IMF Upgrades Global Growth
What does a couple of days and some improving economic data give? Answer: It gives an IMF global economic growth upgrade from 3.3% to 3.5%. In what some may think is rather surprising move the IMF has upgraded global growth but has also said most major economies “still face major brakes on growth”.
The IMF has cited that the risks to global growth still remain with the debt crisis and rising oil prices the biggest threat. The IMF baseline case is for low growth in advanced economies where they see US growing by 2.1% and Europe in “contraction” of -0.3% and most importantly they see China growing above 8%.
Let’s try to reconcile this one: China has stated long term GDP growth of now 7.5% from previously stated long term goal of 8%, Europe in mild recession and US improving marginally. IMF has upgraded Australian growth to be in line with the Australian government forecast of 3.5% versus IMF previous of 3%. Canadian growth forecasts have also been upgraded from 1.7% to 2.1%
IMF upgrades world growth forecasts
Markets have taken this positive for now and it is near term bullish for commodity based currencies like AUD and CAD. Don’t forget China though!
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A Dummies Guide To Trading Binary Options
dummies guide to binary optionsThe boom in popularity in trading binary options is mainly due to the fact that it has established itself as the quickest and easiest way to profit from the financial markets. Unlike traditional forex, there is no risk of losing more than you invested for there is no leverage involved in binary options. Returns of up to 60 – 360% can be made within minutes of confirming a trade making just simple yes or no decisions on the direction an underlying assets price will move in. Here’s a dummies guide to trade binary options and join one of the fastest growing industries online:
The advance of technology has provided more trading opportunities both easier and faster. Usually platforms will offer three instruments in which to trade binary options. These are:
For the High/Low instrument:
Choose ‘High’ if you think that the price of an asset at the time of expiry will be higher than the target price.
Choose ‘High’ if you think that the price of an asset at the time of expiry will be lower than the target price.
For the Touch/No Touch instrument:
Choose ‘Touch’ if you think the price of an asset will touch a target price at any time before the option expires.
Choose ‘No Touch’ if you think the price of an asset will not touch a target price before the option expires.
Boundary or Range (In/Out)
For the boundary or Range instrument:
Choose ‘In’ if you think the price of an asset will close inside of the range formed by the upper and lower target prices at the time the option expires
Choose ‘Out’ if you think the price of an asset will close outside of the range formed by the upper and lower target prices at the time the option expires.
Trade in Three Easy Steps
Generally a trade can be achieved in just three easy steps once a deposit has been made.
First, you choose an underlying asset to trade from a wide range of Currencies, Stocks, Indices and Commodities.
Next, you decide the direction the price of the asset will move in
And finally you decide the amount to invest and click buy.
The length of the contract before the expiry time varies from asset to asset and can be anything from a few minutes to a week. The pay outs are always predetermined and you can never lose more than you invested which limits your risk. Many binary options trading platforms even offer a refund of up to 15% on an investment finishing ‘out-of-the-money’.
dummies guide to binary options trading
There are many strategies of differing difficulty that can be applied to binary options trading. However, a novice trader can give themselves a better chance of success by following a few basic tips.
Firstly, its good practice to get to know a particular asset or a few assets. Different assets have different traits and it’s important to familiarize yourself with them. An example is the US Dollar; when it strengthens and rises in price, commodities like Gold and Silver which are traded in the USD, become cheaper and decline in price. Also, certain currencies are sensitive to the price of Oil – Canada an exporter of oil benefits from high crude oil prices and the Canadian Dollar rises on increases in the price of Crude Oil. Japan, a large importer of Oil sees the value of the Japanese Yen decrease at times of high oil prices as the cost to import rises. The more you get to know an asset, the more you will be able to predict its movements.
Secondly, it is very wise for a trader to start using and learning to read a good economic calendar. Market volatility increases on the release of economic data and from events happening in the world’s economies. Speeches by heads of institutions and finance ministers should always be looked out for in a daily diary as they often spark major market moves.
Thirdly, don’t be afraid to try some of the many trading strategies that can be applied to binary options. Popular strategies include Hedging, Call and Put, Reversal and the Straddle and each can be used to build a successful trading strategy. Remember, attempting to beat the market does not normally work. Traders should monitor trends and look towards following them by generally buying Call options in a bull-ish market and Put options in a bear-ish market.
