TRADING BINARY OPTIONS
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The Bloomberg Financial Series provides both core reference knowledge and actionable information for financial professionals. Cbot binary options bookshelf books are written by experts familiar with the work cbot binary options bookshelf, challenges, and demands of investment professionals who trade the markets, manage money, cbot binary options bookshelf analyze investments in their capacity of growing and protecting wealth, hedging risk, and generating revenue.
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No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but cbot binary options bookshelf limited to special, incidental, consequential, or other damages. For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States atoutside the United States ator fax Wiley publishes in a variety of print and electronic formats and by print-on-demand.
Some material included with standard print versions of this book may not be cbot binary options bookshelf in e-books or in print-on-demand.
If this book refers to cbot binary options bookshelf such as a CD or DVD that is not included in the version you purchased, you may download cbot binary options bookshelf material at http: For more information about Wiley products, visit www. Cofnas, Abe, author. A3 C DDC Are you following news events and want to financially benefit from your knowledge? Are you new to trading and want to participate but avoid the long learning curve for mastering trading skills? If these questions are on your mind, this book is for you.
Binary option trading provides excitement and opportunity for achieving unusually large returns in less than a week! While there are many variations to this type of trading, this book cbot binary options bookshelf on the regulatory-approved weekly binary option trades of the North American Derivative Exchange Nadex.
Trades have limited risk to the cost of a position. There is no margin. The trade is a bet on the direction cbot binary options bookshelf a market by the end of the week. This simple structure allows anyone to trade in over 20 different underlying markets, from currencies to indexes to commodities. This book takes the reader through the basic features of the binary option instrument. But it does more. It provides a detailed review of fundamental and technical analysis useful to making cbot binary options bookshelf decisions.
Beginners, as well as more experienced traders, will be able to build upon their core trading knowledge. More importantly, new online tools and techniques for detecting market sentiment are presented, because trading can no longer cbot binary options bookshelf separated from the Internet and the social media cbot binary options bookshelf has generated. The web itself is a force on trading decisions and outcomes, as emotions are propagated through the web.
This phenomenon has made sentiment analysis a major challenge for traders. For the binary option trader who is shaping a decision for a weekly outcome, or even an intraday outcome, the critical factor will be the actionable knowledge that is applied.
This book provides real-world examples of how to scan the political and economic news and formulate appropriate binary option trading strategies. Key trading strategies are reviewed with examples. Also reviewed are case studies of binary option trading in relationship to key news events that we have lived through.
The reader will see exactly how these events shaped trading strategies that worked. This book is also designed to provide a self-directed performance audit capability to the trader. Specific training challenges are provided, including a test of your knowledge see Appendix A.
No other book provides a comprehensive get-started approach to trading binary options. It is my hope that Trading Binary Options: Strategies and Tactics makes a difference and improves your ability to get started in binary option trading, but most importantly, to do it the right way! This book would not have been possible without the support of many people.
First, I want to thank Agora Financial Inc. The experience of a weekly provision of real-time alerts and analysis of binary options has provided an cbot binary options bookshelf base of knowledge that made this book possible.
Joseph Shriefer and Rick Barnard of the Agora Financial team cbot binary options bookshelf also provided valuable input on my analyses. The North American Derivative Exchange Nadex has been of great assistance in providing access to technical information and data used in this book.
None of the opinions or alerts in this book has been cbot binary options bookshelf to any prior review or approval by Agora Financial Inc. Finally, thanks go to my wife, Paula, who provided the support and goodwill at home that sustained me during the intense writing period.
Cbot binary options bookshelf Cofnas is considered a leader in the field of currency trading, analysis, and training. He has been the Forex trader columnist for Modern Trader magazine sincewriting over columns on Forex events. He has authored three previous books on trading: The Cbot binary options bookshelf Trading Course: He is also the editor of Binary Dimensions newsletter, which specializes in binary option alerts. He brings extensive understanding of trading from all perspectives, including advanced fundamental and political analysis.
What are binary options? Binary options are a type of option instrument that provide a fixed deadline for expiration, with a fixed payout. Basically, it is a yes or no bet. Specifically, the bet is on whether a settled price of an underlying market will be at, above, or below a target strike barrier, by a defined future time.
For example, on a Monday morning, the trader is trying to answer the question: If the trader is correct, the return can approach extraordinary levels of percent and more for only five days of play. This book will show you how it is possible for the average person to achieve extraordinary profits with binary option trading. The binary option is called binary because it fits the condition of being either right or wrong—all or nothing.
Binary option trading fits right into the digital era, which is based on binary logic. In fact, the binary options offered by Nadex can be considered to be part of a type of option classified as European Digital Options.
But the cbot binary options bookshelf arises: Why are binary options important? There are many reasons that come to mind. Binary options are important, but not simply because they are a relatively new trading instrument.
In fact, they are not really new. They have been used for decades at institutional levels as an over-the-counter instrument but, most significantly, traders in the United States have used them since when they became approved by the Commodity Futures Trading Commission CFTC and regulated through the Nadex. They are often called rebate options because of their use to generate a payment as a cbot binary options bookshelf of insurance when damage occurs.
Binary options are important because they offer to the trader, in one instrument, the ability to succeed at many levels that go beyond simply obtaining a winning trade. Binary options are an ideal trading instrument for new traders to test their skills because at a core level, binary option trading starts with anticipating direction. Being right on direction is one of the most important skills relevant to trading any market.
In fact, being wrong on direction accounts for a majority of the losses occurred cbot binary options bookshelf any trading. Another key skill important for mastering binary option trading is risk management. A binary option trade is not necessarily a set-and-let decision. This kind of strategy is followed when a position is put on and thereafter the trader watches the screen and sees what happens at the end of the week. Set-and-let trading does not involve managing the trade during its duration.
Sometimes this is an effective strategy. However, trading binary options requires a sharp sense of timing. Honing entry and exit skills in binary option trading can be transferred to other markets. Binary options are also important because they offer a level playing field. Because the time frame is at most one week, binary option trading counters the observed tendency of traders to hold losers too long and sell winners too soon Odean But there are even more reasons that contribute to the value of binary option trading.
Binary options offer beginning traders the ability to explore over 20 different markets. In a sense, binary option trading presents a discount tour of global markets. Perhaps one of the most important reasons of all is that binary options are regulated through the Nadex and offer price transparency.
In this post-Madoff era of scrutiny and skepticism, trading binary options that are regulated becomes more and more salient to traders. That is why this book focuses on the regulated binary options offered at the Nadex exchange.
For those who want to trade the binary option instruments that are over the counter, the skills built in trading the Nadex instruments will apply. Binary options are an exciting product. In fact, traders in the United States have responded by participating at increased volume levels of around 30 to 50 percent per month! I feel quite strongly that for smaller retail traders, the capped-risk nature of binaries is cbot binary options bookshelf important. For this reason, I believe they may become the product of choice for those who are just starting out in trading.
In addition, I think their small size and self-contained nature will mean they will become the default choice for more experienced traders looking for a cheap real-money way to test out new technical analysis-based trading systems, as well as being an additional cbot binary options bookshelf used by conventional futures and FX traders alongside their more conventional trading.
This points to another reason that binary options are exciting: