Learn to trade EURGBP in binary options trading

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Get Your Sign-Up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

Binary Options Trading in Action

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Binary Options Trading in Action

According to the analyzes of the Gold and EUR/USD, trader profited using a binary options platform. Find out how here for July 13, 2020.

According to the analyzes of the CAD/CHF and GBP/USD, trader profited using a binary options platform. Find out how here for June 30, 2020.

According to the analyzes of the GBP/CHF and GBP/USD, trader profited using a binary options platform. Find out how here for June 29, 2020.

According to the analyzes of the USD/CAD and GBP/USD, trader profited using a binary options platform. Find out how here for June 22, 2020.

According to the analyzes of the GBP/USD and EUR/USD, trader profited using a binary options platform. Find out how here for June 18, 2020.

According to the analyzes of the NZD/USD and EUR/USD, trader profited using a binary options platform. Find out how here for June 17, 2020.

According to the analyzes of the EUR/CAD and GBP/USD, trader profited using a binary options platform. Find out how here for June 15, 2020.

According to the analyzes of the EUR/USD and GBP/USD, trader profited using a binary options platform. Find out how here for June 11, 2020.

According to the analyzes of the USD/JPYand AUD/USD, trader profited using a binary options platform. Find out how here for June 8, 2020.

According to the analyzes of the CAD/CHF and EUR/USD, trader profited using a binary options platform. Find out how here for June 2, 2020.

According to the analyzes of the EUR/CAD and oil, trader profited using a binary options platform. Find out how here for May 27, 2020.

According to the analyzes of the silver and EUR/USD, trader profited using a binary options platform. Find out how here for May 19, 2020.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Get Your Sign-Up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

According to the analyzes of the USD/CAD and EUR/USD, trader profited using a binary options platform. Find out how here for May 14, 2020.

According to the analyzes of the AUD/USD and EUR/USD, trader profited using a binary options platform. Find out how here for May 12, 2020.

According to the analyzes of the USD/CAD and GBP/USD, trader profited using a binary options platform. Find out how here for May 11, 2020.

Forex Trading Courses

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Binary Options

Over the past years, binary options have become one of the most popular ways to invest in the markets. It is because trading binary options offer many advantages over other markets to both the beginner and the advanced trader.

Об этом курсе

Over the past years, binary options have become one of the most popular ways to invest in the markets. It is because trading binary options offer many advantages over other markets to both the beginner and the advanced trader.

Benefits of binary options trading:

  • simplicity: you only need to get the direction right, not a specific target price
  • clarity: fixed risk and fixed payout is known before the trade is taken
  • safety: you never lose more than what you invest
  • access: convenient way to benefit from rising and falling prices worldwide

If these benefits sound appealing then you might have just found the right investment tool for you. Take this course to set you on your binary options trading career.

In this course, you will learn:

  • the essentials you need to know before you invest in binary options
  • how to choose the right broker
  • what trading knowledge and skills you need to improve
  • how to protect your capital when trading binary options
  • hands-on binary options trading strategies

Trading Binary Options with Currency Pairs Correlation

Correlation is a statistical measure of the relationship between any two assets (currency pairs, commodities, stocks, etc.). The correlation between any two currency pairs in a Forex market can be either positive or negative. If two currency pairs share a positive (direct) correlation between them, then the direction of price movement will be the same at any given point of time. Likewise, if two currency pairs share a negative (inverse) correlation between them, then the direction of price movement will be mutually opposite at any given time. A trader should also remember that in most cases, no correlation exists between two currency pairs.

A trader will be able to take two trades at the same time by monitoring the price movement of one currency pair, which shares a correlation with another. So far, we had spoken about trading currencies in markets. A binary market is a bit different considering the fact that time plays a rather important part than the quantum of price movement in a particular direction. Let’s study how far correlation between two currency pairs can be used successfully in binary trading.

Positive and negative correlation coefficient

Two currency pairs with a positive correlation may move in the same direction. However, the quantum of movement may not be the same. For example, the EUR/USD and GBP/USD pairs share a positive correlation. This means that when the EUR/USD pair is trending upwards, the GBP/USD pair will also be in an uptrend. However, for every pip movement seen in the EUR/USD pair, there may not be a pip movement in the GBP/USD pair. If the GBP/USD pair moves by one pip for every pip movement seen in the EUR/USD pair then both currency pairs are said to have a perfectly positive correlation coefficient of +1. In percentage terms, it is expressed as 100%.

Similarly, the EUR/USD pair shares a negative (inverse) correlation with the USD/CHF pair. This means that if the EUR/USD pair is an uptrend, then the USD/CHF pair would be in a downtrend. However, for every pip movement seen in the EUR/USD pair, there may not be a pip movement in the USD/CHF pair. If the USD/CHF pair moves down by one pip for every upward pip movement seen in the EUR/USD pair, then both currency pairs are said to have a perfectly negative correlation coefficient of -1. In percentage terms, it is expressed as -100%.

