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Forex refers to an open market in which currencies are traded, and represents one of the largest market in the world. The FX is open to all traders of the world and includes almost all the currencies worldwide. Forex market options offers trading opportunities in currencies, where a trader is allowed to Bid and Ask currencies and this can be done through market makers.
Trading in Forex is not done on ‘one-stop-shop’ kind of platform, as many individual market makers play an important role. By so doing, Bid and Ask in currencies is facilitated. AlphaBinary offers FX/CFD options to all traders in binary options. The platform is user-friendly and the uniquely new feature is in line with the emerging technologies and dealing in currencies is now available.
Usually, currency trading was reserved only for governments or super rich business tycoons. With the advent of technology, given the widespread access to the internet, Forex is now accessible. Following such options, traders now have the ability to open accounts and trade currencies no matter where they belong to.
The forex market is deemed to be one of the largest financial market in the world. Traders are able to BID and ASK on this market, as they have always been doing on forex markets. Traders can now simply make speculations whether the rate of a currency pair will rise or fall against the set strike rate. AlphaBinary on the other hand offers the system of CALL or PUT on FX/CFD, which is a relatively new concept in binary options.
Foreign exchange markets are extremely large and requires more efficiency. Traders need to grasp the concept of forex before venturing on this market if they are beginners. Forex trading does not comprise of a single exchange but consist of a global internet network that connects traders to brokers around the world. Market makers become the medium between forex and traders.
Market Maker maintains liquidity and a fair market overall which help traders to find trades which match their criteria. Market makers receive orders for trades and compete for customer order, while at the same time display Buy and Sell quotations pertaining to a number of shares made available.
The market maker can sell from his own lot of shares once he receives an order. Market makers are important in the proper functioning of the FX/CFD market, since they contribute to bring a balance by reducing liquidity and ease the pace at which traders enter or exit the market. They usually set the price of the shares available on the market.
Market makers normally reap profits out of the spread action which takes place on the market while trading forex options.
The spread is normally the difference between the Buy and Sell. Say for example, the EURUSD current BID rate is 1.3025 and the ASK rate is 1.0328, therefore the difference of 0.3 represents the spread.
The role of market makers is also to maintain the spread and by buying low and selling high, they manage to obtain profit through these spreads. If ever the share is sold below the targeted price, the market maker gets compensated for taking risk like this, by charging commissions and fees. On usual forex platforms, paying spread while entering a forex market is compulsory.
Normally Market makers make use of two important tools in forex options, which are:
The electronic communications network helps to define price quotations of other markets available. Financial experts use this kind of network so as to build a bridge between traders and currency markets. The ECN matches the criteria traders are looking for with the exact currency market they need. The ECN has the ability to provide a stronger BID and ASK which can generate higher spreads than other markets.
Many online forex brokers offer free download of a commonly used software in the field of forex trading. MT4 is the most popular online trading platform which generate a load of online tools and resources which help traders to analyze price and place trades. MetaTrader 4 can be downloaded freely from most online forex brokers, and its features comprise of automated trading techniques offering charts and technical analysis.
Forex options trading has been made possible in binary options as AlphaBinary has brought a much more easier way to trade forex. The concept of Forex which is much more intricate as it has been explained above, has been reduced in terms of complexity. In binary options only speculations are made whether the price of a currency pair will go up or down. But, trading forex is even easier, as there is no sell and buy, or bid and ask, but only speculations of price. Traders are allowed to use the STOP LOSS or TAKE PROFIT system while trading on this tool.
A trader can choose when he wants to stop a loss, if ever he feels that he will definitely lose on the trade, or currently running into a loss. On the other hand, a trader can choose to take profit at any time, before the expiry time of the trade. Note that, expiry times are available for all trades that are undertaken. Forex options, are beneficial on long term trades as well, since the stop loss and take profit system is available on AlphaBinary.
AlphaBinary offers a great opportunity in forex options,and brings a new concept for forex lovers. Forex is a unique method of trading and with new features offered with AlphaBinary, it becomes even more interesting. Daily market analysis and technical analysis will help traders find a niche in binary options trading.