Risk Free Binary Options Trading ¦ Binary Options South Africa

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!

A Realistic Approach To Binary Options Trading In South Africa

There is a lot of discussion going on about Binary Options as a means of getting additional income in South Africa and as a result, Binary Options trading is getting more and more popular. Several times, it has been portrayed as a solution to all your financial needs with the possibility of making tangible sums of money in minutes, but in reality, is this the case? Let’s explore the real aspects of Binary Options trading and all there is to know.

What is Binary Option

A binary option is a financial derivative in which the investor forecasts the price direction of an underlying asset such as stocks, commodities, indices, currencies and even events. If the forecast is correct, the investor earns a fixed sum of money. If not, the amount he loses is also fixed. Basically, a trader/investor would have to foresee if there would be a rise of fall in the value of the underlying asset within a certain time frame and make predictions accordingly.

Popularity and Regulation of Binary Options Trading in South Africa

Binary options trading is becoming increasingly popular in South with a growing number of people getting involved. There has equally been a comparative increase in the number of brokers offering this option of trading.

The activities of Binary Options brokers fall under the regulations of Financial Services Board (FSB) which is the governmental entity that monitors organizations that are in the field of financial services with the aim of ensuring that consumers’ rights are protected.

Key Things You Should Know About Binary Options Trading

As with any other type of trading, there are key things you should know about binary options before starting to trade:

  1. Binary Options Work With Stocks, Currencies, Commodities And A Lot Of Other Assets

Binary options are considered a financial derivative. What this means is that each trade has an underlying asset in the form of stocks, commodities, currencies etc. However, you are trading on the price movements associated with these instruments and not on the instruments itselves.

  1. You Can Know your Profit/Loss Beforehand

Unlike the regular day trading, in Binary Options trading, you get to know your profit or loss before you make a trade

  1. Strike time, Strike Price and Expiry Time Are the Key Components you Should Familiarize yourself with

A strike time is basically the time at which a trade was placed and the amount placed is the strike price while the expiration time is the moment when the binary option expires.

Let’s say the trader chooses an instrument like Microsoft stock and the binary option has an expiry time of 2 hours then, he predicts if the stock would have dropped or increased in value at the end of the 2 hour period and If the stock goes in the predicted direction, the investor earns a profit and if it goes against the direction of prediction, a loss is recorded.

  1. You Can Only Lose Up to Your Initial Investment

There are no margins or additional losses in binary options trading. Thus, you know how much money you will be risking before committing to a trade.

  1. Don’t Overlook Risk Management

In any type of financial trade, risk management should always be taken into consideration. The rule of thumb in terms of risk management is to not invest more than 2% of your total capital on any single trade. That being said, if you have $500 to invest, don’t invest more than $10 on a trade. This will ensure that you will have enough trades to recover in case of an early loss.

  1. Binary Options Isn’t a Get-Rich-Quick Scheme

Unlike what you may have heard from many dubious brokers, you won’t get rich overnight with binary options. There is a learning process to binary options and it could take some time to master it depending on your commitment.

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!

Why Research is Very Important in Binary Options Trading

A good trader needs to understand the risks and the rewards involved in these often-misunderstood instruments. To achieve a level of success, a certain amount of analysis (both fundamental and technical analyses) should be done especially with respect to how trending news in the company, industry, country or region might affect the price of the asset. This helps the potential investor to predict with some level of certainty, the foreseeable price direction of the financial instrument of interest.

Importance of Selecting a Reliable Broker

Many binary option “brokers” have had history of questionable operations, data and price manipulations, promising unrealistic results, refused or stalled withdrawals. In such scenarios, there is no real brokerage in its sense rather, the customer is unwittingly trading against the broker. To advise traders against such unethical behaviour, services of platforms like binaryoptions.org.za which review and recommend brokers based on various standards of measurements are usually helpful.

Here are six steps to take when choosing a reliable broker:

  1. Capitalization and Trajectory

It is better to choose a broker that has a rather large capitalization. The amount of capitalization almost always attests as to the reliability of the broker. This is because capitalization shows a solid business with good capital and ability to offset risks. Also, ensure the broker has its share of experience in the field.

