CHAPTER 1 OF THE TRADING COURSE OF BINARY OPTIONS, FOREX, STOCKS, COMMODITIES AND INDICES AND CRYPTOCURRENCY (GENERALITIES)

WHAT IS THE TRADING?

It is simple to buy and sell financial products generally in the short term to generate profitability.

WHAT IS THE DIFFERENCE BETWEEN TRADING OF BINARY OPTIONS, FOREX, STOCKS, COMMODITIES AND CRYPTOCURRENCIES?

A) BINARY OPTIONS

It is a mechanism of speculation in which you predict if an asset is going to rise or fall in price in a certain time, being that if you hit with the forecast you will get a percentage of earnings that will depend on the broker in which you are operating, and in case you lose you will do with what you placed in the operation. Next you will find a graph that will help you to visualize how a binary options operation can be easily understood.

A.1) Advantages of binary options trading

• Very easy to do trading
• Earnings can be obtained quickly
• It can be operated with amounts as small as 1 $
• Free platforms provided by the broker
• They have demo accounts to practice

A.2) Disadvantages of trading binary options

• Unregulated market that allows huge losses
• Lots of price manipulation by brokers against their customers.
• Prohibited this trading in some countries like the United States (they handle a type of own binary option)
• Some consider that it is not trading but a bet.

B) FOREX

It is a mechanism of speculation in which you predict if a currency will go up or down price but unlike the binary options is not associated with a certain time.

In forex the currencies are quoted in pairs for example EUR / GBP, being the EUR  which is the base currency and GBP  which is the quoted currency. Then you can see the huge number of pairs that can be traded in forex.

 

B.1) Advantages of forex trading

• Very easy to do trading
• You do not have the time limit as the binary options
• You can operate with such small amounts as there are brokers that offer micro accounts
• Free platforms provided by the broker
• There are demo accounts to practice
• Market open 24 hours, 5 days a week allowing you to operate at any time.
• High volume that generates possibilities of interesting movements when it comes to making a profit.
• Highly leveraged market that allows to operate large amounts of money with little deposit, this will depend on the leverage that each broker of its clients.

B.2) Disadvantages of forex trading

• Market in which there are brokers called market maker that basically go against the interests of their customers.
• Because it is not a centralized market, the prices of the currencies are usually different between brokers.
• There are many forex brokers who do not accept nationals of the United States or other specific countries.

C) STOCKS TRADING

It is trading on the price of shares of companies listed on the world's stock exchanges. Perhaps the most important is the New York Stock Exchange.

 

It is enormous the number of stocks that are traded in the different stock exchanges of the world makes it possible to trade based on sectors, volatility, prices, etc ... There are many parameters for the choice of the stock on which we are trading .

C.1) Advantages of doing stock trading

• Being centralized markets prices can not be manipulated since for all traders it is the same price of the stock.
• A lot of stocks markets and stocks that allow to have a wide range of actions when choosing which to operate.
• Professional platforms that provide important information when doing trading.
• Highly regulated market that allows security for traders and investors.
• Possibility of visualizing in real time the purchases and sales that are made and that is translated in the graphs, that is to say, it has information on how these graphs are formed.

C.2) Disadvantages of doing stock trading

• A significant amount of money  is required
• Platforms have a monthly fee
• Each operation has a fee for the number of shares traded, route or ecn used, etc.
• There are several prohibitions that other forms of trading do not have.

D) COMMODITIES AND INDICES TRADING

Trading on the price of gold, gas, silver, coffee, rice, corn, wheat, etc. is what is called trading on commodities.

On the other hand the trading that you do on the average price of selected stocks representing a market or a sector is what is called trading indices. Some of the best known indices are the Down Jones Industrial Average, the FTSE 100, the S & P 500 or the Nikkei 225. In Spain the Ibex 35. Normally both commodities and indices can be tradable in forex brokers.

D.1) Advantages of trading on commodities and indices

• Very easy to do trading
• You do not have the time limit as the binary options
• You can operate with such small amounts as there are brokers that offer micro accounts
• Free platforms provided by the broker
• There are demo accounts to practice
• High volume that generates possibilities of interesting movements when it comes to making a profit.
• Highly leveraged market that allows to operate large amounts of money with little deposit, this will depend on the leverage that each broker of its clients.
• Possibility of strategies based on the temporalities that affect commodities.

D.2) Disadvantages of trading commodities and indices

• Market in which there are brokers called market maker that basically go against the interests of their customers.
• Because it is not a centralized market, the prices of the currencies are usually different between brokers.
• There are many  brokers who do not accept nationals of the United States or other specific countries.

E) CRYPTOCURRENCY TRADING

The enormous boom of the Cryptocurrencies, not only in the amount that exceeds more than 800, but also because of the possibility of exchange between them, the easy access to exchange platforms that are used to do trading makes this an interesting market that Is being developed for the benefit of many. Cryptocurrencies trading is reflected in pairs such as binary options and the forex.

E.1) Advantages of doing trading of criptomonedas

• Very easy to do trading
• You do not have the time limit as the binary options
• Small quantities can be operated
• Broker intermediation is not required simply requiring an exchanger.
• Market open 24 hours, 7 days a week allowing you to operate at any time.
• High volume that generates possibilities of interesting movements when it comes to making a profit.
• Possibility of strategies based on the particular characteristics of each criptocurrency

E.2) Disadvantages of doing trading of cryptocurrencies

• A relatively new market that does not make technical analysis so simple.
• Because it is not a centralized market, the prices of crypto-currencies tend to be different between exchangers, as well as their volume.
• The fundamental analysis depends on each currency so it is a little complex to do the referred analysis to take a certain trade.

CONCLUSION

As you can see there are many possibilities to develop in this world of trading and I intend to help you whether you choose one or another way to do trading.

REMINDER

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