Gold is one of the most traded commodity assets today. It is mostly available as a pairing with the US Dollar (XAU/USD), although pairings with the Euro and silver are becoming a staple on many trading platforms. Gold can be traded:
On commodities exchanges as options instruments or gold futures.
On forex platforms as a Contracts for Difference (CFD) asset.
On binary options platforms as gold binary options.
There are differences between the trading of gold binary options and gold trading as CFDs or futures assets. We don’t need to dwell too much on the differences. However, we will introduce gold binary options so the reader can understand what they are all about.
Binary Options & Gold
What makes gold a suitable candidate for binary options trading?
Gold trading on the commodities exchanges or even on the forex platforms as a CFD asset is a risky venture. Trading gold is actually more risky than trading currencies. Gold is an asset with a large range of movements. Many traders do not have well-funded accounts to handle the wide price swings that can occur when trading gold. This exposes them to even greater risk with a pretty good chance of blowing their trading accounts. For traders who do not have the financial muscle to fund trading accounts that can handle the basic trading requirements, investment in gold binary options is a safer alternative.
The contract requirements for gold trading on the commodity or CFD platforms place a hefty demand on traders. You need significantly more margin than in currency trading, as leverage rarely exceeds 1:20 (US platforms) or 1:50 (European platforms). How do you trade an asset that has the potential to move thousands of pips in a day, with leverage of 1:50 on a $2,000 account? This is a huge ask. It is much safer to buy or sell gold binary options as they require far less investment amounts and do not put hefty margin requirements on the trader.
Besides, the wide range of movements that gold exhibits means that trades that are direction-based will actually settle much faster than other slower-moving assets.
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What Kind of Trades Can Be Performed on Gold Binary Options?
Up/Down trades can be performed on gold binary options. Binary options gold trading using the Up/Down option aims to follow the upward/downward movement of the gold asset. The fact that gold displays such large movements when it is on fire means that the Up/Down option (Buy/Sell on American-style platforms) can be used to trade gold binary options.
Boundary trades can be hard to pull off with gold, especially if you are betting on the IN option. Gold does display periods of range bound movement, but this is a lot harder to predict than with currencies. The reason is because gold does not have a specific news calendar which can be used to gauge periods of calm before the storm of market moving news comes along.
Be careful when using binary robots to trade gold binary options. Most of the robots out there are not primed to trade gold, so it is hard to really recommend trading gold with robots.
What Moves Gold Prices?
There is no specific economic news for gold, which is in contrast to currencies that have a defined economic news calendar. Gold prices mostly respond to the state of other financial markets. When there is market turmoil or global economic uncertainty, there is a higher demand for gold. Gold is a safe haven asset and the increased demand for gold during periods of economic uncertainty usually leads to higher gold prices. When markets assume a risk-on sentiment with investors and traders looking to capitalize on better conditions in the financial markets, the demand for gold cools off and gold prices drop.
Here is a list of specific factors that affect gold prices. Traders of gold binary options must take note of the influence that these factors will have on the price of gold on their binary options platforms.
Global demand for jewellery.
Political factors (e.g. governments increasing or reducing their gold stockpiles).
Involvement of central banks in the gold market.
Speculative activity by traders in response to economic situations.
Mining companies (production outputs)
The demand for jewellery, especially in emerging market economies where the middle class and the millionaires club is swelling annually, accounts for close to 33% of global gold demand. In many countries, gold jewellery is purchased and used in occasional cultural ceremonies, after which they are stored away and may be exchanged for cash during periods of liquidity squeeze.
Political factors may also come to play. Some countries may decide to increase or reduce their gold reserves as part of strategic economic policies. This is intertwined with the activities of central banks. The central bank of any country is the agency of government that implements any decision to adjust the gold reserves of a country. Central banks across the world usually put a cap on the amount of gold that they can hold or dispose of at a time.
The impact of any changes in production outputs by mining companies in the major gold producing companies of the world are key influences on gold prices. They may not account for intraday changes in gold prices, but any factors that cause radical shifts in production of gold will impact prices in a sustained fashion. An instance is the South African gold miners’ strike some years ago, which limited gold production and sent gold prices soaring.
As has been mentioned earlier, investors will shift attention to gold when a risk-off sentiment pervades the global financial markets. Gold is a store of value and is therefore seen as a safe haven investment which promotes capital preservation. Global economic conditions usually determine gold prices to a large extent.
How to Trade Gold with Binary Options
In order to trade binary options gold contracts effectively, it is essential to time your trade entries and set your expiry times appropriately. This is where technical analysis comes in. You can analyse your gold prices using various tools of technical analysis such as candlesticks, patterns and technical indicators.
There are no candlestick or indicator charts on binary options platforms. Therefore, your technical analysis on gold binary options will have to be done using external chart packages. The MT4 platform provides you with free charts to do this. A forex broker’s demo platform containing the gold commodity asset can be downloaded online, and other tools such as custom indicators and EAs can be added to enhance the analysis.
Once you have your tools ready, select a regulated binary options broker that offers gold binary options. Open a binary options account by filling the online account opening form and fund the account with adequate trading capital.
