Forex Trading Strategies With Binary Options

Binary Options can be ideal for Forex strategy trading. The primary advantages, which we will summarize below, are related to leverage, risk/reward and momentum trading.

Expiration is the most obvious difference between conventional Forex trading and Binary Options. Hourly Forex Binary Options expire at the end of the hour, and pay out a fixed return of 85% even if the expiration price is just a fraction of a pip in the direction speculated. Binary Options do not use leverage, so you cannot lose more than you bet. And since no leverage is required then the risk / reward is much greater during momentum trading. For example using a breakout strategy a $100 trade will profit $85 if it is just a fraction of pip “in the right direction” at expiration, which happens at the end of the hour.

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These advantages come together when using a Forex trading strategy such as momentum trading. In the chart above, a breakout from the base formed by the GBP/JPY causes momentum in one direction, but of unknown duration and size. On the other hand, Binary Options offer simple directional trading so they are basically a perfect fit for momentum traders. As long as you accurately predict direction of the breakout, you can make 85% profits by being right even if the pip moves a fraction in the direction speculated. This would have required huge leverages with conventional Forex with incomparable risk / reward.

If you’re interested in binary options brokers, you’re welcome to go to StartOptions. They’re a leading binary options provider with top binary options reviews. Check out the link below allows you to see how binary trading on the platform really works.

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