IQ<\/a>\u00a0Options introduces the basics of forex trading for beginners:<\/p>\n <\/p>\n
Benefits of trading the forex market<\/h3>\n
One of the biggest advantages of options trading in the forex market is that brokers are flexible and allow you to trade variations.\u00a0Moreover, you can achieve high returns of 80% or more within minutes just by predicting the price movements of currency pairs.<\/p>\n
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Make the most of your forex trading<\/h3>\n
A typical trade involves choosing a currency pair.\u00a0For example, you choose EUR \/ USD and decide whether the pair will end above or below the current price within an hour.\u00a0You will choose the ‘Call’ option if you predict the price will move up or the ‘Put’ option if you feel the price will fall below the current price.\u00a0If the closing price exceeds the price you bought with the ‘Call’ option, you will be ‘in the money’ at the time of expiry.\u00a0If you choose the ‘Put’ option and the closing price is below the price you bought, you will also be ‘in the money’ and make as much as 60 to 80% or more on the trade.\u00a0Even the smallest fraction of a tap above or below your strike price can generate you a profit in less than an hour.\u00a0however,<\/p>\n
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With a short expiration period you can take advantage of any news event that could trigger market volatility rather than placing a stop-loss.\u00a0One of the most interesting applications of forex binary options is that they can be used as a powerful hedging tool.\u00a0It allows the trader to transfer any risk from below the point of purchase to above it.\u00a0If you take a traditional EUR\/USD position with a traditional stop\/loss and also buy a binary ‘Put’ option, you are likely to cover the loss or profit in the event of an unsuccessful old position trade.\u00a0The risk is transferred from below the stop \/ loss to above it.\u00a0If the rally continues in the right direction, you can end up with a successful trade.\u00a0This makes investing in binary options more fun, interesting,\u00a0and less stressful for beginner traders as well.\u00a0For more on hedging, read this great article by Mifune.<\/p>\n
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The Basics of Binary Options Forex Trading<\/h3>\n
One of our professional traders, and founder of a money management firm and trading advisor, shares his thoughts on the basics of forex binary options trading and the system he personally uses.\u00a0<\/i><\/p>\n
The strategy I want to talk about is a secret \u2013 but it’s also not very common \u2013 and the reason for its success is its simplicity.<\/p>\n
The currency pair that I trade the most (90%) is the euro dollar pair.\u00a0This is simply because it is the most volatile and predictable pair.\u00a0The Euro-Dollar is the most traded pair, and since the opening of the Forex market to retail investors, its daily volume has increased dramatically.\u00a0The Euro-Dollar is also a common pair used by financial firms to hedge their clients’ income against market swings.<\/p>\n
The main problem I see every day when reading through binary options forums, is the amount of different strategies.\u00a0It seems that traders think that the more complex the system, the better the profit.\u00a0Then, when they fail, they blame the system they are using, when in reality, the problem is behind the screen.\u00a0No system will adapt to ever-changing market conditions;\u00a0it is up to the dealer to adjust the approach.<\/p>\n
I know that some think that this will not work in market conditions or this, but they forget that the market itself is binary;\u00a0prices can only go up or down.\u00a0Such a thing as a revolving market does not exist.\u00a0Also every trading system is essentially the same \u2013 the job of the system is to detect the best entry and exit points for the trader.<\/p>\n
For example: An experienced trader will quickly spot support and resistance levels on a chart.\u00a0Rookies won’t.\u00a0A rookie will implement a strategy using stochastic, MACD and RSI, but what he doesn’t realize is that these indicators give him the same entry as using an experienced trader.<\/p>\n
Disclaimer: This section represents my personal opinion and the strategies I personally use.\u00a0Please read everything carefully, and don’t jump into using a high-risk strategy before fully understanding how the strategy works.\u00a0Please trade using a demo account before going live.\u00a0This strategy is the Holy Grail for me because I’m not too greedy and if I don’t feel like trading I just pass, and wait for the next one.<\/p>\n
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Forex Basics<\/h3>\n
It is important to understand what forex is and its main use is: Currency exchange governed by the laws of supply and demand.<\/p>\n
A simple hypothetical example: Apple sold 1 million smartphones in Europe in September for 500 euros a piece with the Euro as the base currency, they deal through HSBC, which means their invoice savings account is under HSBC.\u00a0But Apple reports in dollars, and the administrative account is with BOA.<\/p>\n