Gold is traded at specific times of the day, which coincides with when gold is traded on the Chicago Board of Options Exchange platform is open for gold trading. The trading times for gold are as follows:
6:00 PM to 5:15 PM (Next day)
6:00 PM (Sunday/Open)
As a trader of gold binary options, you need to be aware of when the gold asset will be available for trading, and when the price of gold experiences its major price movements.
Trading gold binary options requires a safe and secure environment, free of bad robots which reek of fraud. You also need to put all the information in this article together and practice thoroughly on a demo account before you start trading with real money.
Q: Do I own actual gold when trading gold binary options?
Answer: You do not own actual gold when trading gold as binary options. Rather you are speculating on the price movement of gold. e.g Will the price move up or down by the expiry time. You’d need a pretty big warehouse to hold that much gold!
Q: How much money do I need to buy gold binary options?
Answer: Most binary options brokers will allow you to open trades on gold binary options with as little as $10. You do not need the large amounts required to trade gold on the parent commodity exchanges.
Q: Can I trade gold binary options with robots?
Answer: It is possible to trade gold binary options with robots if the robot has been optimized to do so by the software creators. Find out from your software vendor if this is the case.
Binary Options Day Trading 2020
Binary options trading hinges on a simple question – will the underlying asset be above or below a certain price at a specified time? If so, you can make substantial profits with one of the most straightforward financial instruments to trade. But what exactly are binary options, and what are their benefits and drawbacks? This page will answer those questions, as well as detailing how to start day trading binary options, including strategies, tips, and regional differences to be aware of. Use the broker top list to compare the best binary brokers for day trading 2020.
What Are Binary Options?
Firstly, let’s have a look at how it all works. Put simply, binary options are a derivative that can be traded on any instrument or market. They appeal because they are straightforward. You know precisely how much you could win, or lose before you make the trade. No complex maths and calculator is required. This is why they are also known as ‘all or nothing’ trades.
If you anticipate news announcements, quarterly reviews, or global trends, then you may be able to make an accurate determination as to whether the price is going to increase or decline at a certain point in the future, turning a profit.
There is a whole host of derivatives to choose between. You can trade binary options on commodity value, such as aluminium and crude oil. You can opt for a stock price, such as Amazon and Facebook. There are foreign exchange rate options, including all the major and minor pairs. Even cryptocurrencies such as Bitcoin, Ethereum, and Litecoin are on the menu.
A Brief History
If you want to start trading binary options full-time, a detailed understanding of their origins will help. Binary or ‘digital’ options have been around for decades. Originally though, it was only large institutions and the fabulously wealthy that had access. However, 2008 saw the US Securities and Exchange Commission open the floodgates by allowing binary options to be traded through an exchange.
The internet and technology have since given the whole world access to these ‘digital’ options. As it stands, with low barriers to entry for savvy day traders and a simple to understand preposition, the demand for these digital trades will only increase.
There are a number of different option types to choose from. The most popular types are listed in the brief glossary below.
Up/Down (High/Low) – The most simple and prevalent binary option. Will the price be higher or lower than the current price when the expiry time comes?
In/Out (Range or Boundary) – A ‘high’ and ‘low’ figure will be set. You are then making a determination as to whether the price will finish within or outside of these boundaries.
Touch/No Touch – Levels will be set that are either higher or lower than the current price. You then enter a position as to whether the price will ‘touch’ these levels between the time of trade and expiry. Payout will come as soon as the touch takes place.
Ladder – These are similar to up/down trades. However, instead of using the current price, the ladder will have pre-determined levels that are staggered up or down. These normally demand a substantial price move. The flip side of this is returns will frequently exceed 100%. Although it is worth noting, both sides of a trade are not always available.
Another important component of binary options is expiry times. This is when the trade will end and the point that determines whether you have won or lost. These times can range from 30 seconds and 1 minute (turbos) to a full day (end of day), and even up to a whole year.
As an intraday trader though, you will be more concerned with trading 5 and 30-minute binary options. Opt for binaries with 1 minute expiry times though and you have the ability to make a high number of trades in a single day.
Is Trading Binary Options Legal?
Despite the somewhat negative reputation, the reality is binary options are legal. The majority of companies operate fairly. Opinions have been split because there are some out there that operate scams.
Regulation in certain regions has meant binaries have been withdrawn from the retail market. In the EU for example. But professional traders can still use them. In regions such as India and Australia, binary are legal – but traders should make sure they use a reputable broker, and read our section below on avoiding scams.
Scams & Frauds
The binary reputation has suffered from dishonest marketing and cybercrime. Too many unregulated brokers promise quick cash, whilst operating frauds. Regulators are on the case and this concern should soon be alleviated.
Binaries themselves are perfectly legitimate, but steer clear of ‘instant money’ promises, brokers that cold call, and celebrity endorsements, plus any claims that you can ‘start trading binary options for free’.
So it isn’t a question good or bad, it’s simply a question of being alert to the dangers and knowing what to look out for. If you’re unsure about a broker, ask the question in a live trading room to check they’re properly regulated.
