Author: rcanessa - Page 50

In The Money (ITM) Binary Options

The flexibility of binary options trading compared to other financial products offers a number of opportunities for the trader, including the ability to speculate based on a variety of markets, which in turn offer a wide selection of underlying assets including currency pairs (Forex), stock indices, commodities and stocks. Having such a variety of assets among which we can choose, there are greater possibilities for the trader to perform an operation with a binary option that ends In The Money.

When we trade with binary options, there are two possible outcomes. The role of the trader in this scenario is to predict whether the price of the underlying asset will go up or down with respect to a certain price (usually the entry price of the option) and an equally predetermined period of time, known as expiration period or expiration time.

For example, if the trader predicts that the underlying price will go up for the time of the option´s expiration and at the end this prediction is correct, then the transaction will have a “In The Money” result in the expiry of the contract. In this case, because the option expires In The Money, the trader receives the default payment for the transaction. Alternatively, if a trader predicts the direction of the asset price incorrectly, then the result of the operation at the time of maturity will be Out The Money.

Out The Money (OTM) Binary Options

by rcanessa

When a trader operates in the binary options market, basically what he does is a prediction about what direction will take the price of an asset for a predetermined period of time. When the time of option expiration arrives, the trade can produce two possible outcomes – the option expires In The Money or Out The Money.

When a trader incorrectly predicts the direction of the underlying asset price, then the option expires Out The Money, which means that this is a losing trade. In binary option strading, when the option expires Out The Money means that the trader was wrong with respect to his market forecast and therefore the underlying price moves in the opposite direction to the direction predicted during the expiration period of the option contract.

For example, if a trader opens a position with a Call binary option based on a particular asset, a negative result would occur if the asset price falls below the original exercise price (strike price). In the case of a trader who had placed a Put binary option based on a particular asset, a Out The Money result would occur if the asset price rises above the exercise price.

At The Money (ATM) Binary Options

by rcanessa

In binary options trading a trader must predict the price movement of an asset in the market during a predetermined period (the expiration period or maturity). When the time of option expiration arrives, it can produce only one of three possible outcomes for the trade.

If the price of the underlying asset moved in the direction predicted by the trader, then the option will have expired In The Money (a winning trade). But if the asset price moved in the opposite direction, the option will have expired Out The Money (a losing trade). However, it is said that a binary option has expired At The Money when the option value ends at the same level as the original exercise price (strike price) once the maturity of the transaction occurs. For the trader, an option that expires At The Money results in an operation that does not generate profits or losses as it is considered that the option did not end in the gains zone or the loss zone. In other words it is a transaction that ended in a “tie”.

Finmax Broker Promotions for 2019

by rcanessa

The binary options broker Finmax is offering during 2017 a series of promotions for its new clients that include a welcome bonus of up to 100% and a risk-free transaction in which the broker assumes the trader´s loss in case the option expires Out The Money. In the case of the welcome bonus, this is a deposit bonus whose terms are fairer compared to other similar promotions that have previously given a bad reputation to many binary options brokers because of their unclear conditions that fall into deception.

-Period of validity of the promotions: Finmax has not indicated a deadline for these offers and therefore they are valid throughout 2017 or until the company indicates otherwise. This Finmax broker promotion has ended.

Piercing Line Candlestick Pattern

by rcanessa

The Piercing Line candlestick pattern is a reversal formation that occurs in downward trends and usually indicates a possible change from bullish to bearich trends. This pattern has a high reliability and can be identified as follows:

This formation is only formed during downtrends.
The first candle is always a big black candle (bearish).
The next candle should open below the low of the black candle.
The white candle of the next period should close at least above the midpoint of the real body of the black candlestick.

The Forex Market Requotes

by rcanessa

When we trade in the currency markets at some point we will cross with requotes. While this does not happen all the time, it can happen and the trader should know what they are, what they mean and how to avoid them.

What is a re-quoting?

A re-quoting in the Forex market means that the broker with which we are trading is not able to provide us with an entry into the market based on the price we asked at the beginning when we send the order. Usually, this occurs in highly volatile markets in which prices move up or down very quickly, usually in the periods in which important economic or political news are announced but also can be caused by some event that had a strong impact on the market.

