24Option is a well-known, award-winning online broker based in Limassol, Cyprus. More precisely, you can find the company’s headquarters at 39 Kolonakiou Street, Ayios Athanasios. It was founded in 2009 by Rodeler Ltd, a company that operates under Cyprus Securities Exchange Commission (CySEC) license number 207/13. This means that the company is not a scam and that it takes measures to safeguard clients’ funds by depositing them in segregated bank accounts. Besides 24Option, Rodeler also owns a few other advanced trading platforms such as the QuickOption, GrandOption, and 24FX.
24Option is a full-service Forex broker that also offers trading in CFDs, commodities, indexes, and stocks. It provides services on a cross-border basis to EU member states. Outside the European Economic Area, the services of this online broker are offered by Richfield Capital Limited, a company that belongs to the same group as Rodeler Ltd. Richfield Capital is regulated by The International Financial Services Commission of Belize. One thing to keep in mind is that 24Option is not active in the United States currently.
Just like the majority of other online brokers, 24option provides its customers with the option to open a free demo account and get $100,000 on the account. However, the understanding of the term “free” is a bit ambiguous. In order to obtain access to a demo account, the trader first needs to register to 24Option. There are different account types the user can upgrade to, but the default one is the Basic account. Then, in order to get the demo account, the user needs to make a minimum deposit of $250. After this is completed, the user should contact an account manager who helps new clients with everything they need, including opening a demo account.
So, yes, you can get a free demo account in terms that you don’t have to pay any additional fees for that account. However, prior to getting the access to this account, every user has to register and make a minimum deposit.
One of the features that all traders appreciate is the ability to contact customer service in times of need. 24Option is known for its superior customer service. One of the things that makes 24Option customer service stand out from its competitors is the significant number of available languages. Customers can use English, German, French, Arabic, Italian, Portuguese, Russian, Spanish, Dutch, Swedish, Norwegian, Polish to contact the customer service.
24Option provided over eleven dedicated International support lines that serve to connect the users through to their appropriate regional account manager. Traders can use live chat, email, or phone to ask for help. A 24Option representative can be reached by phone during business hours. On the other hand, email and direct chat service can be used at almost any time of the day, but it may take some time to receive a response.
24Option uses Meta Trader 4 (MT4) trading platform which has become standard among sophisticated online brokers. This platform comes with many bells and whistles including the access to a great number of tools for charting and analyzing trading levels.
When it comes to the platform, it is not only useful but also visually appealing. It uses a black background and a green and red color scheme. Every trader can use the platform to adjust the quantities on trades and it is also possible to choose the time when the trade will be executed. This feature is quite useful for beginners who can get overwhelmed easily by trying to keep track of the price action on multiple instruments. Another great feature of the 24Option platform is that the trader can set stop/loss and/or take profit levels for trades. This is very useful since it can prevent a trade from having unintended results and consequences.
In addition, 24Option users can see stop/loss levels, profits, and times trades were entered and executed. Other options allow the traders to set alerts and follow key market events by using the economic calendar tab. Overall, the trading platform offered by 24Option is a decent and visually appealing system for all different types of traders.
Thanks to the 24Option mobile app, traders can easily access their investments and trades anytime, anywhere. That is, as long as they have a connection to the Internet. 24Option app is one of the most advanced mobile trading apps available. The app makes it incredibly easy to open new trades and make changes to the user’s account. In addition, the traders can easily keep track of their trades and get the latest information on trade tips, investments, trade options and more.
24Option mobile app offers the traders the same options the browser-based platform does. Clients can use it to trade stocks, commodities, indices, Forex, and cryptocurrencies. They can also manage their personal information, make withdrawals and deposits, and even trade CFDs with leverage.