Binary Options Vs CFD Trading
Although in some ways similar, there remain some crucial differences between binary options and CFDs. With CFDs, you have potentially unlimited risk. If the price of the asset moves significantly, the value of the trade can grow very large, very quickly – for better or worse.
Whereas binary options work slightly differently. Whilst you are still investing without owning the asset in question, the gain and loss rate is fixed. With a call option, it doesn’t matter if the price rockets, you retain the same percentage as if it rose by just a couple of pips.
Likewise, if the price sinks to zero, you’ll only lose what you put in. So, to define the difference – with binary options you get fixed risk.
Having said that, just as if it was binary options versus forex trading, you are restrained in your profit potential.
Why Trade Binary Options?
If you want to profit trading binary options, you need to first understand both their pros and cons. You need to make sure binary options will suit your trading style, risk tolerance, and capital requirements.
There is a whole host of attractive benefits to trading with binary options. The greatest advantages have been outlined below.
Simplicity – Because you are making a determination on only one factor, direction, your bet is straightforward. The price can only go up or down. You also don’t need to concern yourself with when the trade will end, the expiry time takes care of that. Whereas in other markets, you may need a system to limit your losses, such as a stop-loss.
Fixed risk – Trade stocks, gold, and crude oil and you’ve got a vast number of factors to contend with, from slippage and margin to news events and price re-quotes. With binaries, your risk is kept to a minimum with far fewer parameters.
Trade control – Because you know what you may make or lose before you enter the trade, you have greater control from the start. Trade in stocks, for example, and you have no guarantee that your trade will make the entry price.
Profit potential – Compared to other trading, the returns in binaries are extremely attractive. Some brokerages promise payouts of up to 90% on a single trade. If you’re looking to make simple trades with large profit potential, binaries could well be worth a look in.
Choice – Rather than being constrained to a specific market, e.g. cryptocurrency or stocks, binary options gift traders the opportunity to trade instruments across virtually all markets, allowing you start currency, indices, and bonds trading if you so wish.
Accessibility –In the binary options game, it’s always the best trading hours somewhere on the globe. So, you can login at night, or on the weekends and join the groups of avid traders attempting to turn daily profits. Real-time charts are available for every market so if you’ve got the time you can invest 24 hours a day.
Whilst there are plenty of reasons to delve into trading on binary options, there remain several downsides worth highlighting:
Reduced trading odds – Whilst you can benefit from trades that offer in excess of 80% payouts, these are often when the expiry date is some time away from the trade date. If the odds of your binary trade succeeding are extremely high you may have to make do with reduced payout odds.
Limited trading tools – Whilst most brokerages offer advanced charting and analysis capabilities, trading tools for binary traders often fall short of the mark. Fortunately, there are other online sources for these graphs and tools, plus brokers are working swiftly to increase their offerings.
Price of losing – Your odds are tilted in favour of losing trades. Approximately for every 70% profit, the corresponding loss of the same trade would result in an 85% loss. This means you need a win percentage of at least 55% to break-even.
Risk management – Unlike other markets, brokers often set a trading floor, with minimum accounts a trader needs to enter the market. This means losing capital can happen with ease. Whilst a stocks broker may permit you to open an account with $250, trading micro-lots, most binary brokers won’t allow $50 trades. So, even with $250 in your account, just five trades that don’t go your way could see you sink into the red.
Binary Trading via Mobile App
How Does Trading Binary Options Work?
Trading binary options for beginners is straightforward. Simply follow the steps outlined below.
Step 1 – Find a broker
This is one of the most important decisions you will make. You need a broker that meets all your requirements and who will enhance your trade performance. But with so many options out there, how do you know what to look for?
If you’re high-frequency binary trading each day, the commission fees and costs will quickly rack up. You want to maximise your profits so look for brokers with a competitive and transparent fee structure, and remember, different asset classes pay out different amounts.
One point worth investigating is rules around minimum deposits. Whilst some brokers will offer binary options trading with no minimum deposit, many will expect a deposit of close to $50, and some $100. A broker offering low minimum deposits is ideal if you’re strapped for cash. Trading binary with JC and GCI are good choices if you’re looking for low deposits.
Some brokers will specialise in certain assets. If you’re set on crude oil, it may be worth finding a broker that’s geared towards those binaries. You may benefit from relevant news feeds and the most prudent option choices available. Trading binary stocks with 212, for example, is ideal for those interested in stocks.
With scams out there it’s important you check your broker is properly regulated by the relevant financial body, e.g. FCA, CySec, CFTC. Trading with 247 Binary Options, IQ option, and Binary.com are all safe bets.
Binary options platforms are your gateway to the market and where you’ll spend many hours a day. There are now many online trading platforms, so, make sure it’s easy to use and offers all the charts, patterns and tools you need to make smart and accurate trade decisions. For example, will you be trading binary options with candlesticks or more obscure charts?
Both Keystone and Nadex offer strong binary options trading platforms, as does MT4. Before you buy, conduct a thorough trading platform comparison and check reviews.
Any problem could cost you time, and as an intraday trader, time can cost you serious cash. So, check the broker offers reliable support. Some brokers will offer 24/7 customer support through calls, live chat, and in a number of languages. Binary options trading with Etrade and 24 Option are smart moves if you want top quality support.