Now, to apply correlation between two assets successfully in binary trading, a trader should know the following details:

  • Nature of correlation (positive or negative)
  • Correlation percentage (between +100 and -100)

Authentic correlation data sources

Fortunately, a binary trader need not go through the difficulties of calculating the correlation between various currency pairs, commodities and precious metals. Most of the finance related websites offer them for free. In this regard, there are two reputed sources of information that a trader can use to his advantage: Oanda and Mataf.

Oanda

Oanda enables a trader to study correlation between major currency pairs, exotics, metals, indices, commodities and even US/UK Treasuries. The checkboxes provided next to the asset categories enable a trader to narrow down the selection. Once the list is narrowed, a reference currency (or any other asset), indicated by a green underline, can be selected by the mouse. Now, the correlation between the reference currency and the assets belonging to the selected category are displayed for a period ranging from an hour to a year.

A trader can choose a standard table format or other forms of visual presentations (bubble, heatmap) to study the correlation, as shown in the images below. A detailed popup message indicating the level of correlation is shown when the mouse pointer is moved over the bubble or heatmap. The greater the bubble size, the higher is the correlation. Dark red and blue colors indicate the strongest positive and negative correlation, respectively, between currency pairs (or any other assets). Grey color indicates lack of correlation.

We chose to find the EUR/USD pair’s correlation with its major rivals through Oanda.com and received the details (table, bubble, and heatmap) as shown below.

Mataf

The financial website Matef.net visually displays correlation as a graph instead of a bubble or heatmap. It is needless to say that the table format is readily available as well. Two tabular columns (named ‘excluded’ and ‘included’) are provided for the selection of currency pairs. Notably, only the most common currency pairs are offered for study.

Once the currency pairs are selected, as shown below, the page displays the correlation coefficient in the form of a table along with a graph. The correlation data is provided for a period of 5 minutes, one hour, four hour, and one day. The graph enables a trader to identify the periods of increasing and decreasing correlation even with a given timeframe. It would be useful for a binary trader to time the entry.

The first thing a trader can notice is that the correlation between two currency pairs is not the same across all the timeframes. For example, the Oanda’s correlation map shows high positive correlation between the EUR/USD pair and NZD/USD pair in a 1-month timeframe. However, in a 3-month timeframe, the correlation remains neutral (no correlation).

As it can be seen in Oanda’s table, in a weekly timeframe, the EUR/USD pair shares a positive correlation with the GBP/USD pair, and a negative correlation with the USD/CHF and USD/JPY pairs. However, the EUR/USD shares a higher negative correlation of 95% with the USD/CHF pair, compared with only 23% negative correlation with the USD/JPY pair. This means that while betting on an uptrend in the EUR/USD pair, a binary trader should choose to bet on a downtrend in the USD/CHF pair, rather on the USD/JPY pair. This would increase the probability of success in the trade as long as the contract expiry period is one hour. It should be remembered that correlation percentage between any two pairs is not a constant. So, a binary trader should regularly keep himself updated on the changes in the correlation ratio.

Using correlation in trading

After collecting correlation details between different currency pairs, commodities, and metals, a binary trader can open trades as described further.

Low positive correlation

A binary trader should first look for two currency pairs with low positive correlation in a timeframe less than or equal to one hour. Once the currency pairs are selected, a trade should be opened in the simplest of option contracts, i.e. a call or put option (or their equivalent). Even though both currency pairs may move in the same direction, the extent of movement will not be the same since the currency pairs have a low positive correlation. Thus, trading a option or ladder option may prove futile. Furthermore, the trader should make sure that the expiry period of the option matches the timeframe used to study the correlation.

Once an uptrend is confirmed, a trader should purchase a call option in both the currency pairs. This means that a trader who has identified a low positive correlation between two currency pairs in a 1-hour timeframe should choose to trade contracts which expire in an hour and not later. If the trader spots a downtrend, then a put option should be bought in both the currency pairs as described above. Again, the expiry period of the option should match the correlation timeframe.

High positive correlation

To begin with, a binary trader should choose two currency pairs with high positive correlation in a timeframe of not less than a day. Once that is done, the trader should select a contract which offers a greater return on investment. A call (or put) option or even a ladder option can be selected. Furthermore, it is better to select and trade currency pairs with high positive correlation during major economic news announcements. Since both currency pairs would more or less rise or fall to the same extent, it is enough to spot the trend of a single currency pair and enter into two trades with confidence. Since major economic events drive a currency pair in a particular direction for several days, a trader can choose a contract with an expiry period ranging from one day to even up to a week. However, the trader should make sure that the expiry period of the option matches the correlation timeframe.

Low negative correlation

In this case, two currency pairs which have a low negative correlation in a timeframe of one hour should be selected. Once an uptrend is identified in a currency pair, a call option should be bought. Simultaneously, a put option should be bought in the currency pair which shares a low negative correlation with the currency pair in reference. It is better to stick with simple contracts (call and put option combo) having expiry periods that match the correlation timeframe.