So Apple made 500 million euros which is now sitting in their HSBC account in Luxembourg.\u00a0The money needs to be transferred to their BOA account and converted to USD.<\/p>\n
Now it gets interesting.\u00a0Transfer orders come in on Tuesday at 4pm GMT.\u00a0It will not be transferred immediately.\u00a0The bank collects all dollar orders at night.\u00a0Order can be from yesterday or a month ago.\u00a0Banks send operational orders to their partners (like us) and commission structures, and order deadlines.<\/p>\n
The Euro-Dollar traded on Wednesday at 6 GMT at 1.27000.\u00a0Apple’s account at BOA will receive 635 million USD at 8am EST.\u00a0This order is set at 1.27000.\u00a0What about us, and both banks get the maximum profit from the order?<\/p>\n
BOA gets their commission from Apple, but what about HSBC?<\/p>\n
At 8am GMT, London opened, liquidity was 380 million euros, and the price was 1.27010.\u00a0So 500 million euros is equivalent to 635 050 000 USD.\u00a0Not good enough anymore, and can’t be done because there isn’t enough money left in the market.<\/p>\n
The Euro outlook is bullish, Asian markets are up overnight, and the US fiscal cliff is getting resolved.\u00a0Millions of investors and retail stores take BUY orders and place stops 10 pips below the current price.\u00a0The pending market is 300 million euros and the current liquidity is 380 million euros.\u00a0Therefore, the equivalent amount of liquidity in USD today is (1.27010) 482 638 000 USD and 381 030 000 USD outstanding (equivalent to stops).<\/p>\n
The data tells us that the stop is at 1.26910, so at 8.15am GMT, the order came to SELL 2.8 times the available liquidity (a sell order of 840 million Euros) this pushed the price to 1.26905, where OUR (Banks + us) BUY orders are triggered and retail investors place new buy orders to cover their losses.\u00a0The price went up to 1.27099, and this is when we started to gradually exit our BUY position, and since the trend still looks strong, people buy our orders.\u00a0On your chart this is shown by the green candle getting smaller in size after a good run up.<\/p>\n
So the market liquidity jumps to 380 + 300 = 680 million euros, and we exit at 1.27099 for a profit of 9.9 pips (from 1.27000).\u00a0Not much to say, but we were given 10 leverage from Barclays on our position for a commission of 0.1 pip.\u00a0Therefore, our 500 million euros has a leveraged market value of 5 billion euros, or 5 billion \/ 100 000 = 500 000 lots X 10 USD = Pip value 5 million USD X 9.9 pips = 49.5 Million USD or 36.1 million euros.\u00a0This is then shared between HSBC, us and Barclays.<\/p>\n
The numbers above are just an example, the truth is that the amount is huge (4 trillion USD per day) and many players, but the example is to show you how FX works, and this is necessary when analyzing the levels and trends of SR.<\/p>\n
The SR levels are defined by the Big (Smart Money) players and they also hold up well because retail investors use them as well.\u00a0The smart money cycle takes place in 3 price rounds, and then we see a short-term channel where price is stuck for a little bit of accumulated strength (GBPUSD last week during the US session).<\/p>\n
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Forex System \u2013 Fibonacci<\/h3>\n
These price cycles do not happen randomly, they have a sequence, and in fact every candlestick or price move has a cycle in it and a sequence.\u00a0This sequence is defined by a set of numbers called Fibonacci numbers.<\/p>\n
Fibonacci numbers were not developed for trading, and they occur everywhere around us, where many biological systems can be described in terms of Fibonacci-like sequences.<\/p>\n
The big players don’t use indicators like RSI, CCI or MACD, their algos are based on Fibonacci numbers.<\/p>\n
And combining Fibonacci algos with a very accurate price channel calculator and information on how other people trade, you get a formula to rule all other systems and strategies.<\/p>\n
Now, why should you care when trading binary options?\u00a0Because unlike with spot FX, you have to be right every time.\u00a0Basically you need to have the ability to predict whether the candle will be red or green.<\/p>\n
During day trading that does not involve Smart Money orders, I want to use a simple bag, so I need to use something that defines the cycle of price moves and reversals.\u00a0For binary and fx day trading place I use 3 indicators with very accurate functions.<\/p>\n
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Forex Relationships<\/h3>\n
Correlation relationships are important trading tools.\u00a0If you don’t know what they have, they may be hurting your trading without you even realizing it.\u00a0Correlations show us which forex moves together, which move in opposite directions, and which have very little relation to each other.\u00a0This information then helps us determine which trades to take, helps control risk, and may provide additional trading opportunities that are not readily apparent on the price chart.<\/p>\n
