader buys a call option on the eurusd and market goes against the trade then it is not wise to trade a gbpusd call option in the same direction as it represents a dual trade and basically forms overtrading.
On the other hand, if the option moves in your favor, adding on breaks it wise or even adding on dips/spikes with different expiration dates.
Trading Correlated Markets
Correlations can be traded also from a cross and its two majors point of view. Let’s take the eurusd, usdjpy and eurjpy example. The first two currency pairs are majors and the last one is a cross. The cross is moving based on the differences the two majors are making when traveling. If the eurusd pair is moving to the upside one percent and usdjpy to the downside as well, then the cross, the eurjpy is staying flat, so avoiding high/low options on the cross is key.
Moreover, when there is a trading setup on the cross, in our example on the eurjpy cross, then the thing to do is to compare the cross chart with the two majors chart and look for correlated price action. In our example, lately, it is obviously the eurjpy is moving closely to the eurusd chart and therefore on a bearish setup on the eurjpy it is advisable to trade either range options, like one touch or boundary for usdjpy pair or put options for eurusd as the eurjpy and eurusd charts recently are the same.
USDJPY and US Equities Correlation
Another correlation that is in place and works like a charm for so many years now is the one between the usdjpy and equity indices, like SP500 or Dow Jones in the United States. The correlation is a direct one and if, for example, usdjpy is moving to the upside and the equity markets are not confirming the move, then one is lying or it is lagging for the moment. If, on the other hand, they are moving hand in hand then trying to see which one is moving slower and insisting in trading options on that one should be a wise decision.
The two video recordings that are in this article are showing you what to look for when trading with correlations as well as listing the correlated markets and possibilities a binary options trader should take into account regardless the market is trading: FX, stocks, equities, or indices.
Level 1: Basics for Beginners in 24 Binary Trade
So, you are a beginner in 24 Binary Trade. This means you have a long way to go before you become an expert trader. There are many options that may help you increase your win chances right at the beginning, however, you will discover that it is up to you to press forward and make progress. Some brokers offer 1-on-1 trading sessions, however, those are scarce unless you opt for the advanced loyalty programs, which are usually tailored for professionals. Auto trading is not such a bad idea, however, a lot of excitement is lost and personal growth is non-existent as the robot does all the work. In order to start your career in binary options the right way, take a look at resources below.
Basic Economics and Binary Trading
In order to become a successful trader, especially in the long term, it is crucial to know how to read the economic data coming in. If you are the type of trader who wants o utilize swings in the markets as big events happen, even with the help of the Economic calendar,you need to understand why these market moves are happening. What is the effect of monetary policy, what is GDP, how do interest rate movements affect future income? These are some basic economic issues every trader needs to master.
Along with economic theory, some basic trading questions must be answered. How to decide on the appropriate asset to trade, how to trade currencies such as the EURUSD, how to decide on expiry time and how can fundamental analysis be used to score profit long term. The binary trading basics are also covered in the set of articles below.