A good, solid strategy is at the heart of successful trading. But how do you develop a feasible strategy especially is you are just starting out?
What’s The Difference Between Binary and Forex Signals?
Advanced traders have a lot of experience and are capable of developing their own trading strategies. Even then, they still monitor trading signals to be able to make accurate predictions on the movement of the assets they are trading.
So, signals play an important role in helping to formulate winning strategies. Some signals are developed for forex trading while others are specifically developed for trading binary options. Binary options signals offer information on the movement of all types of assets including currencies, indices, commodities and stocks. The availability of different signals for different asset types allows traders to take a put or call option position and to trade any type of asset.
Forex Vs Binary Signals
Some providers of binary options signals derive their signals from forex trading signals. It’s worthwhile noting that binary trading originated from forex trading. As such, some forex signal services are starting to offer signals for binary options as well, even though their focus is currency pairs. If you choose to use signals developed by a forex signals provider, you may not have adequate information to help you formulate a strategy for trading commodities, stocks, and indices.
Bottom line: The main difference between forex and binary signals is that binary signals offer comprehensive signals for all asset types. On the other hand, binary signals developed from forex trading signals are largely focused on currency pairs. Although forex options can be used in binary trading, the data provided is often too limited to develop a good trading strategy.
Common Types of Signals for Advanced Trading
Binary options signals are particularly helpful in identifying factors that trigger asset price movements in a certain direction. You can use numerous signals but the most commonly used are:
Signals on the price or value of an asset
The value or price of most options is hardly linear; the price is usually on a cyclical pattern. When you monitor the value of an asset over a period of time, you will notice trends that affect the value of the asset.
Why is it important to identify the shifts in asset prices within a given period? Identifying these trends and price changes will help you make accurate predictions about the future price movement of the asset.
Timing trading signals
Binary trading is all about executing a call or put position within a given period. At the same time, financial markets all over the world open and close at specific trading hours. You can use timing signals to predict the asset movement within specific periods.
For example, say you are trading the USD/JPY currency pair and for the last one week, the value of the dollar has been raising against the Japanese Yen 1 hour into the start of the trading session. This timing signal can help you identify whether it is better to take a put or call option position.
Market trading Signals
Market signals comprise key events in the economy that impact the price movement of assets. Assets will react differently to market trends, but how an asset behaves presently is how it will likely behave in future.
For example, if the value of the USD falls due to new data on unemployment, this currency will likely behave in the same way if similar or related data was released in future.