The more assets offered, the more trading opportunities you will have to diversify your risk.

  1. Check Out Terms and Conditions

Also, read the terms and conditions of your binary options broker. This is especially true for brokers that offer bonuses. These bonuses many have many restrictions. This way, you can choose the one broker that favours you the most.

As with any other service, you want to be sure you get help when you need it.

A payout that ranges between 75% to 90% in this industry. The higher the payout, the higher your profits

Binary Options can be a good way to generate additional income if research and analysis is done well but as with any other type of business activity, it is important to prepare oneself beforehand before engaging in it.

The activities of financial service providers in South Africa are regulated by the Financial Services Board (FSB). Ensure that any broker of your choice is regulated and has valid FSB licence and registration number, this way, you are guaranteed an acceptable level of safe trading and transparent deposit and withdrawal process.

Forex Binary Options Risk Hedging Strategy

When does a trader become more professional? In many ways, when his main task is not to earn more, but earn with minimal risk. It is at this moment that he begins to interest position hedging strategies.

If you start to understand this issue in more detail, you can find many trading hedging strategies that are considered successful and worthy of attention. Among them you will find locking, i.e. opening the opposite direction of the transaction for the same asset (example: initially unsuccessfully open transaction buy by EURUSD hedged by a deal sell by EURUSD, while the size of the loss is in the “lock” until the moment when it is not possible to close both positions in plus or with minimal loss), hedging asset with a high positive or negative correlation (example: transaction buy by EURUSD insured by a transaction buy by USDCHF; assets traditionally have a high negative correlation), and others, on a principle similar to these core ones.

Other binary options articles

Binary Options Hedging

In this article, ForTrader.org magazine suggests you try another version of a hedging strategy that uses an asset from another market, but similar in nature to the main one. We are talking about binary options on currency pairs. ABOUT the concept of binary options, & lt; / RTI & gt; types of and application, we talked a lot in previous releases, so we only recall that binaries are a simplified derivative financial instrument, similar in logic to “betting” transactions. At the same time, having a high percentage of profit with a positive execution: 80-100% and higher, with a loss the size of the contract is completely lost. In addition, the basis of a binary option can be any other traditional asset: stocks, indices, bonds, futures, metals, including Forex market instruments.

So what does this give us? The basis of a binary options trading hedging strategy is solely the fact of a high percentage of profit, which can cover the losses of traditional trading with the correct calculation of risks. Consider an example.

Using the One Touch Binary Option to Hedge Risks

So, we have an open position to buy at EURUSD 1 lot at a price of 1,35914 with stop loss at the level of 1,35503 (41 points) and takeprofit at 1,36822 (91 points). We opened the deal on the basis of technical analysis (see Fig. 1).

At the moment, the deal is in positive territory and we are confident that the price will move up, however, we do not want to lose the profit we have already made. In this case, there are several options for further action:

  • Continue to hold the position unchanged.
  • Close position with current profit.
  • Set a stop order in the breakeven zone.
  • Hedge a position.

How to work on the first three points, everyone knows, and the choice among them depends entirely on the strategy of the trader. But what does it mean “hedge a position“, Let’s figure it out.

So, we assume that EURUSD will grow at least one more day, and in general with a high degree of probability it will close on takeprofit. But there are still fears of a strong pullback, for example, in case of news release from the Fed in a negative way, so we have a desire save your money.

Fig. 1. An example of an open transaction.

To do this, look first of all at our stoploss. He makes up 41 item, taking into account the deposit, leverage and transaction volume, 1 point at us costs $ 10. As a result, under adverse circumstances, our position will close at a loss 41 * 10 $ = 410 $. With a good combination of circumstances, the profit will be 91 * 10 $ = 910 $. Therefore, when buying an option, we need to win back at least $ 410. Given 90% profitability, we need to buy one-touch contract for 1 day for sale at a price of $ 460 with profitability in case of execution of $ 414.