A growing number of people use mobile devices and tablets to enhance their trading experience. However, software for trading binary options varies hugely. So, it’s worth checking whether your broker offers cross-platform capabilities. Also, check the charting tools you need will work on your iOS or Android device. Binary options trading with IQ Option, for example, offers fantastic trading apps.
Many brokers will sweeten the deal with some useful add-ons. Some may offer free trading plans, courses, and lessons. So, find out first if they offer free courses online to enhance your trading performance. Some brokers will also offer free binary trading trials so you can try before you buy.
You could also benefit from trading bonuses, tips, the best strategy and trading signals reviews, plus free, practice demo accounts. Not to mention some brokers allow for binary options trading using Paypal. However, don’t be put off by no binary options trading deposit bonus, these can be a sign of potential scams.
For newbies, getting to grips with a demo account first is a sensible idea. Funded with simulated money, you can try numerous assets and options. It’s the perfect place to make mistakes and learn before you put real capital on the line. In addition, you’ll find most free binary options demo accounts require no deposit, so you can start practicing whilst you save that initial capital.
There is no universal best broker, it truly depends on your individual needs. Some brokers offer minimum trades of just a couple of pounds, whilst others require hundreds or even thousands. The solution – do your homework first.
For more guidance on making the right choice, see our brokers page.
Step 2 – Choose An Instrument/Market
You can trade binaries in pretty much everything, including stocks, forex, indices, and commodities. You can bet on anything from the price of natural gas, to the stock price of Google. Opt for an asset you have a good understanding of, that offers promising returns.
Step 3 – Decide On An Expiry Time
As a short-term trader, you’ll probably be more interested in 30 seconds, 1 minute and end of day expiry times. You need to balance binary options trading volume with price movement. Whilst the more trades you make means greater profit potential, it’s better to make fewer and more accurate trades. Also, find a time that compliments your trading style.
Step 4 – Decide On Size
In the binary options game, size does matter. The greater your investment the greater the possible profit. On the flip side, remember the entirety of your investment is on the line. You need an effective money management system that will enable you to make sufficient trades whilst still protecting you from blowing all your capital.
Step 5 – Choose An Option
You will have any number of the options outlined above to choose from. Think carefully about how confident you are in your determination. Consider factors that will jeopardise your investment, and select an option that gives you the best chance of succeeding. Don’t automatically select a ladder trade because you want huge returns, consider which options are the relatively safe bets.
Once you’ve made that decision, check and confirm your trade. Then you can sit back and wait for the trade payout.
Below is a video explaining how to trade binary options on the platform of a leading provider:
Binary trading strategies will differ from trade to trade. What may work for a ladder option in forex, may prove useless in a range option on gold. Having said that, there are two reasons you must have a strategy.
Firstly, a strategy prevents emotions interfering in trade decisions. Fear, greed, and ambition can all lead to errors. A strategy allows you to focus on the maths and data.
Secondly, a strategy allows you to repeat profitable trade decisions. Once you’ve found out how and why that binary option worked, you can replicate it to create consistent profits.
Building A Strategy
There are two crucial elements to your binary options trading method, creating a signal, and deciding how much to trade. The second is essentially money management. How do you go about determining these two steps then?
Step 1 – Creating A Signal
The signal will tell you in which direction the price is going to go, allowing you to make a prediction ahead of time. The two main ways to create signals are to use technical analysis, and the news.
Charts, Patterns & Indicators
If you can identify patterns in your charts, you may be able to predict future price movements. They rest on the idea that ‘history repeats itself’. You can start trading binary options using Heiken-ashi, other candlesticks, and line charts. Armed with charts and patterns, successful traders will build a strategy around their findings.
You can then build indicators into your strategy, telling you when to make a binary option, and which binary option you should go for. These technical tools can prove invaluable, so make sure your broker offers the features available to conduct thorough market analysis.
One of the great things about trading binary is you can use any number of your normal indicators, patterns, and tools to help predict future binary options movements. So, you can start trading with/using:
Support and resistance levels
Options close to expiry
For more detailed guidance, see our charts and patterns pages.
You can trade binary options without technical indicators and rely on the news. The benefit of the news is that it’s relatively straightforward to understand and use. You’ll need to look for company announcements, such as the release of financial reports. Alternatively, look for more global news that could impact an entire market, such as a move away from fossil fuels. Small announcements can send prices rocketing or plummeting.
If you can stay in the know you can trade your binary options before the rest of the market catches on. To do that you’ll need to be tuned into a range of news sources. You can browse online and have the TV or radio on in the background. Some of the most useful news sources in terms of trading information are:
Step 2 – How Much You Should Trade
If you’re just starting off it’s often best to keep things simple. Trading the same amount on each trade until you find your feet is sensible. Below are 3 binary options trading strategies for both beginners and experienced traders.
Binary options using the martingale trading strategy aim to recover losses as quickly as possible. To do this you’d trade larger amounts of money in the trades following a loss. So, you’d set an amount that you trade each time, say $250. However, if you lose on that $250, you’d bet $500 on the next trade. If the trade wins, you’ll already be back in the black, rather than being stuck around the break-even mark.
