Trading EUR GBP Forex Binary Options – Strategy and Analysis of a Bearish Market
Trading EUR GBP Forex Binary Options – Strategy and Analysis of a Bearish MarketSeptember 23, 2012
Today I will be analyzing some of my candlestick patterns for Forex Binary Options and attempt to formulate a trading strategy for EUR/GBP exchange rates according to a bearish market sentiment. A bear market is when investors and/or traders are pessimistic about the markets (or in this case about a specific currency), and bet or speculate against it.
In contrast, bullish traders are optimistic about the markets and will most likely invest on the downside because they believe they market trends will change for the better, or alternatively on the upside because they believe the positive trend will continue.
In binary options currency pairs trading, bears find it very easy invest. All they have to do is make an initial deposit, follow the candlestick charts, choose an asset, in this case EUR/GBP, and start trading the news. In this case, you would bet against the EUR due to the Euro Zone Crisis and the adverse effect the lack of decisive policy the ECB has displayed. I would put a steady hold on the GBP against a lackluster EUR now treading water due to the struggling European economy triggered by the sovereign debt crisis of Spain, Greece, and now Italy as well.
As is the case in all situations where trading is involved these are the following criteria you must adhere to when drafting a strategy:
1. Trade the News: Keep your finger on the pulse of the markets and Wall Street! It is the only way to become a savvy trader.
2. Learn About the Trading Platform: If you are trading on Tradologic or Spotoption, you need to have very clear insights on how the technology works and how to use it to your benefit.
3. Choose the Best Broker: If you are not sure simply look at our reviews section where you will find the creme of the crop.
4. Open a Demo Account: The best way to get a feel for the software and the service is to practice trading and start simulating live scenarios without risking any money.
5. Don’t be Afraid to Take Risks: But look for the right entry signals. If you understand swing trading binary options is a great place to start executing these types of trades.
6. Never Risk More than You Can Afford to Lose: The way to do this is to allocate a certain sum of money and never risk more than that. It is a very effective way to manage and mitigate your risks.
7. Have an Exit and Reversal Strategy in Place: Look at the contract expiration times, you can always adjust your trades accordingly, and know when its time to fold and come back another day.
To sum up, if you follow these trading guidelines and formulate an effective binary options strategy, you should start making a lot of money very quickly.
*Most Traded Currencies in Binary Options:
AUD/USD, NZD/USD, GBP/JPY, EUR/JPY