Finally, a last but important tip for new investors is to remain unemotional when making a trade. Make trades based on research, not sentiment or on just a hunch, other wise you may find you end up losing more times than you bargained for. Remain alert and commit to the time needed to be able to react to events in the market as they happen, ensuring you take advantage of when possible profit opportunities arise.
So that’s binary options – trading the financial markets has never been so easy or as profitable.
Using technical analysis to trade binary options
Trading Binary Options involves making just simple Yes/No investment decisions. However, a truly successful binary option trader will use a variety of analysis tools at their disposal, both technical and fundamental, to help predict the way the markets will move. Whilst fundamental analysis focuses on how macro and microeconomic forces can influence prices, technical analysis is the method of analyzing statistics and data of specific options to assist in ascertaining the future price direction.
There are a number of different methods used in technical analysis, but they can all be categorized into two studies – objective and subjective. The objective studies comprise trend following methods, momentum methods, and means reversion methods. Subjective studies comprise support and resistance and pattern recognition.
Objective Technical Analysis
One of the most commonly used strategies in technical analysis is studying past prices to ascertain if a trend has formed in the price of an asset. This can be achieved by looking at the past moving averages of an asset. A moving average (sometimes called a rolling average) is an average in which the most recent days are removed from the calculated average. In a 10 day moving average, on the 11th day, the 1st day is removed from the calculated average.
The 2nd most commonly used tool in following trends is the MACD – moving average convergence divergence. This ascertains market momentum and indicates if the momentum is rising or dropping. It measures the daily movements in the moving average by comparing a shorter moving average change with a longer moving average change. Should the changes of the shorter moving average be larger than the longer moving average change; the MACD will go up signifying increased momentum. When the reverse happens the MACD is dropping.
Mean reversion is a theory that the price of an asset will eventually revert back to its average price (the mean) after moving away from it over an unspecified time period. A commonly used technical indicator used to determine mean reversion is Bollinger Bands which makes use of a mathematical formula to calculate a certain standard deviation centered on a particular average.
Bollinger bands can be used for almost any financial asset
This is where the trader looks to identify a pattern which can be used to predict a future price movement. A good example is called the head and shoulders pattern; where 2 shoulders and a head are formed in the charts and typically the market will drop after the second shoulder has formed.
Head and Shoulder pattern in a bullish market, can also work in a bearish market where the graph will be upside down
Support and Resistance
This is a popular tool in technical analysis and is used to determine at which level a price is likely to rise and at what level the price is likely to fall.
A support level is the level where the price is going down and finds support (investors buying). The price then rises from the ‘bounce’ upwards from this level. However, if the price ‘breaks’ this level, the price is likely to continue falling until another support level is found.
A resistance level is the other end of the scale. This is where the price goes up until it finds a resistance level (investors selling) and the price starts rising. However, if the price has ‘breaks’ this level, the price is likely to continue rising until another resistance level is found.
For the Binary Options trader, technical analysis should form an integral part of any trading strategy. Learning the techniques involved in technical analysis can prove essential to a Binary Options trader when they enter and exit positions as well as keeping track of a positions’ risk. Combined with a sound understanding of the fundamentals, technical analysis can be invaluable tool to assist in trading success.
How to Choose the Best Binary Options Trading System
One of the best techniques for trading in the currency market on a binary options trading system without the complexity of normal trading is through binary options. In binary options you get additional benefits as you do not have to spend a large sum of money for getting yourself started. You also have the added benefit of being able to achieve returns on your investments that can be as high as 60% to 500%.
Most of the online brokers offer fixed payout binary options along with best payouts. With binary options you can trade stocks, commodities and indices on account of the complimentary charting packages and tools that are used for methodological study by the traders who trade in currency.
Binary Options Trading Platforms For a normal unchanging binary options trade payout, a lucrative deal pays out 60% to 70%, even as a loss results in a 15% come back on the investment, which means a total loss of 85% of the invested amount. However, the likelihood of getting a profit of 60% to 70% in opposition to a loss of 85% is something that everybody gives a second thought. But, you can start trading by means of a potent binary options trading system.