24Option provides market and educational resources that can help traders improve their skills. For example, the users have access to Financial News Headlines that show the latest financial stories from different economic regions in the world. The Daily Market Analysis provides users with charts that include analysis and comments regarding directional biases for different securities. The Trading Central is an investment research provider to financial market professionals. This service covers market, trends, and pricing and helps users find trading opportunities. Every user has access to the Economic Calendar which displays a list of upcoming announcements from different countries around the world. In addition, the users can also check out the Video on Demand section that contains short but informational videos regarding Forex and CFDs. In addition, 24Option sometimes holds free webinars.
Sometimes, opening an online trading account can be a real hassle. Luckily, 24Option has made the registration very simple. Since 24Option serves clients from around the globe, the trader first has to choose his country of origin and enter basic information such as name, email, and phone number. Then, the system will guide the user through a series of multiple-choice questions regarding the user’s trading and educational background. After this, the user has to pass the 24Option verification process.
In order to pass the identity verification process, the trader will have to upload an ID and proof of identity document. The traders can upload the following documents: a valid passport, driver’s license, ID card, proof of residence, credit card, and even bills (electricity, gas, water, phone, Internet). In addition, making a deposit is also necessary. Since it may take some time for the verification process to be completed, the traders should not expect to trade immediately. However, they can still make deposits which will be held by 24Option.
According to the Rodeler Limited – Client Agreement, all CFDs and Forex trades have spreads that appear on the platform. In addition, every type of trading account may affect the spreads offered for a particular financial instrument. Every trader is encouraged to contact Customer Support to find out the details about the features of every account.
When it comes to the fees, the company does not charge commission fees since it receives compensation through the spread on each financial instrument. In addition, no financing, deposit fees or withdrawal fees are charged, except for wire transfers (€25, £20 or ¥3,000). All users are subject to dormancy fees. This means if an account is inactive for more than three months; the broker has the right to charge the user a maintenance fee. The exact fee depends on the currency of the account and amounts 85 EUR/85 USD/85 GBP/10,400 JPY/250 TRY/90 CHF/550 CNY/5,750 RUB.
Every trader who registers on 24Option can upgrade from the Basic account to Silver, Gold, Platinum, Diamond, or even an Islamic account. Every account type comes with certain benefits and services such as an introduction to the platform and financial markets or even a possibility to contact a dedicated account manager. The holders of the Basic account get access to the broker’s web client platform that allows one-click trading, a mobile app, and customer service. The Silver account includes all the features of the Basic account as well as the Trading Alerts and a Personal Trading Coach. The holders of the Gold account can receive SMS and email alerts and they get a 2% return on every trade. The Platinum account gives the trader access to a research website and Live Training Session. In addition, traders holding this account get a 4% return on every trade. The most advanced account type is the Diamond account. It includes all the previously mentioned features plus complimentary tickets to Juventus FC soccer matches in Europe and a customizable trading platform.
24Option is a legal online broker regulated by Cyprus Securities Exchange Commission. In addition, the company is also approved by the British FCA and German BaFin. Their website gets approximately 1 million visits every month and it enjoys quite a good reputation.
However, 24Option has received a fair share of negative user reviews. Some of the complaints come from the lack of understanding on binary options trading. In addition, the users tend to complain about the 24Option bonus offer. According to this offer, every user who deposits $2500 gets a 50% bonus match. However, what many people don’t read is the terms and conditions which explain the strings attached to the bonus.
There have been some negative reviews & complaints made about 24Options, but they tend to come from people frustrated or confused by binary options. Many uninformed traders had positive things to say about 24Options but had a negative experience trading options. For example:
24Option is one of the most popular online brokers with an extensive array of tradable assets. It is easy to use and also regulated by Cyprus Securities Exchange Commission. Since this broker is licensed in an EU state, it has the right to operate in all EU countries. However, 24Option does not extend its services to traders located in the United States.
The company uses the industry-standard MT4 trading platform which is user-friendly, making it very easy for traders to interact with the broker. Since this broker has a goal to make trading accessible to everybody, the company made sure to provide adequate support for traders of all skill levels need so they could maximize the trading opportunities available to them. Besides offering incentives and benefits to traders, 24Option boasts a very professional and courteous customer service.
