You will learn about the following concepts
- Advantages of trading gold with binary options
- Best ways to trade gold
- Exchange rate factors
Gold is one of the many commodities that can be traded in the binary options market. It is also one of the most popular assets among binary traders, because of its volatility and the fact that it is not affected by many economic factors. Gold is one of the safest assets and it is often one of the best investments during times of economic instability. Keep in mind that the high value of gold keeps many retail traders away from it – in many cases traders need over $10,000 in order to start trading gold and trading with such amounts of money can lead to enormous losses. This is why trading gold in the binary options market is often preferred by traders.
Advantages of Trading Gold with Binary Options
Gold binary options are the right choice for retail traders, because you have complete control over your losses – traders do not have to worry about margin/leverage and they can trade with a smaller capital. The main advantage of Gold binary options is that you cannot suffer huge losses in case the asset’s value declines suddenly.
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Trades have complete control over the amount of money they can win or lose – usually gold binary options offer a return rate of up to 85%, but this entirely depends on the type of binary options you are trading. Gold is usually traded via touch/no touch options, high/low options and call/put options, but there are probably other offers as well.
There are only two possible scenarios when you trade gold binary options – you either lose all the money you bet or you win an amount of money determined by the return rate offered by your broker.
Best Ways to Trade Gold
Keep in mind that gold is a very volatile asset – its value fluctuates a lot and on a daily basis it can go up or down with between 1,000 and 10,000 pips. It is evident, that such drastic movements can cost you a lot of money, if you do not trade using binary options. On the other hand, gold is the perfect asset for a trader who prefers touch/no touch options. As long as you get the movement’s direction right, your bet will be a winner. Of course, you must combine the accurate prediction with the right strike price and expiry time. Getting all this right will guarantee your success.
One of the almost certain factors that predict an increase in gold’s price is uncertainty. In times of economic crisis, gold is considered to be a safe haven asset, so investors often invest their money in gold. This usually increases the price of gold, so in this scenario traders must place their money on touch options. For example, during the Eurozone crisis in 2011-12, the price of gold skyrocketed, because of the high interest in this asset.
Gold is one of the most volatile commodities too. So, you must think carefully before starting to trade with gold binary options. Don’t forget that the high volatility has its pros, but it has its cons as well. The drastic daily changes in the value of gold often bring a lot of money to investors, but they can also cost you a lot of money if you are not careful with your predictions. Overall, trading gold binary options is recommended only if you are familiar with the latest economic news and if you have already built a tested and reliable trading strategy for gold binaries.