Monday, September 09, 2013

TraderXP review

Reports suggest that the number of traders participating in binary options has risen considerably in recent years. Analysts suggest that this has been driven by a lowering of barriers to entry, the proliferation of online binary trading platforms, and an increasing awareness of binary options among investors.

Historically, investors would aim to predict not just the direction of the market, but also the size of the peaks and troughs. If you believed that Microsoft were poised to see an increase in its share price in the weeks following Steve Ballmer's retirement, you might take a long position and wait to see the direction the stock would take. But it is unlikely that the price is going to move radically, especially for such a mature business. At the same time, even though you think the price will rise, you actually see more downside risk. While you believe the price should rise, if it falls, it could fall by three or four times as much, effectively wiping out your gains on a risk-adjusted basis.

While many investors feel confident about their ability to predict the overall direction of the market over a given time period, few feel confident about predicting the degree to which prices will swing. For investors, this introduces a dilemma. You could correctly predict the market 75% of the time, but the losses could be much bigger than the gains, effectively meaning that you lose overall.

Binary trading allows you to simply place a "call or "put" on the direction of the market. The payout is fixed, and so the sizes of the swings are irrelevant. All that matters is whether or not you're in the money. According to TraderXP review information, you can see that it's easy to place binary trades on forex, stocks, commodities and even indices.

When you trade binary options, you are trading a derivative. This means that you do not own the underlying asset, but rather a financial instrument that takes its value from the underlying asset. This method has several advantages. One advantage is that you can expect to earn payments of around 70% just from one trade - an amount that could easily take seven to fifteen years through traditional trading strategies. Of course, at the same time, you can lose money much more quickly as well, so it's wise to think about the type of strategy you wish to pursue.