Nadex, short for North American Derivatives Exchange, is an exchange house based in the US. More precisely, the company’s head office is located at Suite 2675, 311 South Wacker Drive, Chicago, Illinois. Formerly known as “HedgeStreet,” Nadex was bought and rebranded by IG Group Holdings, a London-based financial services firm.
Even though Nadex is located in the US, the company also accepts traders from most of the countries around the world. The company operates as an exchange house and not as a brokerage. This means that all the contracts are transmitted between buyers and sellers according to a predetermined price. What makes Nadex stand out, as you’ll get to see in this Nadex binary options review, is that the company doesn’t act as a counterparty to the trader’s position and there is no conflict of interest. All orders are transmitted through the exchange platform and Nadex doesn’t play any role in fixing the odds of the trade.
To ensure safety and high-quality services, the company is regulated by the Commodities and Futures Trading Commission (CFTC) of the US. In addition, Nadex has received numerous awards and recognition from some of the best companies in the industry for its dedication to the welfare of their investors, as well as for the extraordinary quality of their products and services.
One of the things many traders want to find out from a Nadex review is whether the company offers a demo account. It is quite useful to be able to use such an account prior to making a real investment. Luckily, Nadex provides its registered (and non-registered) traders with a free demo account. One great thing about this account is that the users get the full access to the Nadex platform once they open it. In addition, it is permanent and always available.
Opening a demo account is very easy. The users don’t have to make any deposits, provide a valid credit card or contact support. All they have to do is visit the Nadex official site and choose the option to open a free demo account. In order to complete this action, it is necessary to provide some basic information, including an email address. Then, the users will receive an activation email that includes basic info about the demo as well as certain tips for getting started. The demo account comes with $25,000 virtual funds which can be refilled any time and Nadex provides a virtual refill for an unlimited amount of times.
Nadex was made to be a platform that can be used by different types of traders ranging from amateurs to various businesses. That is why the company decided to set the minimum initial deposit at $250. What some traders might find surprising to read in this Nadex review is that this amount is actually half the industry average. In addition, Nadex has also made it possible for its users to start trading immediately after funding their account.
This low initial deposit is particularly useful for beginners who don’t want to risk too much capital at the very beginning. In addition, to make the platform even more user-friendly, Nadex provides substantial risk protection. The most a trader can lose in a binary options trade is the amount they paid to enter the trade since the value of a binary cannot go below zero. And, since the users cannot risk more money than they have in their account, the losses cannot exceed the deposits.
Those who are interested in trading cryptocurrencies will be delighted to learn that Nadex offers its users to trade Bitcoin with limited downside risk. This rare and exciting opportunity is possible as a result of a contract called Bitcoin Spreads. The spreads are a bit different from the standard binary option but are very easy to trade. However, the traders should keep in mind that the only expiry available is “end of the week,” meaning that the duration of the contract is one week only.
The name Bitcoin Spread comes from the fact that the contract allows the users to trade the price of Bitcoin within a defined range, between a floor and ceiling price. As the Bitcoin price varies, so does the Bitcoin Spread value change but with certain limits. If the basic price of Bitcoin moves up above the ceiling or below the floor, the value of the spread will stop moving and remain at its upper or lower limit. Many traders are afraid of trading cryptocurrencies since an extreme slippage can cause catastrophic losses. Bitcoin Spread, on the other hand, ensures that the risk is always limited within a range defined by the user. One limit is the profit target and the other is a guaranteed protection against an immense loss.
One important feature that should be mentioned in every Nadex binary options review is the option to do all the trading on your smartphone. Nadex has provided its clients with the desktop Nadex Trader as well as the Nadex Mobile Trader. The mobile app is fully optimized for all mobile devices, including tablets, and it is available at Google Play Store and Apple’s App Store. In addition, the application is available for Windows phones as well.