High negative correlation

It is similar to trading currency pairs with a high positive correlation. Initially, two currency pairs with a high negative correlation in a timeframe not less than a day should be selected. This is followed by the selection of an option contract which offers high returns. The contract should be preferably traded during major economic news releases. Once an uptrend is confirmed in a currency pair, a option or a ladder option (depending on the impact level of the news) can be bought. Simultaneously, a similar contract with target levels in the opposite direction can be bought in the currency pair which has a high negative correlation with the currency pair in reference. The trader should also make sure that the chosen expiry period matches the correlation timeframe.

A binary trader can also select a option contract for a currency pair and a option contract for the other correlated currency pair, as long as the target levels are in the same direction. Since the actual movement of currency pairs would be in a mutually opposite direction, both trades would expire in the money. Care should be taken to select an expiry period that matches with the correlation timeframe.

Once a binary trader learns to set up trades based on the basic techniques explained above, complex trades can be constructed to generate returns from multiple trades by simply concentrating on the price movement of a single currency pair. Choosing a broker with multiple currency pairs available is recommended if you want to benefit from correlation trading.

The Easiest Way To Learn To Trade Is Using Nadex 5-Minute Binaries

Over a month ago, on December 15, 2020, Nadex went live with their 5-minute binary contracts. If you want to learn to trade, this is probably the easiest way to learn, but you have to try it out in demo first. Whenever you learn something new, it is best to make your mistakes in the most pain-free way possible. With trading, that would be trading with funny money and not real money.

Nadex 5-minute binary contracts are available almost 24 hours a day from 6:00 p.m. Sunday until 3:55 p.m. Friday, except between 5:00 and 6:00 p.m. when nothing is open on Nadex. With all of these readily accessible open times, you can trade in the morning, at lunchtime, after work or in the middle of the night. There are not any top-of-the-hour expirations at this time as that would conflict with the hourly binary expirations. There are three strikes per market every five minutes and there are eleven new sets offered on four markets every hour. That’s a lot of opportunities!

If you have a busy life, (and we all do,) you only need a small amount of time when you trade 5-minute binary contracts. You can place a few trades in a few minutes whenever you can find the time.

What instruments can you trade 5-minute binaries on? AUD/USD, EUR/USD, GBP/USD and USD/JPY. Because you are trading for only five minutes, you can plan on some very fast moving trades. You want to get in and get out. They will be very small trades. If you get in at $20 and it moves to $40, you take your profit and get out. You can do that over and over. Because it moves so fast, you don’t want to hold these trades to expiration. You don’t want to be waiting to make that last $8 only to end up losing $20-30.

One way to stay on top of these fast moving instruments is to utilize the Apex Binary Scanner available free at apexinvesting.com. This remarkable tool allows you an overview of all available binaries at once. There is no need to navigate back and forth between screens trying to find the trade you want to enter. If you think about the time that would save you and how fast five minutes can fly by, you will want to check out the binary scanner.

Just like regular binary contracts, 5-minute binaries also have a Dark Zone near expiration. This is the time when the markets stop making quotes. It is the last 30 seconds before expiration. In the Dark Zone, you don’t want to be stuck holding a contract that you wish you didn’t have because you can’t get rid of it. There is no one that can take it from you during the Dark Zone. This is another reason that you don’t want to hold on to your contracts until expiration. Don’t get greedy! Get in the trade, take your profit and get out.

When trading 5-minute binaries the same rules apply. You want to buy low and sell high. It does not matter if you sell first or buy first, as long as you keep these basic rules in mind.

You have to still have good risk management. Never take a trade just because it has low risk or looks like it has potential. You must have a reason for every trade you take. With good risk management, you know when to stop whether you are up or down in your trading day. You don’t want to risk giving back all of your profits for one more trade. You need to know what your risk tolerance is in accordance to your account size. Here is an article to read that is full of good information on Risk Management.

It is an exciting thing to learn something new. Learning how to trade binary contracts can be rewarding. It is very important to follow the steps when learning something new and try it out with as little risk as possible. Demo trade first. Master a strategy before you move onto something new. Ask questions and implement the answers.

If you would like to try out the binary scanner or learn other ways to trade the 5-minute binary contracts, go to www.apexinvesting.com. Apex Investing Institute offers free education, and free access to the Nadex Binary and Spread Scanner Analyzers. Member traders are invited to trade in the chat rooms, take advantage of trade signal services, use key indicators and access the Apex Forum. The forum content is updated daily and includes over 9000 members. In a supportive learning community of seasoned as well as up and coming traders, traders of all levels learn how to trade Nadex binaries and spreads in depth, as well as futures, forex, stock and options, and gain an edge for successful trading overall.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Get Your Sign-Up Bonus Now!

  • Binomo
    Binomo

    Good Broker For Experienced Traders!

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