What do we do as a result? The “one touch” option works in such a way that for any touch of the price of the mark indicated by us, we get a designated profit. At the same time, a stoploss transaction is being closed, therefore, having a loss on a currency pair of $ 410, we get a profit of $ 414 on the option. The difference of $ 4 is taken away. In the case of continued movement and triggering of takeprofit, our profit decreases by the size of the contract: $ 910 – $ 414 = $ 496. In both cases, we remain in the black.

Nuances of using binary options hedging

It is important to understand that using a binary hedge option is only profitable when profit on the main trade is significantly higher than the stop.

Also, existing profits should be considered: if it is higher than your earnings if takeprofit is triggered, minus a hedging position, then, of course, it is more reasonable to simply close the deal. Those. in our case, if the current profit is already 50 points or $ 500, or close to that, then it is more profitable to take profits than to hedge with a maximum increase in output of $ 496.

Also, when working with options, you should include the time parameter in your strategybecause it is mandatory when concluding a deal with binaries. If you are not sure that during the day, as in our example, there will be flat movement, it is better to use the break-even transition, so as not to get two minuses instead of one small plus.

One way or another, as in any other form of insurance, you bear certain risks. It is required to think over options in advance and calculate profitability, especially in transactions with binary options. However in many cases this method is very profitable, especially if you are trying to withdraw the account from the minus with already locked positions.

FORTRADER magazine experts

FORTRADER Magazine is a large team of experts in trading in financial markets. Traders, managers, investors, programmers, testers, technical administrators – we all work for you every day for many years. Sometimes we write articles together, then the whole journal becomes the author.

Free Binary Options Signals – Are They Really Free?

There is a saying that if something good is for free, then it can’t be that good. Free binary options signals is no exception, however there are a few legitimate ways to receive quality signals for free.

Today, in the age of aggressive technological progress we are often bombarded by a multitude of products and services for free. However, as we all know, these so called freebies always have a catch.

There are five major promotional tools that push the offer of free binary option signals online:

  1. Free automated signals offered to users via a trading robot
  2. Free signals when users join a specific broker
  3. Free signals by self-proclaimed ‘trading gurus’
  4. Trading indicators with free signals
  5. Free signals provided on social trading platforms

In many cases all three promotional setups and methods ultimately lead to the same purpose, to get the users to sign up to a specific broker.

Binary brokers spend a lot of money on various promotional tools to get as many people trading on their platform as possible. Running this blog we also get offers from many binary options brokers who want a platform to advertise their service.

Free signals offered for users if they subscribe to auto-trading

There are many binary options trading robots available online. They are often being marketed as free signals. Most of the binary options robots are free to sign up, however as trading requires to deposit money with a binary broker, many free trading robots force users to sign up to a specific broker. Sometimes the user is offered a few brokers to choose from within their trading robot system.

One of the reasons the trading robot signals are offered for free is because with each new user sign up the trading robot owners will be paid commission from each user and also a percentage from his/her additional deposits. Most brokers pay about $200-400 per each new qualified user (a client that deposits money), so 50 new users per month will make 10.000-20,000.

Letting a robot trade your account using fully automated signals can be extremely risky, but there is a lot of people who will argue the case for automated trading. They claim it as trading with no human emotion, which can be quite effective but it works much better in Forex trading which allows greater risk control and stop losses.

Too many people heard of high-frequency trading by robots and AI that is used in Forex on daily basis and they assume this is very similar. However, this type of automated binary options signalling service has nothing to do with high-frequency trading capabilities.

In HFT companies use very expensive and complex AI systems and computers directly connected to the markets, this is not the case with any binary option broker or any binary option robot.

Free signals when users join a binary broker

Many brokers have realized the potential of acquiring new clients by offering them a binary options signal service. Usually they guarantee a certain percentage of wins. It used to be that these signals were issued by the actual brokers themselves, but now the signal services offered by brokers are provided by a third party company or professional freelance traders.

This makes the system a little bit more neutral because there seems to be no conflict of interest. Remember that when you trade binary options you essentially trade against your broker and other traders. For this reason some brokers have recently closed free signals offers in exchange for other incentives.

If you find a broker that still offers a free signalling service, remember that just as we mentioned in the beginning of this article, nothing is for free. The idea is that when you sign up to a signal service with a particular broker you will trade on the signals.