Nadex traders can use the mobile app to track real-time developments in the financial markets, create watch lists, check their trading account balance, and, of course, execute trades. The application operates smoothly and includes every feature that is available on the desktop version. Despite the size of your screen, the layout will remain clear and show all the information you might need, ranging from account maintenance to charting.
Nadex is one of the few binary options brokers that supplies its traders with proper trading education. Nadex provides a wide range of educational resources such as handbooks, videos, and webinars. Majority of these instructional tools can be accessed by anyone. However, Nadex has also reserved some resources only for its registered users.
Handbooks that are provided are supposed to teach Nadex users the fundamentals of binary options, bull spreads, trading strategies, and more. Videos are animated, easy to understand, and made to provide even more information every trader should know. Webinars are free for registered account holders and they cover a wide range of important topics such as strategies for beginners and advanced users, trading mentalities, and more. Every user can also consult an FAQ section which is spread out across several different pages and explains specific concepts and procedures. Other informational resources include a detailed glossary, trade examples, and news and market commentary.
Nadex business model is based on fair exchange trading. However, the platform uses a different business model than the majority of other binary options brokers and it is quite difficult to compare them directly. For example, if a trader who uses Nadex purchases an option contract that costs $40 with the strike price at $100, his payout will be 120%. However, if the trader purchases an option with a price of $70 with the strike price at $100, then his payout will be about 43%. Truly, the risks the traders face are slightly more dynamic than European binaries. However, with the trading cost that is fixed at $0.09 per lot and capped at a maximum of $9.00, the returns offer better trade value and are definitely more lucrative than European binaries.
Every user will need to fund their account once they sign up. Nadex enabled its users to make a deposit in a number of ways. All users can use their debit card or wire transfer to make a deposit. US residents can also use ACH transfer and paper check. Traders should keep in mind that note bank verification might be required for some transactions. In addition, Nadex doesn’t accept credit cards.
When it comes to withdrawing funds, U.S. residents can use ACH funds withdrawal which is free but might take between three to five days to be processed. Wire transfer, on the other hand, costs $25 but it is usually processed the same business day. Unfortunately, money can’t be withdrawn to a debit card. When withdrawing funds, the traders don’t have to withdraw all their money; they can always choose a specific amount.
Since Nadex specializes in binary options and spreads trading, it is important for this Nadex review to point out that all fees are calculated on a per-contract basis. The fee a trader has to pay per contract is $1. However, there is a $50 maximum cap, meaning that a trade of more than 50 contracts will still cost $50.
Clients are allowed to exit a trade any time in one of two following ways – either by placing an opposite trade or by letting the contract expire. If the clients exit the position before contract expiration, they will be charged a $1 fee per contract. Just like with the entry fee, the exit fee has a $50 maximum cap, meaning that the user can be charged only up to $50.
If a user holds a binary option position until expiration and it is profitable ($100 per contract) then he’ll be charged a settlement fee of $1 per contract to close. However, this fee doesn’t have a maximum cap of $50. In addition, if a user holds the position until expiration and it closes out of the money (for zero), they will not be charged a settlement fee.
Besides offering the demo account, Nadex has also provided its users with a choice of three main types of trading accounts: individual account for U.S. residents, U.S. business account, and an individual account for international traders.
In order to open an individual account as a U.S. resident, a user will have to provide their permanent home address in the U.S., date of birth, social security number, and copies of documents that can confirm all the listed information.
International traders who want to use Nadex will have to provide their permanent home address, date of birth, ID number, and a document that can confirm their name, date of birth, and address.
Trusts, companies, and partnerships that would like to open a Nadex U.S. business account will have to provide an authorization to act on behalf of the corporate entity, documents that prove the status and ownership of the corporate entity, ID of each signatory on the membership form, Nadex Entity Membership Agreement, Unanimous Consent Resolution, and a W-9 form.