The problem with this strategy is that if you go on a losing streak you can lose a serious amount of capital in a short space of time. So, only use this strategy if you’ve got a relatively accurate means of making trade decisions. If you’re still in the trial and error stage, consider a different approach.
A percentage based system is popular amongst both binary options traders and other traders. The idea is you specify a percentage you’re willing to risk. Between 1-2% is common. So, if you’ve got $10,000 in your account, and your risk value was 2%, you could trade $200 on a single trade.
If you have a greater risk tolerance and consistent results you may want to increase that risk margin to 5%. The benefit of this system is that you should never lose more than you can afford. This makes it an ideal approach to take if you’re new to trading on binary options.
This example is best employed during periods of high volatility and just before the break of important news announcements. This technique can be utilised by traders of all experience levels. It gives you the capability to avoid the call and put option selection, and instead allows putting both on a specified instrument.
You aim to utilise put when the value of the instrument has risen, yet you think that it’s going to decrease soon. Once the descent has begun, place a call option on it, anticipating it to bounce back swiftly. You can also do it in the reverse direction. Simply place a call on the assets prices low and put on the rising asset value.
This significantly increases the chance of at least one of the trade options producing a profitable result. If you’re in a volatile market, this simple system could you see turn handsome profits. This works well as a binary options trading 60 seconds strategy, and will also cover expiry times of up to one day.
Bots & Algorithmic Trading
Once you have honed a strategy that turns you consistent profits, you may want to consider using an automated system to apply it. These robots usually rely on signals and algorithms that can be pre-programmed.
The bots then do all the leg work, trading options on your behalf. The plus side is they can make far more trades than you can do manually, increasing your potential profit margin. They can also trade across different assets and markets.
It’s worth investigating your brokers offering when it comes to auto trading and checking for robot reviews. Many allow you to build a program with relative ease. You can use your own entry points that rely on Bollinger bands, RSI/MFI patterns, and moving averages.
However, even when you’ve got your system up and running, you can’t go into trading binary options on autopilot, you need to stay tuned in. If any mistakes take place, you need to be there to remedy the problem. Technical crashes and unpredictable market changes can all cause issues, so stay vigilant.
Many binary option strategies pdfs fail to sufficiently consider time variables. Certain strategies will perform better with specific time options. You may want to look specifically for a 5-minute binary options strategy. Alternatively, trading 15-minute binary options may better suit your needs. So, whichever strategy above you opt for, ensure you take time into account.
Summing Up Strategy
Trading binary options with success rests on finding a strategy that compliments your trading style. So, consider the instrument you’re going to be trading. Then, employ an effective money management system and use charts and patterns to create telling indicators. Also, utilise news announcements to your advantage.
If you’re trying a new fence, gap, hedging, or any other binary strategy for the first time, why not try it on a trading practice account first? This will allow you to address any issues before you invest your own money.
For more detailed guidance, see our strategies page.
Binary options trading 101; immerse yourself in educational resources. As Benjamin Franklin asserted, ‘an investment in knowledge pays the best interest’. The top traders never stop learning. The markets change and you need to change along with them.
To do that, utilise some of the resources detailed below.
Books & eBooks – There is a whole host of books and ebooks out there that can impart invaluable information on day trading binary options. You can benefit from the binary options trading knowledge of experts with decades of experience. The good thing about a book it is allows you to learn at a pace that suits you. One book that has made binary options trading easy is ‘Trading Binary For Dummies’, by Joe Duarte.
Video tutorials & seminars – Engaging and easy to follow. There are numerous online video tutorials out there that can walk you through making a trade. With seminars, you’ll also be able to have questions answered and the binary options trading basics explained, plus some brokers offer weekly seminars to keep you up to date with market developments.
PDFs & instruction guides – These will give you a clear breakdown of steps that you can follow and apply. The best part is you can find plenty online that are totally free and easy to download, whether you’re using Android, Windows, or iOS. The trading binary options ‘Abe Cofnas’ pdf is particularly popular.
Forums & chat rooms – This is the perfect place to brainstorm ideas with binary options gurus. You can benefit from recommendations and learn in real-time whilst investing in your binary options. You can also swap live chart screen grabs to get a feel for other binary methods and tactics.
Newsletters & blogs – These are brilliant for keeping up to date with upcoming developments that may affect your markets. Plus, you could hear about binary options competitions (yes, they really do exist).
Copy trading – This is when social trading networks/platforms are combined with binary trading tools. You can follow experienced traders, analyse their strategies, and then replicate their trades. Check out copy trading reviews before you sign up.
All of the above will play a key part in your binary options trading training. Free trading videos and examples will help give you an edge over the rest of the market, so utilise them as much as possible.
There currently exists no binary options university. So, explanations as to why that option didn’t work can be hard to come by. Keeping a journal with all your binary option trading results in could solve that issue. A detailed record of each trade, date, and price will help you hone your strategy and increase future profits.