These systems or platforms give you an approach through which you can create a zone of profit with a large amount of the best possible positive prospects.
It has been seen that about 80% of the options expire valueless. This can be simplified by the online trading system. This system enables you to create a winning trading system on the basis of analysis of the historical data after getting the information of market trends. You can fully automate each Binary options trading system. You should, therefore, choose a system through which you can trade automatically.
Binary options platforms You can find a lot of different types of binary options trading platforms which will help you in online trading. These platforms are simple to use and you get a chance to know about your loss or gain in binary options trading. Binary options trading platforms have many benefits in terms of their features. You should be conscious about the benefits and drawbacks of the binary options trading system and then weigh the one that suits you the most.
Binary Options Platforms Review A simple review of some of the binary options platforms are as follows:
The standalone or web-based trading platforms
These platforms help you to have better control over your trading; however there are many hidden costs in such systems. Before you choose any definite standalone platform, you should find out about its maintenance, storage facilities and user-friendliness.
Multiple Currencies trading platform
In binary options trading, you can trade on commodities, currencies, US market, EU market, Indices and many more. So, if you regularly trade with currencies, then you should choose a binary options trading platform that supports many currency pairs.
High Security Trading Platform
At the time of selecting a binary options trading platform you should enquire about its security level from the broker. You can look at its encryption level, and be able to interpret, which platform is best for you. Typically, a binary options trading platform having at least 128 bit SSL encryption is a good platform.
Pay Back for ‘Out Of The Money’ platform
Even a cent makes an enormous difference in binary options trading. Therefore, trading platforms, that would give you, at least some pay back for ‘out of the money’ should be chosen.
Minimum deposit platform
In most binary options trading systems or platforms there is a minimum deposit of 100 dollars. However, there are a few where the deposit can be as low as 50 dollars.
Intervention talk dominates global markets
There was mixed trading in Asia overnight as the markets await the release of the Federal Reserve minutes tomorrow and as investors mulled over the comments made by the European Central Bank indicating that the media talk suggesting that the ECB was to going to purchase government debts to help lower the cost of borrowing, were in fact, misleading.
At the time of writing the Nikkei 225 was up 0.23%, South Korea’s Kospi Index rose 0.5% Australia’s S&P/ASX200 was up 0.58% but Hong Kong’s Hang Seng index was down 0.13% as the regional benchmark index headed towards a three month high. Driving the markets in Asia was the world’s second largest economy – China – moving to alleviate a cash crunch. China’s nation’s central bank increased its reverse-repurchase operations overnight to alleviate a cash crunch, injecting 150 billion yuan using one week contracts and a further 70 billion yuan via 2 week agreements, making this the biggest cash injection since the 3rd of July.
Investor focus is once again on troubled Greece as Greek Prime Minister Antonis Samaras is set to get together with his German and French counterparts this week with the main point of discussion being whether or not Greece has done enough to receive the next tranche of funds – 31.5bn euros. Inspectors from the EU, IMF and the ECB will make public their report in September on the spending cuts and the efforts by Greece to raise revenues by reducing tax evasion and selling off state assets.
It is expected that Greece will ask for more time to implement the terms of the bail out which has caused some discord amongst key Euro decision makers, particularly in the powerhouse of the Eurozone – Germany, with German foreign minister Guido Westerwelle stating that a “softening” of the reforms was not permitted.
Much of the investor focus is still on the minutes being released by the Fed reserve on Wednesday which will hopefully confirm that the world’s largest economy – the US – is on the road to economic recovery. With yet another quiet day on the economic calendar – oil and gas stock figures in the US may install some movement into the commodity markets
I've seen a lot of people compare Binary Option trading to gambling in general. I haven't made my mind up yet, but I think there are a lot of articles/videos that are suggestive of this. I think this video describes such an article from Forbes -
Index products have made headlines in recent years because they are easy to trade and they are electronically available virtually from anywhere, and can be traded anytime. Aside from these, profits gained from index binary options trading are taxed lower compared to stocks, making it a profitable venture. The best part about trading indices is that there are several strategies available for both bearish and bullish markets. But before we talk about Index trading strategy, let us first define what index products are.