This Nadex review would not be complete without user testimonials. Nadex is not a scam since it is 100% regulated by CTFC. The platform does get its fair share of complaints. However, most of the complaints come from traders who are not allowed to join Nadex, those who fail to understand the system, as well as those who would like to see even more services. But, most importantly, there are absolutely no complaints related to scams, fraud, or shady withdrawals.
Even though Nadex has received many positive reviews, there aren’t many success stories when it comes to this platform. Trading on Nadex (as well as everywhere else) can become quite difficult, risky, and time-consuming. So far, only financial experts have managed to make a living at it. Unfortunately, many Americans are disappointed in Nadex due to their lack of understanding of the platform since there are no signal programs that can lead the way.
Even though there are advantages as well as disadvantages to using Nadex, it is still one of the best choices for those who want to trade binary options in the U.S.. Nadex is suitable especially for beginners and short-term traders who are interested in day trading and placing bets across a wide array of products. The company offers binaries and spreads on contracts that cover commodities, stock indices, forex pairs, cryptocurrency, and macroeconomic events. In addition, all those who are new to binary options will find the extensive educational resources very useful.
What makes Nadex unique is that it is not a typical broker that traders get to see on the internet every day. Nadex is an exchange that allows traders to meet together and conduct their trading activities without participating in the trading activities. Most importantly, all activities on the platform are in compliance with the SEC and CFTC regulations.
Nadex or North American Derivative Exchange is an online binary options exchange that belongs to the IG Group. It offers binary options trading and spreads on some (not all) Forex, commodities, and stock indices markets. In this article, we’re going to open a Nadex demo account and give you a tour of the trading platform.
The bulk of its operations relate to binary trading, so understanding the concept is mandatory for anyone interested in opening a Nadex account. Like in many other financial markets, traders must pick the direction of a security: up or down.
In Forex trading, for instance, if traders expect for the price of a currency pair to rise, they’ll buy or go long. But the same trade and on the same currency pair will have a different terminology in binary trading: traders buy a call option.
However, what they really want to see is the price rising. Hence, the market analysis is the same, but the products differ.
The outcome of a trade depends massively on being right in the general direction. But, in binary options trading, you need more than that. Both price and time play an equally important role, and this is seen in Nadex trading too.
More precisely, time and timing are critical. Timing refers to the moment to take a trade. Also called the striking price, it plays an essential role in the outcome of a binary option.
Time refers to the expiration date. Every binary option has an expiration, and all that matters is for the price to be higher (for a call option) or lower (for a put option) than the striking price. If that happens, the option is said to expire in the money, and traders book the profit. Or, it expires out of the money, so the trading account takes a hit.
Because traders must decide on both the time (expiration date) and the timing (striking price) of an option, binary options trading is tricky, to say the least. Brokers know a few tricks here and there to make it even more difficult.
Nadex trading is web-based. Effectively, it means that traders don’t need to download a trading platform on their PC. All they need is a stable Internet connection and a trading account with Nadex.
The beauty of Nadex is that it offers the ability to trade with demo accounts. This way, traders get used with the broker’s offering, general market conditions, and get familiar with the particularities of the binary options industry.
As you’ll find out, a Nadex demo vs. live accounts comparison shows little or no differences between the two. Therefore, traders use a Nadex demo account to learn trading as the platform is not that user-friendly as many think.In fact, this is one of the most significant drawbacks of Nadex trading – it’s a challenging platform to understand at first.
Thankfully, a Nadex demo account free to open, does not require a deposit, and is just a few clicks away. It’s a great opportunity to learn the platform without risking real money. Just visit the company’s website, choose “Open an Account” and you’re almost there.
Naturally, the broker tries to push for the opening of a live account, as that is the primary highlighted option. For a live account, traders need to submit some documents part of a five-step opening account procedure. However, it is fast, intuitive, and reliable.
Comparing Nadex demo vs. live opening account procedures favors the Nadex demo. When comparing opening of the two account types, you can see they are very similar, and neither are very difficult. With some basic info, one gets access to a demo account with $25k in virtual funds to use. What better way to understand binary trading?
