What are Binary Options? A look inside the Pros and the Cons

Binary Options are really gaining allot of traction these days, especially with brokers like Banc De Binary surpassing 200,000 account holders and talk of even offering debit cards to account holders first to there VIP clients and then to smaller account holders.  I believe one of the reasons we are seeing such a rise with this type of investment option is because they're very simple to trade.  If you've traded forex before you typically set an entry order(pending order), have a 30-40 pip stop in place and typically a target at the first swing high trendline, next level of resistance, Fib Retracement, or even another custom tool to target  your biased measured move of the market.   But with Binary Options all you need is a strike price of when to enter the market, a direction being Up(Call) or Down(Put) and choose your expiry time for that contract and your trading.  It really is a beautiful thing and quit simple for a beginner, and/or seasoned trader.

Some additional advantages of Binary Option trading are the benefit of super quick expiry times like 60 seconds or longer times like the End Of Day, Next Day or  even as long as the next week or month?
Of course in order for the trade to be valid there has to be a contract available for the expiry time and enough liquidity for that asset(meaning the broker still has contracts to sell you and that they haven't all been taken)or the broker can't sell you that option.  It is pretty amazing that trading these types of options you can really earn 70-85% per trade or if its a "One Touch" trade, meaning the market price either rises or falls to pre-determined level you bought the contract at then it could pay anywhere between 200-550%.  Usually these contracts are over the weekend, like a two or three day trade.

If we were to discuss possible Cons to trading Binary Options I would first have to start with the fact being you have to wait till the contract expires to know if you win or lose.  This is a major difference than if we were trading Forex and our trade went immediately Up or Down.  At that point if we desired we could close the trade and take our profits or slowly take some money off the table and let the rest run hopefully with the Trend.  But with this type of trading you are at the mercy of the market and that your expiry time was a right decision for when to exit the market.

Another Con with this type of trading is if your wrong the majority of your investment is gone unless you opted to receive maybe 5-25% of your investment back after expiry.  But the majority of traders are looking for maximum exposure to receive maximum profits so all is lost if the trade goes bad.  Rather with forex a pre-level stop would exit you out of the market before all your profits would be lost on any one trade.

As with anything its wise to do your research about any Broker, some are definitely scams. At this point in time the binary options world is not regulated by the NFA and CFTC. But I'm sure this will change in the future as our politicians will want to get there dirty hands on any money being made and will regulate it.  Yes there's some advantages with protection but there will also be disadvantages to everyone with all referral commissions ending and no solicitation of any type of security without a Series 7 license. Possible other licenses will be required just as with being an IB in the Forex world.

In Conclusion,    Binary Options are a favorite of mine,  they have allot to offer.  And really if you learn  how they operate they can provide a solid income stream to the novice or professional investor.  I've seen folks take a $200 account and in 41 days have already made over $4,000 on the account.  Not bad huh?   This is very possible if your a good trader, and/or have a solid team of traders working with you in a signal service like http://www.intellitraders.com.    

Happy Trading!

Where are we going Next with Gold? and Weekly Forex Review

Hello traders,

This last week gave way to the GBP/USD coming into a big yearly resistance level at 1.6344.

Since just testing that level and really never breaking through but bouncing off and joining a basket of other currencies with making a solid trend-line down over the long term.   This absolutely begs the question if we are really going to see any rally or "risk on appetite "or whatever you want to call it from the Feds QE3 free for all party or not?
The dollar is sitting on 7 month lows and Gold is at 7 month highs and possible might break the $1800 level this week!  I would watch for Gold to continue higher..   Of course its anyone's guess, but with options expiring this past week I'm hoping markets won't be as choppy and we start to see some action and some greater movement in markets.

With a lighter week on news, still keep an eye out for Thursday with "Italian 10 year Bond Auction" and "Unemployment Claims" as this looks to be more of a volatile day for this last week in September.

have a great trading week!

-david

Weekly Forex Review

This week saw allot of action especially with all the market news shaking the financial world from watching the German Court Ruling to Thursday's big push from the Fed to open the floodgates to QE3.
And what's really dangerous is there's no end in sight for all the money printing,  Fed Chairman Ben Bernanke is hell bent on pumping as much cash as he can into this economy,   With the FOMC announcement and Bernanke speaking to confirm the news  the Dollar fell below 79, down from 84-  That's a 6% loss in the purchasing power of our dollar.   It would be similar to taking everything you've ever worked for in your life, all your savings and retirement and after one announcement devaluing them by 6%!   Yes it is crazy, and If we are going to survive as a country this has to be stopped folks!

Moving on,  the EUR continued upward with a strong push close to 150 pips from its opening on the day. As our next strongest mover was our inverse correlated pair USD/CHF that fell 110 pips for the day, making it a nicely traded currency after breaking the 0.9333 major support level and making its way down.   I hope you took that trade as it was a great trade to finish the week out strong.

Have a great weekend everyone!

-david

QE3- Let the Manipulation Begin

Fed Chairman Ben Bernanke announced today that the Fed will launch QE3 (Quantitative Easing 3)
or "money printing" with open-ended (meaning there's no end in sight or cap to how much money the Fed may spend) security purchases-  mainly buying mortgage backed securities at a rate of $40 billion, and yes that's a B for billion PER MONTH.   This is all in a joint effort supposedly to stabilize the housing market and try to prop the economy back up.

