Gold is one of the underlying assets traded in the binary options market. Thats a major advantage, because trading gold in the commodities market is just too risky for most retail traders. The margin requirements are high, it needs a lot of capital (in excess of $10,000) and a heart of steel to bear the drawdowns that could occur. That is not to mention the monumental losses that could occur in a crazy market when slippage could blow out a trader’s account.
Why Trade Gold through Binary Options?
The binary options market provides a way out to trade gold in a controlled environment, with reduced risk of a catastrophic loss, smaller margin requirements and by consequence, lesser trading capital needed. There is no fear of gold rolling back by almost a thousand pips against your position before it decides to do as you wish it to. No fears about over-exposing your account.
In the world of binaries, the trader’s loss is restricted to the cost of the trade. If the trade behaves as the trader wishes, he gets his cost back and some extra. This “extra” could be up to 81%, or if you know how to play this multiple ways, could be as much as 500%.
In trading gold, there are several things to consider before your desire to make money from it transcends from the pedestal of dreams to the reality of tangible dollars in your hands.
Firstly, there is the trade types:
– Touch/No Touch: Here, the trader bets on the price action touching a chosen price level called the strike price, (touch) or not touching that price at all (no touch). There are variations such as double one touch, double touch, etc. The key is that the chosen behaviour of gold has to occur in the trader’s favour before the expiry date.
– In/Out: The price of gold can decide to trade within a price range formed by an upper and lower trend line. Whether this asset decides to stay within the tunnel so created (in), or break out on either side (out), is a matter for the trader to decide. A correct choice is rewarded.
– High/Low: How about trying to decide if gold will end higher than the present price by the time the trade expires, or lower? Another way for the trader to possibly make money.
These are three possible outcomes that can translate into some cash to finance that shopping spree that has occupied your mind lately. Let us now help you along the way.