Nadex advertises as a broker that offers a different kind of trading, as well as a new kind of opportunity.
Well, let’s say that the product offering isn’t that different than in other binary options brokers’ case. However, it has some features that deserve particular attention.
It all starts with the product offering. Nadex trading gives access to various markets like:
We won’t cover all of them here, but the most relevant ones and popular among traders. Namely indices, Forex and short-term expiration date binaries.
Most categories come with both binaries and spread trading. Basically, the products in each category are similar, but Nadex trading differs. Nadex spreads offer a price range on the same products offered in Nadex binaries. They work as a great money management tool to hedge against specific market conditions, mostly “buying time” to be right and building protection against being wrong.
Nadex trading offers the two possibilities, binaries and spreads, for the main categories (indices, Forex, commodities). However, not all indices are offered, nor all the currency pairs that usually form the Forex dashboard.
We’ll use the Forex pairs to illustrate how to trade on a Nadex demo account, but keep in mind that the principle remains similar for the other markets too.
One particular product is worth mentioning here. The events binaries give traders the possibility to bet on the outcome of economic news. Careful here, as it is not about the market’s reaction to a particular news. Instead, it is about the actual outcome of the news. For instance, will the release be higher or lower than the forecast? The broker will give you two choices and a reward for being right.
Nadex offers access to ten different currency pairs: six majors and four crosses. A major pair is one that has the world’s reserve currency in its componence, the U.S. Dollar.
Because of that, we can say that the USD is a major driver for the overall Nadex trading profitability when using Forex pairs. Because it appears in so many pairs, the future trades have a high-correlation degree. In other words, it makes it difficult to find new or better trading opportunities as the underlying markets are similar (USD based).
Correlated markets are one of the biggest challenges when trading all markets, not only binary options. However, the danger multiplies due to the inability to use decent risk-reward ratios in binary trading.
Nadex trading uses a $100/contract value. That’s the risk, but also the reward if the option reaches maturity or the expiration date. When buying or selling an option, if you are right, you’ll make $100/contract. If not, you’ll lose the hundred. It’s not possible to make $300 but risking only $100. When trading other markets, the potential reward always exceeds the risk at least by a factor of 1:2.
Nadex trading is straightforward. From the left side of the Nadex demo account platform, just pick the product to trade. Next, double-click on it and a pop-up window like the one above appears. Finally, set the parameters and Place Order.
As mentioned earlier, time and timing is everything in the binary market. For this reason, the Nadex trading platform lets you choose the expiration date, while always showing the indicative current market price.
Nadex offers both short-term and medium-term expiration dates. However, on the long-term ones, there’s not much of an offering. In fact, it lacks entirely.
The image to the right shows a binary option trading setup on the EURUSD on July 27, with the expiration date at 3 PM and with almost eight hours ahead of it. The underlying current market price is 1.16272.
If you think the EURUSD price will be lower eight hours from now, you should sell the option. The Nadex trading platform will reward you with $88.25 for every contract traded.
However, the option also has a lower edge, as Nadex sets an “interval” even for binary trading. This particular option won’t bring any profit if the price of the EURUSD falls to any level. Instead, it must be higher than 1.1560 on the expiration date.
Hence, there is an upper and lower edge for the binary trade, and only if the price ends up in between at the expiration date, the option will be a winner.
Trading can take place at the market or placing a GTC (Good Till Cancel) order. The GTC order is a pending order that will remain active until the market reaches the striking price or the option expires.
After opening the trade, it’ll appear on the watchlist until the expiration comes or the trader closes the trade earlier to book profits or cut losses. Moreover, the Nadex trading platform cumulates the contracts on the same product so that the trader can manage the position easier.
Trading with a Nadex demo account gives traders the possibilities to see all the pros and cons of the broker and the trading platform.
This walkthrough article is too short to cover all the aspects of Nadex trading. For this reason, the video tutorial comes to explain how trading on Nadex goes, how to complete a trade and also covers some tips and tricks when using the Nadex trading platform.