In essence, a trader decides to buy or sell a currency pair at a particular price and click the appropriate button on the platform to do this. By the time the broker receives the order, the market price has moved too fast for the broker to execute the order at the price. When this happens the broker shows the announcement of a re-quote in the trading platform in order to tell the trader that the price has moved and to give its client the opportunity to decide whether or not to accept the new price. Almost always the new price is worse than the price requested by the trader. That is why serious brokers ask their clients before executing the trade with the new price.

Momentum Trading Strategy in 4 hours charts

by rcanessa

This trading strategy is based on the famous moving averages tunnels strategy developed by Vegas. In this particular case it was developed for 4 hour charts on any trading instruments, but is used more regularly to trade currency pairs in the Forex market. Like other similar systems, the operation is quite simple as will be seen below:

Methodology of the trading system based on momentum and tunnels for 4 hour charts

1.) To start we create a weekly chart on the asset that we are analyzing, which can be a candlestick of bar chart. This chart should contain an exponential moving average of 21 periods (EMA 21) applied precisely to the average price [(H + L) / 2], and a simple moving average of 5 periods (SMA 5) also applied to the average price [ (H + L) / 2].

365Invest – Forex and CFD Broker

by rcanessa

365Invest – Broker Review

365Invest is a regulated Forex and CFD broker from Europe which offers access to many markets, besides Forex, through Contracts For Difference. It was founded in 2016. This broker offer several services to its clients, including a web based trading platform, platforms for mobile devices, educational resources, low and variable spreads (through a STP execution) and more.

It is an ECN / STP / NDD type broker, which means that its clients can operate under ECN trading conditions and without direct intervention of the broker (without dealing desk), so that transactions are carried out directly in the market with variable and low spreads and with the best quotes (the broker acts as an intermediary between the customer and the market).

Expiry Time – Binary Options

by rcanessa

In binary options trading, the expiry time or maturity is defined as a predetermined time, or hour in which the result of a trade is determined. When a trader opens a position with options, the broker indicates the relevant expiry time for the binary option. When that moment arrives, the value of the underlying asset (known as Expiry rate) is determined, which results in a positive or negative result of the transaction for the trader.

When a trader opens a position with digital options (High/Low), the time of initiation of the trade is known as Strike Time. Before the execution of the transaction, the trader is required to select an underlying asset and make a prediction about price direction. If the trader believes that the asset price will go up, he places a call option based on the asset, but if he thinks that the price will go down, then he places a Put option based in this asset.

Depending on the broker, the trader receives a range of alternative of maturity periods that can be applied in a variety of types of underlying assets (Forex, stocks, indices and commodities). This range of maturities includes periods of a few minutes, hours, days or even weeks. The expiry time is an important element in the execution of a trade with binary options, as the length of time may influence how the price of an asset reacts to various changes in the market. Once the transaction reaches the expiry time of the binary option, the value is determined, and finally is determined whether the trader’s prediction was correct or not, and subsequently, if the transaction finished In The Money or Out The Money.

Trading the Ladder Binary Options

by rcanessa

What are the Ladder options?

Ladder binary options are a peculiar sort of binary option contract, which isn’t even widely available: only a limited number of brokers feature them. Still, some traders prefer the ladder, because it’s a little more intricate and a little more interesting for many than a simple Put/Call or Touch/No Touch contract, plus, it allows traders to take advantage of more sustained bullish or bearish trends, while mitigating some of the risks that come with such an approach.

The best way to define a ladder trade is that it’s essentially several trades in one. Several price targets are used in these trades, which are arranged like the steps of a ladder (hence the name), Each of these steps is essentially a Touch trade, as the trader is looking for the price to hit as many of his targets as possible. The payout for the trade is also split into several parts, in predetermined percentages for each of the price-targets that make up the ladder. If a trader hits his first target, he’s essentially guaranteed some payout, therefore, even if the other price targets are missed, he will still not be left empty-handed. It is all too possible for the trader to miss all his targets though, in which case, his entire investment is lost.

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