Whether you keep it an excel document or you use tailor-made software, it could well help you avoid future dangers. As an added bonus, it can make filling in tax returns at the end of the year considerably easier. A journal is one of the best-kept secrets in binary options, so now you know, use one.
Trading binary options successfully isn’t just about having the right strategy. If you can’t control your emotions you will make costly mistakes. As Robert Arnott stated, ‘what is comfortable is rarely profitable’. When the pressure kicks in, fear and greed can distract you from the numbers.
You need to accept that losses are part of trading and stick to your strategy anyway. If it’s based on accurate maths and careful technical analysis then you have to keep your faith. As soon as you start acting inconsistently your profits will suffer.
As the popularity of binary options grows across the world, regulatory bodies are rushing to instill order. That means where you trade and the markets you break into can all be governed by different rules and limitations.
If you’re day trading binary options in the UK, for example, you will require a license from the UK gambling commission. If you opt for a broker regulated by the Financial Conduct Authority (FCA), you’ll be guaranteed an extra level of protection. Beware some brokerages register with the FCA, but this is not the same as regulation.
Brexit has brought with it complications to trading regulations. The MiFID II guidelines were set to be implemented across Europe enforcing rules around binaries, however, the UK may not now implement the guidelines. This means the UK is no longer under pressure from Europe to reclassify binaries as financial instruments.
Binary options trading for US citizens is limited by a choice of just two brokers. Nadex and CBOE are the only two licensed options. Fortunately, they are both huge firms offering competitive prices and a range of different assets to trade binaries on.
Rest Of World
In Australia, the Australian Securities and Investments Commission (ASIC) runs the show. If you’re interested in brokers based in Cyprus and Israel, then check they are regulated by CySec. In Dubai and the rest of the UAE, binary options are regulated by the Dubai International Financial Centre (DIFC).
You can also start day trading binary options in Canada, India, Pakistan, South Africa, Malaysia, Kenya, New Zealand, Nigeria, Vietnam, Indonesia, and the Philippines. Each has their own regulatory bodies and different requirements.
So, if you want protection, ensure you do your research before you sign up for a binary broker on the other side of the world.
Another important regional distinction comes in the form of taxes. Some countries consider binary options as a form of gambling, such as the UK. This comes with notable benefits. The HMRC will not charge you any taxes on profits made through binary options. However, in the future binaries may fall under the umbrella of financial derivatives and incur tax obligations.
Having said that, if day trading binaries are your only form of income and you consider yourself a full-time trader, then you may be liable to pay income tax. Whilst you are probably still exempt, it is worth seeking clarification.
Outside the UK, tax regulation differs hugely. Binary options in Japan and Germany come with vastly different tax obligations, for example. So, before you start trading seek advice to ascertain whether you’ll be exempt from tax. If not, will you pay income tax, capital gains tax, business tax, and/or any other form of tax?
For more detailed information, see our taxes page.
Can Trading Binary Options Make You Rich?
Although exciting and dynamic, to make a living trading binary options you’ll need to use this page and other sources as guides. Can trading binary options make you rich then? Done correctly, yes it can. There is no question of binary options potential profitably, this is evidenced by numerous millionaires. To get there though, you’ll need the right broker, an effective strategy, and you’ll need to invest in your trading education, by utilising the resources outlined above.
Are binary options legal?
Yes, but regional regulation varies.
In India and Australia for example, binary options are legal.
In the US, binaries are available via Nadex, and perfectly legal.
In the EU, binaries have been withdrawn for retail investors, but it is still possible to trade binary options legally, by professional traders. Certain criteria need to be met in order to be classed as ‘professional’.
Can you trade at weekends?
Yes. There are two ways to trade at weekends. Firstly, forex markets are still open in some parts of the world during the “weekend” in other parts. Binaries can be traded on forex during these times.
There are also ‘synthetic’ markets with some brokers (such as binary.com) but traders should note there is no underlying market with these options. They are ‘virtual’ markets created solely to cater for traders looking to trade anything at all. They are not for sophisticated traders.
Are binary options banned in Europe?
Binary options have been withdrawn for retail traders by the European regulator, ESMA. Brokers not regulated in Europe may still offer binaries to EU clients.
It is also possible for EU traders to nominate themselves as professional traders. This waives their rights to regulatory protection, and means binaries are free to be used again.
Some synthetic markets can also be traded by EU traders, and while the product works exactly as a binary options, they are referred to slightly differently.
Do binary options work on MT4 or MT5?
There are no binary options brokers offering Metatrader integration. It is however, possible to perform technical analysis in MT4 and place trades on a separate trading platform.
Can you use binary options on cryptocurrency?
Yes. The leading binary options brokers will all offer binaries on Cryptocurrencies including Bitcoin, Ethereum and Litecoin. As a derivative, traders will not “own” any cryptocurrency, they will purely be speculating on the price. This does mean however, there is no need for a Crypto wallet or crypto account.
2020 Binary Review – Is This Legal Binary Options Trading Software?
2020 Binary is basically a broker for binary options trading. To get started simply sign up and make a deposit. From there the system and broker will begin making trades on your behalf.
What Is 2020 Binary?
According to Who.is, 2020Binary.com was registered May 14, 2020. The site is set to private.
