Currency pairs are one of the four main assets classes found within binary options platforms. Although there are plenty to choose from, most traders focus primarily on the majors. These are the pairs that contain the USD as one of the two currencies. The three pairs referenced here are majors, with each experiencing a large trade volume within the Forex market each day.
Before getting started, take a bit of time to familiarize yourself with the hours that these pairs will be available for trading. The Forex market is open five days a week, 24-hours per day. Even so, not all digital option platforms allow trades to be executed around the clock. While you may be provided with extended trading hours for currencies, in all likelihood you’ll have an 8-12 hour window for active investing.
This pair can be quite volatile, especially when traders are reacting to recently released economic data. False signals are quite common in technical analysis when trading to trade just prior to or after any major data is released. For this reason, the best strategy for trading this pair is to not trade until investors have processed the latest information and the price direction becomes clearer. Should a price trend have begun by that time, jump into your platform and trade along with it.
There is a strong connection between these two countries due to the fact that Canada supplies a substantial amount of oil to the United States. Because of this, these two currencies often have values that are quite similar. There are two fundamental strategies that can be used here. One would be to monitor all reports related to oil coming from Canada to the U.S. and trade accordingly when supply numbers change. The other would be to use Boundary or Range trades to cash in on the fact that these two trade in a tight range.
Many binary options traders assume that this pair is always volatile, but this isn’t the case. When neither economy is feeling much pressure, this pair can remain rather balanced. The Bank of Japan will often step in and take action to keep the exchange rate as stable as possible. When this happens, a spike in price can occur. The strategy here would therefore be to know when the Bank of Japan is making a move and then enter into trades when their actions do send the value of the yen higher.
There are plenty of ways to trade with the major currency pairs and plenty of strategies to choose from. Since each pair exhibits its own distinct style of price movement, be sure to combine pairs with the appropriate type of trade. Put/Call trades are ideal for times when a price is trending, but these are not always the best option when prices are stable. Currencies deliver a steady stream of profit opportunities to those who trade binary options and for this reason they should never be overlooked.