The more you trade the more money the broker is able to make. It’s that simple. Although those free binary options signals might achieve a certain rate, reaching that level in a live environment is seldom possible due to server delays, late entries, or other aspects.

Free signals by self-proclaimed ‘trading gurus’

There are also many traders who offer free binary options trading signals to their subscribers. The reason they are free is the same as in the previous example. The subscription emails include offers to various brokers or one specific broker the ‘trading guru’ is affiliated with and gets a commission from them for each new sign up.

Alternatively there might be a different catch such as premium signalling service for which you need to pay a monthly subscription fee. So the free signals will be quite poor but the premium, subscription based signals will be much more accurate.

The free binary option signals offered by a ‘trading guru’ usually also include guidance, trading advice, as well as other information. Subscribing to this type of service is actually least invasive of all three. Usually it only involves giving out your name and email, as oppose to your mailing address and credit card.

Although this type of service might actually work well and be very informative, many of the ‘trading gurus’ take the easiest way out and send signals that are actually fully automated.

They usually use custom indicators to construct a free binary options signalling service. One of the most widely advertised free signals are John Anthony’s which supposedly are completely free. But let’s have a look at the most recent 18 trades based on those signals.

As you can see in the above screenshot out of 18 trades the signals were correct only 9 times, that’s a 50% success rate.

With this type of winning rate you would lose money. To understand the advantage that is necessary to win at binary options please read our post on whether it’s possible to make money in binary options.

50% of wins is never enough to win at binary options, regardless of which binary broker you use. 50% of wins will eventually drain your account.

So despite the fact that John Anthony’s signals are completely free, what use are they if you lose money on them? The only way to use such signals is for reference only, they are not to be traded on.

An experienced trader who receives such a signal should take a very good look at the charts and decide, using his or her market and analytical expertise to confirm each signal.

But if you at this level of trading, you don’t need to use an external signalling service. You can create your own signals.

So who subscribes to these type of signals?

Unfortunately, the people who subscribe most to such binary options signals are usually those who fall for the marketing and the empty promises of the people who run the signalling service.

Those who subscribe to such services don’t confirm any of the signals, they just trade on them. Unfortunately, more often than not, the end result is that they lose money.

Free signals using quality indicators and advisers

Another way to obtain free signals is via a trading indicator for MT4/MT5 or other trading software. Indicators are simply trading algorithms that are programmed for a specific trading platform such as MetaTrader. These platforms are free of charge and can be downloaded online and installed on your computer and used completely free of charge.

By default they come with the most common indicators, such as Moving Average , Commodity Channel Index, Volumes, etc. but there are thousands of custom indicators that are designed to do a lot more than the available indicators.

Custom indicators are usually built with a few indicators and their main use is to find trading opportunities and produce alerts. These trading signals can be visible on the chart, issue a pop up alert, or even send an email or text message to your phone alerting you of a trading opportunity.

There are thousands of free and paid technical indicators and Expert Advisers available for the MT4 trading platform.

Unfortunately, free indicators rarely include technical support and have limited features.

If you would like to give it a go with a free indicator to see how it works, you can use our Free BinaryViper MT4 indicator with signals.

In order to receive free signals via push notifications, SMS, or email, your MT4 trading platform will require additional configuration.

This whole experience of downloading, installing, and configuring the platform and the indicators or EA can get a bit technical and time consuming, so perhaps it’s not ideal for everyone.

There are many free custom indicators but there are also many paid ones also that often include support and whose coding is usually written to a much higher standard.

One of the best features of MetaTrader is that it has it’s own programming language (MQL4) and it can run automated trading strategies, known as Expert Advisers (EAs) that can be backtested and issue trading signals as push notifications, emails, or text messages.

Advisers can contain a number of indicators and specific trading rules. In fact, many of the binary options trading signal providers use Meta Trader Expert Advisers for technical analysis and signals issuing. This is nothing new.

This option of getting free trading signals via the MetaTrader platform obviously has a big learning curve. And in order to get high quality signals, your EAs or indicators must be very well configured and backtested. This will take a lot of time, especially if you’ve never done it before or you don’t know much about technical analysis and trading.