You will, however, find that 2020 Binary is operated by SKYE Ltd and launched June 2020. SKYE Ltd is actually located in Bulgaria, yet the phone number listed is for the United States and the United Kingdom.
It is also important for you to know that 2020 Binary site does not allow citizens from the United States to trade using their platform. This could be due to the brokers are unlicensed and not regulated by CySEC.
Basically with 2020 Binary you sign up and open an account. You are required to deposit at least €500 in order to start trading. You can deposit more if you like, but at €500 that is equivalent to $526.62.
It is also important to note that 2020 Binary uses “Hello Market” platform in which they present expiration time frames for trades. The expiration time frames need to be closely monitored since there are 3-time frames you can choose from.
The first is the 10-minute time frame option that allows it to expire every 10 minutes. The second option is for the hourly time frame which expires every hour on the hour. Last you have the 45-minute option which can be tricky.
If you pick the 45-minute option you should know that it doesn’t count every 45 minutes, but expires at 45 minutes every hour.
An example is if you place an order at 2:40 and pick the 45 minute time expiration, the option will expire at 2:45, not forty-five minutes from when you placed the order. So do be careful when playing with the time lapse options.
2020 Binary site does not explain the trading fee. You see each time you trade, the broker receives a fee for initiating the transaction. The fact that the site doesn’t mention how much you have to fork over for every single transaction is a little suspicious.
However, the fee could explain why you have to deposit €500.
There seems to be a lot of red flags for 2020 Binary. First, if you live in the United States you can’t use their platform. Yet, one of their main numbers is a United States telephone number.
Another major red flag is that the company is offshore making and have so many rules and regulations that you have to jump through before you can withdraw your funds.
While the site does mention how they can do all sorts of transfers for you, the paperwork and time involved make it very difficult to get any money at all. Plus they have a minimum of $100 that must be made before you can withdraw and a fee for you to withdraw.
The fact that 2020 Binary brokers are not licensed should also be another warning sign for you to steer clear. The fact that they don’t list their trading fees could be one of the main reasons why they require so much to be deposited to start trading.
This brings us to the last red flag. The amount of money that you have to deposit is unreasonably high. Many sites state that the minimum amount to deposit should only be around $250. There is no reason why 2020 Binary should be so high to start off with.
After all, €500 is a lot to hand over just to start out. It would seem that 2020 Binary is catering towards those who have more money to invest.
All in all, 2020 Binary doesn’t really seem like a company that anyone should get involved with. You will find a lot of reviews about 2020 Binary that is both good and bad. The thing is, though, if you can’t afford to lose the money, then don’t trade.
Binary options are not a guaranteed source of income and should be seen as a high-risk.
Best Binary Options Brokers for USA (Top Trading Platforms 2020)
Binary means 0 and 1 and that is the rule in binary option trading too. The basic idea is to put your money on a yes or no, that’s it. If you get it right on the trade then you take home the interest or you get nothing. Here we will learn about those which are for US traders.
As far as US is concerned, traders here have real difficulty finding a reliable and trustworthy binary option broker. If we’re talking about brokers based in US, there is only the NADEX for binary options trading.
However, there are few world-renowned, popular trading sites that are there for US traders even from outside. The first thing US traders should look for in a binary options broker is the ability to trade in US Dollars. Beyond that, what is more important than currency is having payouts available in US-based banks.
Another thing to look for here is multi-platform access, so it’s easy to trade on the go.
Here are the Top 5 Best Binary Options Brokers for USA Buyers
1. Nadex (best options broker overall)
A favorite binary options broker among US traders and headquartered in Chicago, Nadex is licensed by the Commodity Futures Trading Commission (CFTC). Nadex is not just a binary options broker but it is a binary exchange operating as per regulations of US government.
The minimum deposit needed is $100. There are four different trading platforms on Nadex- Free demo trading, Nadex trader, Nadex pro, and mobile trading.
You don’t have any software to download to trade on Nadex. Everything goes on your browser.
US residents can do deposits through debit cards, Automated clearing house (ACH), wire transfers and paper check but non-residential US traders don’t have the paper check option. Minimum investment is $25 and you can have a maximum payout of over 200%.
2. Finpari (best binary brokers outside the US)
Because it is not in US and is regulated by CySEC pushes it to the second spot. Other than that, it is better than Nadex in many ways for US traders. It offers a maximum return of 90% and there is a 100% bonus rate with $250 as a welcome bonus.
The minimum deposit on Finpari is $250 and it works on a very smooth and user-friendly SpotOption platfrom; It is fully functional for mobile devices.
Amount you can invest with this binary options broker
The minimum investment is $1 and maximum you can invest is $1500 with bronze, silver and gold accounts. Finpari accepts USD, EUR, GBP and RUB.
3. BinaryMate (one of the best binary trading sites in the UK)
BinaryMate quite new to the list of US-legitimate binary options brokers. Launched in 2020, BinaryMate is operated from Scotland. It has a proprietary platform for trading that includes live 24/7 video chat with managers.