Forex coordinates are usually shown in a table, with values \u200b\u200bfrom -100 to 100. A value of -100 (a negative number called\u00a0\u00a0inverse<\/i>\u00a0correlation \u00a0) means that two forex pairs move exactly opposite to each other-when one goes up the other falls, and when one another fall.\u00a0A value of 100 means that two forex pairs move in sync \u2013 when one rises the other rises, when one falls it falls again.\u00a0It is very rare to find an asset that has a 100 or -100 correlation to another asset.\u00a0Although as figure 1 shows, there are some forex pairs that have a very high positive or negative correlation with each other.<\/p>\n
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Figure 1. Daily Forex Correlation (July 25, 2013)<\/em><\/p>\nConsider anything over \u2013 \/ + 70 to be a noteworthy correlation, whereas anything over \u2013 \/ + 80 a strong\u00a0\u00a0correlation<\/i>\u00a0\u00a0.\u00a0Using the chart above, look for GBP\/USD on the left and then look for EUR\/USD along the top, then scroll to the box where the rows and columns meet.\u00a0It shows that the correlation between GBP\/USD and EUR\/USD is 89.6.\u00a0This means that most of the time, every day they move in sync with each other.\u00a0This is important to know the reasons that will be discussed in the next section.<\/p>\n
Now, look for USD\/CHF on the left, and then EUR\/USD along the top.\u00a0Find the box where the row and column meet, and it shows that the correlation between the two pairs is -95.4.\u00a0This means that they share an\u00a0\u00a0inverse correlation<\/i>\u00a0\u00a0very strongWhen EUR\/USD goes up, USD\/CHF goes down, and vice versa.<\/p>\n
Sometimes there is no relevant correlation.\u00a0If a pair has a correlation value (positive or negative) less than 60 the correlation is not very strong, and when we approach 0 there is no correlation between the pairs at all.\u00a0Take for example NZD\/USD and EUR\/USD;\u00a0the correlation between this pair is -1.7, which means there is no correlation, on a daily basis, between this pair.\u00a0In other words, the rise or fall of NZD\/USD tells us absolutely nothing about what EUR\/USD might do.<\/p>\n
Correlation charts are usually offered based on timeframes, daily and weekly charts.\u00a0All of these timeframes provide valuable information depending on the timeframe you are trading.\u00a0For short-term trading, hourly and daily correlations will be most important.<\/p>\n
It is also important to note that the correlation changes over time.\u00a0A couple that has a very strong correlation now, may not be on the way.\u00a0Therefore, it is important to monitor the correlation by regularly being aware of changes in the relationship between the couple.<\/p>\n
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Why does Forex Goal happen?<\/h3>\n
There are several reasons to care about forex correlation.\u00a0The main reason I monitor them is to control risk.\u00a0For example, you may think that by taking several trades at once you are “diversifying.”\u00a0That may not be the case.<\/p>\n
If you go long (buy calls) in EUR\/USD, GBP\/USD and sell (buy puts) USD\/CHF you have basically taken 3 very similar positions.\u00a0If someone is against you, they will probably be against you.\u00a0You don’t reduce your risk through diversification;\u00a0you have actually doubled your risk!<\/p>\n
Another reason for correlations is that they can give you trades you might not otherwise see.\u00a0For example, you believe the EUR will appreciate against the USD (ie EUR \/ USD will go up), but you look at the chart and don’t see a great trade setup.\u00a0Since you know that GBP\/USD usually moves with EUR\/USD (based on the current correlation), you can also check GBP\/USD to see if there is a better trade.\u00a0You may also want to see if there is a trade set to go short (buy puts) in USD\/CHF as it usually moves in the opposite direction of EUR\/USD.\u00a0A high correlation (positive to negative) gives you an alternative trade;\u00a0choose the one with the best trade.<\/p>\n
I also like to use forex correlation to confirm trades.\u00a0When looking for forex pairs with a high correlation, I will use one pair to confirm trades on the other side.\u00a0For example, if EUR\/USD goes up, and I want to go long (buy a call), I also want to see GBP\/USD go up.\u00a0Since this pair is highly correlated, they need to move together.\u00a0If they don’t, it warns me that maybe I should take a closer look at my trades.\u00a0This doesn’t mean I won’t take a trade\u2014because correlation changes and two pairs never move perfectly in harmony\u2014it just means I have a very good reason to take a trade (as you should).<\/p>\n
<\/b>Correlation can be a complicated statistical topic, but hopefully this introduction will get you familiar with the concept to do a little homework on your own.\u00a0Check correlation studies regularly to find out the relationship between forex pairs that may affect your trading.\u00a0Use correlation data to control risk, find opportunities and filter trades.\u00a0If you have trouble seeing how the correlation works, try looking up the numbers in the correlation table and then pull up a price chart of the two forex pairs in question.\u00a0Notice how the pairs move relative to each other;\u00a0doing this will help establish a general understanding of the correlation.<\/p>\n