And because of this the market took off today, Dow closed over 200 points, S & P 500 gained 1.63% up 1.53% for the week, and we saw the EUR head up about 127 pips on the day.  The real mover was the AUD/USD to the upside at 149 pips, while the inverse correlated USD/CAD fell pretty hard at around 107 pips.

While going into the Fall Gold is usually up and the markets start moving well with more volatility, but what we are seeing today is pure market manipulation.   This is something I've already talked about before but to say it again it would not surprise me to see markets continue to rally in favor of Obama's re-election.
Ben Bernanke knows this, and definitely remembers who reinstated his position as Federal Chairman of the Federal Reserve.  I will say that if Mitt Romney is elected to be the next president of the United States he has already made comments to get rid of Bernanke  and get someone else in there more competent and less inflationary driven, and stimulus happy.  Which if you can't tell already, I'm in favor of getting rid of "The Bernank" ASAP before he destroys this country and flushes the value of our dollar down the toilet.

Anyway,   be-aware of what's really going on.   The manipulation has begun!


bye for now,

-david

Where to buy Gold and Silver?

There's allot of buzz in the market place these days with cash for gold, or sell your gold for cash on the spot etc etc.   And yes I understand these are hard times and we all need cash to survive and buy even the basic requirements to live.   But there is a day coming when people realize that our fiat currency we've bought into for so long just won't cut it, and the all mighty dollar has lost most of its buying power and we see inflation take a serious toll on our country.  It's already beginning to happen too, look  at the price of bread, coffee, milk, eggs, and my gosh I bought hamburger meat at Kroger the other day ON SALE @ $4.99/lb and its still going up!

And believe me this isn't here-say folks,  you'll find through history in different country's, different cultures,  one major commonality that every major fiat currency has eventually collapsed and that economy had to start from the ground floor again and rebuild all the mess.

This leads me to say if you aren't investing in something with intrinsic value than really how are you protecting yourself in these difficult times?  My belief is you absolutely have to start buying Gold and Silver and start accumulating this commodity that has real value regardless if our economy collaspes,  the dollar crumbles, and we head into another depression.  And listen I'm saying this as someone who trades forex, options, stocks, and teaches on this stuff.  Really at the end of the day Gold and Silver are a really good place to land in protecting your wealth and even setting up an inheritance for your kids, grandchildren or just to protect your own family right now.

I highly recommend you start shopping for Gold and Silver at:  GoldSilver.com
and see what they have to offer with buying Gold and Silver Bullion Coins you can hide around the house or keep in your treasure chest.  You'll also find GS offering some solid investment advice when buying gold and what to look for, and some basics to get your feet wet.

I'm not the only one saying this, you'll find many testimonials on their website including from the author - Robert Kiyosaki – Founder of Rich Dad-  who highly recommends this company and its continued great service through the years.

So before you buy Gold and Silver online stop by GoldSilver.com 
and see what they have to offer.  You'll be glad you did :)

Talk to you soon,

-David

8.1% unemployment rate--- Weekly Forex Update

Now that we are finally into September (If you can't tell I love the fall and are craving the cooler temperatures) this week turned out to be a overall good trading week.  We saw some very nice gains for our NFP Friday,  with the EUR/USD moving about 170 pips to the upside.  A very nice trade if you took it.  I was trading options today, with 2 strong wins that I can't complain about.

Now that we are in September and headed into the fall typically Gold starts to make a move and we are seeing it already with Gold closing today at $1735.8 making a solid 2.03% in gains.
Even with a disappointing jobs number at only 96,000 job created with projecting 123,000 NF jobs created the market still took off today in equities and currencies, and bringing a nice close to end the week in US and Asian Markets.

I'm excited about this next week as we should start seeing greater volumes of cash in the markets with traders off holiday and some volatile news coming out this next week with the German Constitutional Court Ruling,  FOMC, Core Retail Sales, 10yr bond auctions and more.

Have a relaxing weekend,

-david




  

No QE3, and Markets are waiting to see the cash- much to be seen

Well this last week was disappointing as traders and speculators were eagerly waiting to hear some hope that the Fed would be stepping in with another round of quantitative easing.  That did not happen at all, but rather was a quiet Friday in Jackson Hole, WY with everyone grabbing their fly rods and heading to the river as soon as possible after the meeting to catch some trout.

This week looks interesting in terms of news on the table with bond auctions and Friday with Non Farm Payroll here in the USA.   September tends to be a volatile month as traders are coming off holiday and the USA is returning from Labor Day and hopefully we start seeing the big money moving markets and we get away from all this congestion/ ranging crap that we've seen for most of August.

I'm looking for Gold to continue to head higher as we've broken a 5 year trendline and if the dollar continues to look bleak we could see some monies move into this safe haven commodity as the Euro zone continues to unravel.  I'm very excited to see Stocks become stronger as these types of investments start to look better to the long term investors wanting to hedge risk in the open markets and still yield a higher return. But it wouldn't surprise if we see more manipulation from the Fed to rally the markets in favor of Obama's re-election and try to bring some stability to investors.  Even with unemployment at record levels, a economic recession, and  inflation on the rise.  There is allot on the table with this election,  I really hope you get out there and vote for a better America.

Have a great trading week!    Keep u posted soon

-david