With an amazing payout rate, you can have returns up to 95% in just 60 seconds. There are over 100 assets with three type of accounts- gold, silver and bronze. Demo accounts are also offered to all the customers after deposit.
The minimum deposit amount is $250. Minimum account size is also $250 whereas you can start trading from a minimum amount of $1. Maximum payout rate is 95%. There are range of withdrawal methods.
4. Capital Bank Markets
Capital Bank Markets is a binary options broker with professional trading technology which, at the same time, is easy enough for new traders. There is a mobile app currently under development, which will soon provide easy on-the-go trading to users.
It accepts a minimum deposit of $500 but there is a unique student account option for college students, which allows student users to start with a minimum deposit of $250. You can start trading with as little as $25.
Short term assets expires in 3 min to an hour whereas long term assets are available any day from open market until closing, with a gap of 15 minutes. Payouts range up to 95% and you have over 300 assets for trading.
MarketsWorld is another proprietary trading platform headquartered at Isle of Man in Great Britain. It is regulated by the Gambling Supervision Commission. The first minimum deposit needed is $10 and the minimum trade amount is only $1.
The bonus rate is 100% with a cash match up to $1000. You get a maximum payout rate of 90%. The platform is quite simple and very fast; there are no hassles are using it, even on mobile. The only thing that keeps this at last place is the number of assets available for trading, of which there are only 16. Other than that, this binary option broker is fast on withdrawals, relatively risk-free trade, with huge potential for bonuses.
Editor’s note on the best binary options brokers
Are you looking for a traditional option broker? We’ve compiled a list of the very best right here.
Don’t slack on trading equity shares! We recommend signing up for veteran trader John Thomas’ trade alerts, where you get to receive trade suggestions from the man himself. Trade knowing that your chances for success are all that much higher. Learn more here.
Gold Trading Strategy
Binary Options Strategy for Trading Gold Prices
This article is sponsored by OptionBit which is our recommended broker for trading gold with binary options.
Gold is one of the underlying assets traded in the binary options market. This is just as well too, because trading gold in the commodities market is just too risky for most retail traders. The margin requirements are high, it needs a lot of capital (in excess of $10,000) and a heart of steel to bear the drawdowns that could occur. That is not to mention the monumental losses that could occur in a crazy market when slippage could blow out a trader’s account.
Why Trade Gold through Binary Options?
The binary options market provides a way out to trade gold in a controlled environment, with reduced risk of a catastrophic loss, smaller margin requirements and by consequence, lesser trading capital needed. There is no fear of gold rolling back by almost a thousand pips against your position before it decides to do as you wish it to. No fears about over-exposing your account.
In the world of binaries, the trader’s loss is restricted to the cost of the trade. If the trade behaves as the trader wishes, he gets his cost back and some extra. This “extra” could be up to 81%, or if you know how to play this multiple ways, could be as much as 500%.
In trading gold, there are several things to consider before your desire to make money from it transcends from the pedestal of dreams to the reality of tangible dollars in your hands.
Firstly, there is the trade types:
– Touch/No Touch: Here, the trader bets on the price action touching a chosen price level called the strike price, (touch) or not touching that price at all (no touch). There are variations such as double one touch, double touch, etc. The key is that the chosen behaviour of gold has to occur in the trader’s favour before the expiry date.
– In/Out: The price of gold can decide to trade within a price range formed by an upper and lower trend line. Whether this asset decides to stay within the tunnel so created (in), or break out on either side (out), is a matter for the trader to decide. A correct choice is rewarded.
– High/Low: How about trying to decide if gold will end higher than the present price by the time the trade expires, or lower? Another way for the trader to possibly make money.
These are three possible outcomes that can translate into some cash to finance that shopping spree that has occupied your mind lately. Let us now help you along the way.
A Binary Options Gold Trading Strategy
Gold is volatile. Its daily pip movements are anywhere between 1,000 pips and 10,000 pips. With this sort of volatility, I would like to trade a Touch/No Touch trade. The key is to get the direction right, then set an appropriate strike price and expiry date. If we get these three ingredients right, the trade will succeed.
First, we have to ask ourselves: what makes gold tick literally? Traders love gold because it is a safe-haven instrument which they can buy in periods of uncertainty. As at late 2020/early 2020, was there uncertainty in the markets? The answer is a resounding YES! Eurozone uncertainty was really bothering traders. When there is uncertainty, the price of gold only heads in one direction; upwards!
So now that we had a direction, the next thing was to determine an appropriate strike price. An appropriate strike price has to be one which is achievable (within the price range of movements for gold), and which is not beyond a resistance point. An expiry of one week was set as the expiry period.
If gold is expected to be bullish, it should either Touch a bullish target, or Not Touch a bearish target.
Based on these principles, we had two gold trades on 19 th October, 2020 and on 12th January, 2020.
In the first scenario, we used a bullish gold prediction to predict a Touch on a strike price which was within reach, and it performed as we said it would.
This screenshot shows a No Touch trade for gold, where we used the principles we described above to say that gold was not going to touch a bearish target. A very profitable trade it turned out to be.
This is a summary of one of the ways to trade gold in the binary options market. There are other ways too, but if you master this method, you will make some good money.
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