Luckily, there is another, easier option. It’s called social trading.

Free signals using social trading apps

Recently the newest attraction for the retail trader is the concept of social trading and copy trading. The idea is quite simple and most binary brokers today also offer some type of social trading feature. One of the most common ones is the percentage bar of buyer/seller preference on a given asset.

Etoro is the most innovative social trading broker in the world. It is also fully regulated in the EU, UK, and Australia.

They simply took social trading to another level. They built their entire online platform for a large community of traders to exchange ideas and copy trades of the best traders. Etoro is by far the biggest player in the social trading scene and it boasts millions of traders around the world.

When you sign up to their platform you will be able to search active traders and seek out the most successful ones based on the complex metrics of the system. Then, using the eToro’s copy trading feature you will be able to copy their account and their future trades.

In addition to standard Forex, the eToro social network also offers the possibility to trade many company stocks, indexes and cryptocurrencies. The company has been on the market since 2006 and it is the largest and most innovative social trading platform in the world.

There you can get free trading signals and trade suggestions and automatically copy the best-performing traders. You can also follow chart analysis and trading ideas for each asset as they are freely shared by traders on the network.

eTORO also offers various hands-off funds management. There are many funds to choose from, for example technology fund (Alphabet, Facebook, Amazon, etc.), energy sector fund, game companies fund, cryptocurrencies fund, etc.. The only caveat is that to join any particular fund, you need to deposit minimum $5000 into it. These funds are managed by professional traders.

There are other binary and CFD brokers that offer social trading features but eToro is by far the biggest and the most popular one.

Remember, stay safe and test all signals on a demo account first!

Binary Options Risk Free Trading, Does It Really Exist?

Is there really such a thing as a risk free trade in this day and environment? In the world options and binary options, the term “risk free trade” has various meanings, so let’s explore some of those meanings to make sure a trader knows the difference between risk free and free of risk.

Binary options risk free trading can be interpreted to have different meanings depending on if you are the binary brokerage or a binary trader. The term “risk free trade” needs to be taken into context when having a conversation about what a risk free trade is, and is not, in the binary options world. Let’s start with the basics. Some brokers, like Binary International, offer demo accounts with fake money in it for trading. Binary International currently offers all new traders a $100,000.00 trading account to test out our software and to get used to binary options trading before going live with real money. Those trades, the ones executed in the demo account, can be considered risk free trading since all the money is fake and set up for practice trading before going live.

The second instance of binary options risk free trading is when a client deposits a certain amount (usually starting at $25,000.00 at a broker) and as part of their trading level bonuses, they will get a risk free trade or two. That means they can bet real money on a binary trade, and if they lose, the brokerage will cancel the trade or take the loss. These VIP and platinum level memberships also include a 200% bonus, lower rollover standards, and maybe a new Ipad or laptop. In this case, a risk free trade is just that, a change to make money and win a trade, and if you lose, the trade is simply cancelled or removed from your account.

The third instance where binary risk free trading is referred to is when a trade is hedged perfectly so that you make money either way. This is similar to sports betting where a bettor takes both sides of a football game at different spreads so that you win money either way. This technique, known as “middling” in sports betting can cap your win amount, but guarantees you will not lose money. In the binary options world, a perfectly hedged trade, say on an outside the boundary and breach position could create a positive result no matter what the underlying asset does. This is also referred to as a risk free trade, since all risk has been removed from the results. This is where a trade scenario has created a win/win scenario and no matter what happens, the trader will be positive on the trade.

Risk free in the investment world usually applied to such safe investments as annuities, and until the 2008 market correction, bonds and money market accounts. The term “risk free” when applied to more volatile markets such as the forex market and binary options market, comes with a bit of an asterisks next to it. One, make sure you understand how the term is being used and who is presenting the term to you. Is it a broker or a trader? Two, if it truly is a risk free trade, whether it is fake money, a loss is cancelled by a broker, or a trade situation guarantees a win, make sure you protect your bankroll and account so that no real money is lost.

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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