Each binary options platform provides several different commodities for use in trades, with gold being one of the most popular choices. Since there exists the potential to profit from either upward or downward price movement when trading digital options, any asset that is exhibiting predictable price movement can produce profit. Gold is special in that its price is closely linked to a small number of economic factors and it is widely reported on. These facts help make price forecasting easier.
Being one of the more popular assets, gold often experiences a large trade volume. As such, this commodity is known for launching into short-term price trends with little or no advanced notice. Long-term trends are possible as well, with the price moving in conjunction with the current economic conditions. The highest and lowest realized prices can be used as a guide for the average range, but whenever market sentiment is strong, the price can exceed these levels.
The fact that gold has the power to cover a lot of ground in very little time works to the advantage of the binary options trader. There will be days when the price is able to increase or decrease by a thousand or more pips. Days such as this can allow for a large number of profitable trades to be executed, especially when shorter expiry times are selected. Such a large amount of price movement is no necessary in order to trade with this commodity, however. Market data should provide several attractive entry points throughout each session.
Since the price of gold is so active, a higher trade volume can be considered. When using short-term trades such as 60 Seconds, several dozen trades can easily be executed in just a single day of trading. As with any asset, some days are simply better than others when it comes to being able to correctly forecast the upcoming price movement. This makes it important to be able to recognize optimal conditions and increase volume during those periods. It is equally important to be able to recognize conditions that are causing the price of gold to be too erratic and unpredictable.
There are a number of binary options strategies and trade types that can be used to trade gold. Avoid any type of trade that is reliant upon price stability. This would include Range, Boundary, and No Touch trades, each of which demands that the price move very little while the trade remains open. The better options would be trade types such as the basic Put/Call trade, 60 Seconds, One Touch, and Long Term. Each of these require some degree of price movement if they are to yield a profit.
Although very little price movement is required for a trade to finish in the money, larger price movement simply makes price forecasting easier. There is never any shortage of market news related to gold, and this will make for easy fundamental analysis. Technical analysis may be easier as well, especially during times when the price is trending. For any binary options trader seeking an asset that is highly active, look no further than gold.