There are many ways to make money online and the popular ways are online trading with stocks, commodities, forex currency pairs and binary options trading. When compared to trading stocks and commodities, Forex trading and binary options have minimum risk and guarantee higher returns.

Forex Trading:

Forex market is the most liquid and biggest financial market for trading currencies with more than $5.3 trillion worth of transactions taking place every day. Forex trading is an easy opportunity for beginners to make profit online as it requires small amount of investment capital. Forex trading involves purchase and sale of currencies belonging to different nations such as US dollar, Euro, Japanese Yen etc. Previously Forex trading was open only for large financial institutions but this got changed after 1998 when forex brokers started allowing individual traders to open accounts and exchange currency pairs.

In order to start with Forex trading, you should first open a trading account with a regulated forex broker. You will require a minimum deposit of $500 to open a forex trading account and once you have opened your account, you should start going through the market fundamentals and important terminologies used in forex trading. In forex market, base currency is the currency which you want to sell and the quote currency is the one you want to purchase. The bid price is selling price for quote currency and ask price is purchase price of base currency mentioned by the broker. Spread refers to the difference between ask price and bid price.
Once you have learned the market fundamentals, you should also understand how to read forex quotes. You should read market news and economic reports regularly based on which you can predict the future trends in currency pairs. For example, If US economy is falling, it will weaken US Dollar in Forex market and you can exchange it for some other currency whose economy is booming. Market will keep fluctuating and you can’t always make the predictions correctly. But with some experience and use of technical analysis tools, you can understand the market better and make huge profits with forex trading. Another important advantage of forex trading is that it allows traders to leverage up to 200:1, which helps them to get higher returns with minimum capital.

Binary options trading:

Another easy way to make quick profits online with very low risk is Binary options. Binary options are relatively new investment techniques which involve speculating the price movement of underlying assets such as stocks, Indices, Forex currency pairs, Commodities like Gold and silver etc. They are also called digital options because there can be only 2 possible outcomes for each trade. If the prediction of the trader is correct and he wins the trade for which he can expect as high as 85% returns on investment. If the prediction goes wrong and he loses the trade, the investor will lose all the money he has invested on that particular trade. Similar to forex trading, binary options also require very low investment capital and the risk is also capped. Binary options are preferred by many beginners since it does not require market expertise like stock trading. If you apply the right strategy for binary options, you can easily gain as much as 85% return on your investment. In order to start with binary options trading, all you need is an account with a licensed binary option broker. Also you should know about the various terms such as The Strike Price, The Expiry Time, In-the-Money, Out-of-the-Money, Put options, Call options etc. You should also understand the trading strategies and learn how to predict market trends effectively in order to remain successful with binary options. Some of the popular trading strategies in binary options include:

Correlation Strategy:

This strategy depends on the relationship between price movements of different underlying assets. For example, when US dollar is weak, prices of commodities like Gold and Silver will go up. Similarly when crude oil price is increasing, there will be a decline in stock market and all the stock Indices will go down. By making use of this correlation between various asset classes, you can speculate their future price movements and make successful trading decisions.

Breakout Trading Strategy:

It makes use of technical analysis to find out the right trading opportunities by reading various charts and graphs. You should find out the positions where you expect a major trend change for particular asset within a short time span. People use technical charts to spot the important areas of support and resistance and purchase put options when prices go below support levels or call options if prices move above resistance levels.

Categories: Stock Market