A Nadex demo vs. live accounts comparison will reveal little differences between the two accounts. We suggest opening a demo account and learning how to use the platform before making a deposit. If you find a profitable trading strategy in your demo account, opening a live account only takes a few clicks and you’ll have a lot more confidence using the platform when it’s time to make real money!
If only all binary brokers offered a demo account!
One-touch binary options – options that pay a predetermined amount if the strike price is reached before expiry – are a financial innovation useful for various situations. They’re named one-touch because they only have to touch the strike price once to pay out, and the trader doesn’t have to worry about the market price remaining above the strike price until expiry.
They contrast with high-low binary options in that a strike price is specified for one-touch, but only a direction is required for high-low options. Reaching this strike price within the allotted timeframe is much less probable, leading to greater risk (and therefore greater payoff) for the trader.
Since the spot price must move towards and touch the strike price for the payoff condition to be triggered, traditional momentum trading strategies are useful for one-touch binary options trading.
The buy/sell indicators for momentum trading lend insight into whether any particular contract would become a profitable one-touch trade. The foundational condition is having the underlying asset’s price move in the correct direction. Here we discuss three of the most common, but plenty of others ones are available (and if you’re a math person, you can create your own).
The most common and easiest to use are moving average (MA) indicators. The main idea is that as “faster” moving averages cross “slower” averages, the price trend will continue in that direction. Faster averages are more sensitive to recent prices because they take fewer timepoints into consideration: a 20-period MA looks at the last twenty price points, and each period contributes 5% to the final average. A 50-period MA looks at the last fifty price points, and each period contributes 2%. So every price in a shorter MA affects the MA’s price more (5% vs 2% in our example).
When a faster average crosses above a slower average, we have a buy signal: the recent price activity indicates an upward trend, as recent prices are higher than the longer-term average. As an example, if gold’s 20-period MA crosses above its 50-period MA, a long one-touch binary option is a trade to consider.
The MACD indicator is actually comprised of three moving averages and their differences: a slower MA is subtracted from a faster one, and this difference is compared against an even faster MA. Usually exponential MAs are used, and the most frequent setup is the 12-period minus 26-period EMA graphed against the 9-period EMA. The latter is called the signal line. When the difference line crosses above the signal line, we get a buy signal. We can also determine if a particular asset is overbought or oversold (i.e. time to sell or buy, respectively), by how far away the difference line is from the zero line (when the 12-period MA equals the 26-period MA and their difference is zero). The farther away from the line, the more extreme the trend and the higher the probability of reversal.
A good indicator to use in conjunction with MACD is the RSI, which normalizes recent price activity to a 0-100 scale. Strong recent performance generates a high RSI. This indicator is less precise, as it relies on three categories: 0-30 is underbought (recent poor performance and likely to increase), 30-70 is normal, and 70-100 is overbought (recent price action is excellent and likely to lose momentum). It is wise to avoid long positions in one-touch trades if the RSI is high, because it is unlikely the momentum can continue.
One charting technique that is essential for one-touch binary option trading is looking at resistance and support levels. If a long one-touch carries a strike price just above a resistance point, it will probably pay better than one with a strike just below the resistance point. Why? Because the brokers offering the option know the market will probably hit the resistance point then fall, never reaching the higher level. That means they never pay out – and you lost.
When trading one-touch binary options, it’s essential to consider momentum and how long the momentum can continue.
A lot of traders ignore fundamentals and focus solely on price action, but some of the best opportunities are value investments. By simply charting, one risks overlooking long-term prospects. And if fundamental analysis indicates a contrarian investment is in order, the one-touch options might be extremely cheap: the market does not expect the outcome, so it places a high payout on the option.
This means it is necessary for traders to also pay attention to earnings announcements, products in the pipeline, marketing strategies, global events, and overall financial health. A strong performer may have poor scaffolding underneath. And even the strongest company can fall victim to economic policy, catastrophes, and regional unrest.