Using Currency Rates to Make Money

The most powerful traders in the world have been using currency rates to make money for decades but average joes can as well with a little bit of understanding. While the deep pockets that play in forex markets can tend to push out smaller traders at will there are other markets where foreign exchange knowledge can come in very handy.

Markets Where Currency Rates Impact Trading

If a retail trader can not reasonably expect to make money trading in forex markets, where else might this knowledge be useful? It turns out in fact that the interconnected-ness of global markets has made it such that changes in currency rates impacts trading results in markets everywhere. It does not really matter if you trade futures in Chicago or stocks in New York or Gold in London. Wherever assets are priced in some form of currency, exchange rates will most certainly play a role.

Global Foreign Exchange Creates Rising Tides in Risky Assets

Money is moved so fast between not only assets, but also countries these days - such that literally a ripple effect is observed when foreign exchange markets cool on one currency or heat up in another. Followers of global markets have observed this phenomena for a number of years now with the result being greater correlation amongst risk-based assets. Basically it almost as though as global sentiment becomes more favorable piles of money appear out of mattresses and swell the market - lifting nearly all asset classes at once. Similarly when confidence tanks money leaves the market as though absorbed by a sponge.

So How Does a Retail Trader Take Advantage?

There are a few ways a retail trader can try to capitalize on forex movements. The most obvious way would be to attempt to fast-follow changes in the currency markets themselves - but as previously mentioned this strategy is fraught with peril. Better ways to capitalize on forex movements with limited capital (in order of declining initial stake) can include leveraged ETFs, index options contracts, and binary options (more info). Each of these investments carries their own specific sets of risks - but because they are insulated somewhat from the crashing waves of the foreign exchange markets (and their dreaded margin calls) the risks can be (to a much greater extent) managed. An investor's ability to make money using currency rates then becomes more a story of how well the trader understands and correctly reacts to changes in global markets and less a story of how big a capital stake they start out with.

For a more in depth discussion of the complexity of currency rates and trading forex, visit http://forex-signals-trading.info.

Other day trading resources / tutorials:
On Options Trading: http://optionstradingtutorial.blogspot.com
On Leveraged ETFs: http://www.squidoo.com/leveraged-etfs

Do Binary Options Trading Sites Give Free Money?

One would think the question, "Do binary options trading sites give away free money" would be an obvious "No!" but there still seem to be people out there that think that is the case. While many (read: most) brokers DO offer some form of trading incentive (usually in the form of trade credit money) - it does not constitute free money given away. Despite the claims and appearances of some sites - those cash incentives have to be earned.

How Are Cash Incentives Earned at Binary Options Brokers?

The right question people should ask when trying to choose between similar cash incentive offers at one of the leading binary options brokers is, "What do I have to do to be able to withdraw the bonus cash?" Therein lies the devil in the details, so to speak. While a new trader might be promised a 50% bonus over and above their initial deposit amount they should be prepared for the fact that the deposited funds and bonus cash will not be free for immediate withdrawal.

This has obviously caused more than a few traders to panic. Fear not however for most brokers make it pretty simple to free up the cash: trading volume. All a new trader has to do is execute enough volume of trades to have full withdrawal rights to the bonus cash. Sometimes the hurdles can be a little on the steep side but by and large the trading volumes are not onerus. A site might expect a trader to generate anywhere from 15-30 times the amount of the bonus reward in contract volume - which for most traders happens within the first couple of weeks of placing trades in their account.

How to Get the Most Free Money from Binary Options Trading Sites

We started the post at the outset with the caveat that cash incentives at binary options trading sites does NOT constitute free money - so we're drilling that point home here. There is NO FREE MONEY at binary brokers OK?

Now having said that, most cash incentive offers are tied to the level of deposits made by the new client. The higher the initial deposit, the higher the cash incentive percentage. A typical offer might involve something like $100 bonus for a $500 deposit with a $300 bonus for $1000 up to something like a $4000 bonus on $10000 deposited. The bigger the trader's initial funding commitment, the bigger the cash incentive. Does that make sense? Other binary bonus schemes exist but this is the most typical setup.

Bonus Cash at Binary Trading Sites Is NOT Free Money!

We have to remind people that, once again, bonus cash given by binary options trading sites is not free money. The bonus amounts above represent cash that new clients can withdraw once they have reached trading volumes in their account above a set threshold as set by the customer terms of service at their broker. A trader who received a $100 bonus can expect to have to generate volume on the order of $1500 in trades (placing essentially 3 trades using their $500 stake) in order to free up the $100 bonus for withdrawal.

Seriously think about it though: If binary options trading sites were giving out free money that could be immediately withdrawn... exactly how many of those sites would still be in business today? The reality is that all cash gifts in the financial world come with strings attached... so set your expectations low and hopefully things will work out for the best OK?