Gold is a hot commodity these days. There is a lot of talk about struggling economies, fading currencies, and political turmoil. This has opened the doors for more reliable assets to take the place of stocks, indices, and currencies, and gold is one of the most widely traded commodities out on the market today.
However, gold is quite expensive, and investing in it can prove to be quite difficult. This has opened up an opportunity for alternative trading methods to come to prominence. Gold binary options play an important role here because they are cheap and they are very simple and easy to understand.
One of the good reasons why you should trade binary options rather than futures is the timeframe.
A gold futures purchase might take months or longer before you will see a profit. Your money will be tied up in the trade this whole time, and that is not conducive to using that money to help you make more money.
With binary options, you can execute trades that last as little as 60 seconds. This helps you structure your days more efficiently, and your money will never be in someone else’s hands for very long.
Profits are your number one priority when you are trading. There’s no guarantee that you will be successful in any given market, but with binaries, the potential for money-making is much higher.
A stellar gold future might return you 25 percent of your investment if you’re lucky, but with a single gold option, you can make 75 percent or more, depending upon your selected timeframe. Most traders will not risk as much on a single binary option as they would on a future, but if you can string together ten 75 percent options trades with $100 risked each time, you will gain $750.
A $2,000 future—risking twice the amount—with a 25 percent return will only net you $500.
Also, investing in gold bullion or futures is a long term proposition. If you buy bullion, it can take years before your investment will be worthwhile. Binary options present you with a unique opportunity to profit off of gold’s minute short term fluctuations, and still reap big rewards.
RECOMMENDED FOREX BROKERS
If the price of gold goes up $0.01 per ounce, a bullion investor will likely see no difference in their portfolio. But a $100 option can give you a quick profit of $75 in about five minutes.
The other advantage that stems from the shorter timeframe is that a different skill set can be used to make money. Long term trades rely heavily upon fundamental analysis methods, and this excludes a lot of people that rely upon technical analysis methods.
One of the strong features of technical analysis is that it is transferable.
Click here to learn about the most popular trading platform - Metatrader
Someone that looks at a chart for a stock will see the same thing when they look at a chart for gold. Only minor differences exist, so someone that can analyze the short term changes in a price chart for Apple’s stock will also be skilled at analyzing gold’s price chart.
If you buy bullion, this will not help you at all, but if you are trading 15 minute options, this skill will be of a big benefit to you.
So trading gold binary options can be profitable to you if you are a short term trader. This can be a good way to get more balance out of your trading and diversify. It can be very beneficial to a trader with limited trading capital, too.
Induction Video - ACM Gold South Africa
You don’t need nearly as much money to be an effective gold options trader than you would with a gold future.