Currencies are traded in pairs, yet they are never completely balanced. Both currencies in a pair are involved in a non-stop battle to surpass the other. The balance is constantly changing, generating price variations, price trends, retracements, and trend reversals. All of these types of price action can be profitable for the binary options trader.
There are plenty of currencies that can be traded within the binary options platform. Most brokers provide some, if not all of the major pairs. These typically involve the USD, but there are non-USD pairs to trade with as well. The Forex market allows trading 5-days each week, 24-hours each day. Binary option brokers typically do not adhere to this schedule, instead offering day trading with currency pairs. Your platform provider can tell you the exact platform hours.
What drives currency prices? This is something you’ll need to know if you’re going to profit from them. Currency values are strongly influenced by the general condition of the economy, significant governmental and financial reports, central bank rates, reports provided by bank chiefs, natural disasters, and more. These factors can cause a currency to grow stronger or weaker against its counterpart. It is also important to closely examine any influencing variables related to the second currency in the pair.
Technical analysis should be paired with fundamental analysis when trading currency pairs. This form of analysis is used to identify price trends, locate support and resistance levels, and spot prime entry and exit points. A trend is essentially extended price movement in either direction. Substantial profits can be generated by trading along with the direction of a trend. Support and resistance levels show you possible turning points. These levels, along with trends are at the heart of technical analysis.
News reports can easily point you in the direction of potentially profitable currency pair trades, but once you know the pair you’d like to trade with, do consider elements from the technical side of things. A well-defined price trend is the ultimate profit generator, so if you’re frightened by excessive volatility, wait around for these trends to set up and then trade with them. With experience, you should be able to identify and profit from shorter-term price movements as well.