An index is simply a portfolio of stocks (sometimes commodities) grouped in a particular way. For example, the Standard and Poor (S&P) 500 is made up of stocks from the top 500 largest corporations in the world while the Dow Jones Industrial Average (DIJA) covers the top 30 most traded stocks. Each index tracks the market using several methods and components.
By trading index options, traders can participate in broad market movements with one trading decision, instead of having to select individual stocks to buy or sell. Through index trading, investors can gain exposure of the stock or commodity market, and take advantage of their movements efficiently and cheaply.
One way you can trade indices is during the pre-market hours. Most traders think that markets are available only between 08:30 to 15:15 CT but the fact is, the trading continues around the world even if the US sleeps. For example, the S&P 500 futures are open between 15:30 CT to 15:15 CT. Hence, for someone who wants to gain an insight about how the US market will go, or to earn big dividends, the best way is to be an early bird and to trade in the pre-market hours. Of course, one of the disadvantages of this method is that there are very few indicators you can use to base your trading decisions on. The key to understanding the night market is by knowing who is controlling it. In this case, it is important for you to determine which index markets are currently open.
The first market to open is the Nikkei in Japan followed by the Hang Seng in Hongkong. By understanding how these two Asian markets will trade, you will get an idea on how the S&P 500 will move. Typically, the S&P 500 will follow the Asian trend when these markets are open.
Another index you can trade is the Globex. Unlike the S&P 500, the Globex market moves very slowly (about 10 points in a 17-hour night time period), but it still follows the Asian trend. In this case, it is important for you to maintain patience. The best trading strategy during this period is to get in the market, place a protective stop and to wait for the trend to show before closing positions. As Europe opens by 01:00 CT, the market will show changes and the S&P will follow the trend of the DAX futures. During this time, it is best to give the S&P 500 around 30 minutes to adjust from the Asian to the European trend.
Cyprus Bailout Deal Opinion: The Two Banking Commandments Have Been Broken
Ever since the global collapse of the financial structure in 2007 two fundamental principles have been respected.
1. The money of the citizens of a country should be in no way affected up to a certain amount. In UK it was 50,000GBP and in the EU 100,000EURs for example.
2.When financial institutions lend money to banks they themselves should be the ones to incur the losses in such a situation as in Cyprus at the money.
It’s clear that financial institutions should be clued in enough to evaluate the risks they are taking when lending money to a bank by buying their bonds. So if the outcome goes against their expectations of getting their money back then it’s simply their responsibility in the same way it’s my responsibility if i buy shares in a company and they come crashing down.
EUR/USD Strategy for Binary Options
As a binary options trader, it is likely that you will routinely trade with the underlying assets which you are familiar with in the financial markets. As one of the “majors”, the EUR/USD is probably one such asset. One of the reasons why this currency pair is one of the most frequently traded currency pairs is because of its liquidity. Every day, every hour, someone is either buying or selling the EUR/USD. And because of the high trading volume of the EUR/USD currency pair, the opportunity to profit from any price movements is always there. Hence, it makes sense to have a binary options strategy for trading the EUR/USD currency pair.
The good news for a binary options trader is the fact that the EUR/USD currency pair is always available as ...
Read full binary options strategy for trading EUR/USD
Cyprus Banks Reopen after 2 Weeks, Strict Withdrawal Policies
Cyprus banks finally reopened today after almost two weeks of being closed. A combination of that, negative retail data coming out of Japan and an unhealthy economic growth outlook for South Korean all affected investor confidence which in turn lowered Asian stocks.
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Apple Apologizes To China
AppleTim Cook the CEO of Apple inc (AAPL) had to apologize to Chinese customers after 2 weeks of heavy criticism and complaints from the country. China is Apple’s fasted growing market and the second largest consumer of their products. The apology letter which was published on Apples Chinese domain earlier this week came after apple returned customers iPhones without replacing the back panel.
The Chinese People’s Daily newspaper was the first to publish an article and claimed that Apple was acting arrogantly. A Chinese investigative TV show went on to say that Apples warranty practices were specifically discriminative towards the Chinese consumers.
Rea full article here