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FOREX VS INDICES FOR BINARY OPTIONS

EUR/USD 1.07698 08:10 06.12
FTSE F-DEC16 6745.750 08:00 06.12
USD/RUB 63.806 08:00 06.12
USD/CHF 1.00590 08:00 06.12
OIL-FEB17 (BRENT) 54.685 08:00 06.12
COPPER-NOV16 2.6553 08:00 06.12
NZD/CHF 0.71775 08:00 06.12
CAD/CHF 0.75864 08:00 06.12
NZD/USD 0.71357 08:00 06.12
EUR/AUD 1.44544 08:00 06.12
CAD/JPY 85.854 08:00 06.12
AUD/USD 0.74454 08:00 06.12
AUD/JPY 84.756 08:00 06.12
GBP/USD 1.27552 08:00 06.12
VTB BANK 0.068930 08:00 06.12
TENCENT HOLDINGS 190.150 08:00 06.12
ROSNEFT' 350.875 08:00 06.12
GOLD VS SILVER 69.8109 08:00 06.12
EUR/GBP 0.84379 08:00 06.12
OIL-JAN17(WTI CRUDE) 51.435 08:00 06.12
SILVER 16.805 08:00 06.12
GOLD/EUR 1090.185 08:00 06.12
GOLD 1173.311 08:00 06.12
NASDAQ F-DEC16 4779.125 08:00 06.12
GOLD VS OIL 21.4558 08:00 06.12
USD/CAD 1.32590 08:00 06.12
S.BANK INDIA 259.675 08:00 06.12
AXIS BANK 460.725 08:00 06.12
TATA STEEL 414.100 08:00 06.12
TATA MOTORS 443.150 08:00 06.12
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By: Adam Stone
May 9th 2014 6:10am GMT, London UK
 

Binary options traders get ready for another foray into the wilderness that is the financial markets on the heels of some mixed results and higher than normal volatility. For starters, the equity markers in the US are simply unable to do much in the way of solidifying a positive trend. Yesterday, the US stock markets were having what many would consider a fine day only to close in the red with a flurry of selling in the closing moments. These sudden turns should be nothing new to binary options traders and is the primary reason we’ve stayed clear of indices of late. In fact, these increased volatility and more importantly the increased phenomenon of sudden shifts in investor perception has simply dried up the binary options volume on indices of late.

We don’t completely understand why this should be the case. While it’s certainly harder to find longer term trend based trades, the higher volatility ordinarily plays into the hands of binary options traders. So when this type of behavior is seen in the forex markets, we have come to simply shrug it off thinking “hey, that’s the market”. But when it happens on some US equity index it’s more like “whoa, I can’t handle this”. So this obviously looks rather out of sync with the true abilities of binary options traders.

Daniel Gant, the dealing room manager at GOptions, explained it eloquently: “binary options traders are more than capable of creating profitable trades on forex assets and this is seen daily with stable volume levels and ever rising profitability. In fact, the profit margins of customers trading forex and binary options on forex has increased over 12% since January. However, indices, which have usually held approximately 15% of the volume levels, has not increased in profitability for binary traders. Considering a nearly identical behavioral situation, it’s difficult to see why this is the case. However, our analysis shows that binary options traders still have a higher proclivity of buying into a trend as opposed to selling into one. So in other words, binary options traders tend to do much better when the trend is heading higher and when not, it’s all about losses”.

From our perspective, a neat way to combat this negativity is to simply stop thinking about indices as an asset that is expected to do this or that. Yes, they are expected to rise, but that is over months or years. From a daily analysis perspective, binary options traders need to simply latch on to the short term trends and reap the rewards of gauging correctly as opposed to do any more than this. After all, this is primarily what is done in the forex markets anyway. So why do anything different ?

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Adam Stone
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Adam Stone

As COO of GOptions, my first and foremost goal is to provide traders with the most up to date info from the markets. I have been trading the markets since 2004 and have been involved with stocks, binary options, and forex trading since then. I have had no formal market education and pride myself on a self taught approach to everything related to trading. I try to focus though on both the technical and fundamental aspects related to each trading day and bring forward the most important aspects of risk/reward in the market.
Adam Stone
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