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Forex signals<\/h3>\n
Forex represents a rich hunting ground for signals and alert services.\u00a0With no major market, and multiple driving factors, volatility is high.\u00a0Forex pairs are traded 24 hours a day, for 5 and a half days a week.\u00a0The volume of trading currency transactions is huge.\u00a0All these factors mean that the opportunities are huge, and signal services provide regular trading recommendations.<\/p>\n
As a more robust trading vehicle, signal providers for forex are more robust than binary platforms.\u00a0Most of the best services have been running for 10 years.\u00a0Therefore, potential customers can check a large number of past performances to see how good the service is.<\/p>\n
Service providers also have greater confidence in their systems, given their long-term performance.\u00a0For merchants, this means a free trial, or a discounted membership for new customers.\u00a0Signal services know that traders will only be affected by results \u2013 so they encourage traders to give them risk free.<\/p>\n
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Best Forex Signal Provider?<\/h3>\n
We have seen many forex signal services, and related advertisements.\u00a0For us, results are important.\u00a0To that end, we recommend\u00a0\u00a0Signal Hive<\/strong>\u00a0\u00a0to deliver the best forex signals, and here’s why:<\/p>\nTake a look at these monthly performance figures \u2013\u00a0\u00a0since 2004<\/em>\u00a0\u00a0:<\/p>\n![\"\"](\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2019\/12\/Signal-Hive-forex-signal-performance-1024x475.png\")
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This service, named Master T-2000 v2, has delivered annual profits for nearly 14 years.\u00a0Signal Hive is a marketplace for different, but most consistent systems.\u00a0The performance of 14 years cannot be ignored.<\/p>\n
Importantly, you don’t have to take our word for it.\u00a0The system is available at a free trial that the firm operates.\u00a0Therefore, you can receive this signal for free, without risk.<\/p>\n
This software can be automated with several major brokers.\u00a0With MetaTrader 4 integration and real-time indicators, the software is as good as we’ve seen.\u00a0After the free trial, the full pro service costs $50 per month.\u00a0If you are not satisfied after the trial period however, just walk away.<\/p>\n
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Drill down to Signal Details<\/h3>\n
Outside of the numerical title, the system is very consistent.\u00a0Data can be analyzed every hour, or day of the week and over the long term, every single period is profitable.\u00a0Therefore the software and algorithms only select solid trades.<\/p>\n
Hive Signals provides a variety of signals though \u2013 as the name suggests.\u00a0In addition to Master T-2000 v2, there is a system called MELISA (Multi-Entry Logic Investment And Algorithm Savings).\u00a0This algorithm works well during turbulence in more traditional markets.\u00a0Again, it has shown profits every year for the past 14 years.\u00a0With investors looking for a safer haven at this time, this system may provide an element of diversification.<\/p>\n
All of these systems and more are available at Signal Hive, and with no strings attached, free trials on offer, there’s no harm in giving them a try.<\/p>\n","protected":false},"excerpt":{"rendered":"
Forex trading is one of the most active and volatile markets \u2013 making it ideal for traders.\u00a0Our guide to forex trading provides a starting point for beginners;\u00a0plus tips, strategies and education for experienced investors too.\u00a0We […]<\/p>\n","protected":false},"author":1,"featured_media":3448,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[101],"tags":[136,123,111,137,107,108],"class_list":["post-4599","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-forex-en","tag-24option-en","tag-akaun-demo-en","tag-broker-en","tag-dagangan-forex-en","tag-pilihan-binari-en","tag-pilihan-iq-en"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4599"}],"collection":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/comments?post=4599"}],"version-history":[{"count":4,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4599\/revisions"}],"predecessor-version":[{"id":4883,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4599\/revisions\/4883"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/media\/3448"}],"wp:attachment":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/media?parent=4599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/categories?post=4599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/tags?post=4599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}