Few markets are as popular and as lucrative as the one for currency trading. This is one of the biggest reasons why so many people are interested in trading currency pairs.
The process involves trading two different currency pairs. This means you’re basically buying one currency using another currency.
If you’re already trading on Binomo, then you’d be happy to know that Binomo also offers 10 different currency pairs on the platform. All of these are major currency pairs from different markets, which means you’ll be able to trade 24 hours, 5 days a week.
In this currency derivatives trading guide, I’ll tell you everything you need to know about the currency trading market and how you can start trading currency derivatives on Binomo.
Contents
A brief overview of the currency derivatives market
The currencies traded in the currency derivatives market are called currency pairs because these currencies are always traded in pairs. For example, the USD/JPY currency pair means that you’re trading USD against the price of JPY.
Here’s a real-world example. Let’s say that you’re currently traveling in Singapore. You want to buy some nice souvenirs, but you only have USD in your wallet. So you go to a currency conversion center to convert your USD to SGD based on the current exchange rate. This is essentially how currency trading works.
The market for currency derivatives is one of the largest markets out there. On average, over $5.1 trillion worth of currency pairs is traded each day all over the world. Currently, there are many different financial centers around the world that handle currency derivatives trading. The major currency derivatives markets include London, Tokyo, New York, Hong Kong, Paris, Sydney, Zurich, Frankfurt, and Singapore. These are all located in various time zones, which is why trading currency derivatives can technically be done 24 hours a day.
Why are currency markets so volatile?
Currency markets tend to be volatile because currency prices change constantly as well.
There are many reasons for this, of course, but the main culprit is demand and supply. In other words, the price of a certain currency can increase or decrease based on changes in global demand and supply.
Remember the real-world example I gave above? It’s exactly what happens here, except on a much larger scale. So instead of a traveler, now you’ve got a Japanese importer who wants to purchase some products from Australia. He has plenty of JPY available, but unfortunately for him, the Australian exporter only accepts AUD. The Japanese importer needs to convert his JPY to AUD first before he could begin the purchase process.
Since more Japanese importers are buying using AUD than Australian buyers are using JPY, this means that the demand for AUD will be higher than the demand for JPY. Thus, due to the law of supply and demand, the AUD will rise in value compared to the JPY.
How can I increaase my account balance by trading currency derivatives?
Since the prices of various currencies change all the time, it’s your job as a currency derivatives trader to make smart speculations regarding these price fluctuations. You increase your balance every time you make a correct prediction.
For instance, if the current AUD/JPY currency pair is 78.52, meaning you can purchase 1 AUD for 78.52 JPY, then all you have to do is to speculate whether or not this value will increase (or decrease) within a specific timeframe.
You should enter a buy position on Binomo if you think the value will increase. On the other hand, if you think it will decrease, you should enter a sell position. This is how you make money by trading currency derivatives.
One thing you have to note is that trading currency derivatives on Binomo is quite different than trading other kinds of financial derivatives. When trading currency pairs, your trades will remain active until you reach a certain strike price, or until you exit the trade on purpose. I’ll be talking about it in more detail later so just remember this piece of information for now.
Is trading currency derivatives a good way to increase your demo balance on Binomo?
The simple answer is yes, you can easily increase your demo account balance by trading these kinds of financial assets on Binomo. But of course, you also have to remember that plenty of small losses can eventually add up to a huge loss. If you want to earn a lot of virtual money on your demo account while trading these assets, you should focus on looking for a stable currency pair and using tried and tested money management techniques to preserve your capital.
Are currency derivatives a good way to earn profit on your Binomo demo account?
One of the biggest advantages of using the Binomo platform to trade these types of assets is the accuracy of prices. This means that you can rely on the prices you see on the chart to make wise speculations. Also, Binomo offers plenty of features like tools and indicators in order to make the entire process much easier for you. If you want to start trading currency derivatives on the platform, you can watch a quick video to help you out.
For more detailed step-by-step instructions, here’s our currency derivatives trading guide for beginner traders on the Binomo platform!
Step-by-step currency derivatives trading guide on Binomo
Open a Binomo trading account
The very first step is to open a trading account on Binomo using this link. When you sign up for the first time, you’ll automatically be asked if you want to start a demo account. This account will have a virtual balance of $1,000 which you can use to practice trading and familiarize yourself with everything that the platform has to offer.
Signing up for a Binomo account is easy. You have three main choices. The first one is Facebook, the second is Google, and the third is via email. If you don’t want to connect your social media accounts to your Binomo account, you can use the third option.
Fill in all the necessary details, select whether you want $ or €, and tick the box for Terms and Conditions. Once you’re done, click ‘Create Account’. Binomo will then send you an email link which you should click in order to verify your new account.
Log into your Binomo account
Once you’re done verifying your account, you can now start by logging in with your email and password. You can see a plus (+) sign beside the logo on the left. Click that and you’ll be shown all the assets that you could trade. Currently, Binomo offers 10 different currency pairs.
Binomo is supported by different desktop browsers such as Google Chrome, Mozilla Firefox, Safari, and Opera. It also has mobile and tablet apps available for both iOS and Android. Using these apps can help make the process much smoother for you.
Explore the Binomo platform
There’s a lot to explore on the Binomo trader interface. Here’s a screenshot of the chart and a numbered guide as to all the buttons mean.
Parts of the Binomo currency derivatives trading interface:
- 1. Currency pair. This dictates what currency pairs you’re currently trading e.g. AUD/JPY, EUR/USD, etc.
2. Left panel. This contains buttons like trading history, strategies, tournaments, calendars, gifts, and chart preferences.
3. Tools and indicators. This area shows all your financial products for tools and indicators. Indicators include things like RSI, MACD, DMA, while tools are mainly drawing and marking tools. - 4. Chart type. There are different chart types on Binomo though the most common one is the candlestick chart.
5. Time interval. There are various time intervals as well, like 1 minute, 15 minutes, 30 minutes, etc. - 6. Amount to invest. You can change this value by clicking the + and – buttons.
- 7. Auto close setting. Whatever you input here, it’s made to stop loss and to trail stop for open positions.
- 8. Higher and lower buttons. You can click these buttons depending on what your speculation is.
Trading currency derivatives on Binomo is as simple as taking a guess if a certain currency pair’s price will rise or fall. If you believe that it will rise, enter a higher position before that happens. If you believe that it will fall, enter a lower position. Of course, it’s much easier said than done, but that’s the basic gist of it.
How to make your first trade on Binomo
Excited to make your first trade on Binomo? Here’s our step-by-step currency derivatives trading guide for beginner Binomo traders.
Step 1: Decide on your currency pair
The very first step to making your first trade is to determine which currency pair you want to trade. If you’re feeling lost, you can check out our article How to Choose The Best Currency Pairs To Trade On Binomo.
Once you’ve made your choice, simply click the + button and select your chosen pair.
Step 2: Set up your preferred chart type and indicators
The next step is to set up your preferred chart type and indicators. Charts include choices like mountain, bar, line, and candle. My recommendation would be to use the candlestick chart since it’s the easiest one for beginners to use. For the time interval, you can select anything higher than 60 seconds.
You can also choose which indicators you want to use, though I personally won’t be using any for my examples in this article.
Try to observe the price movement to give you an idea of how the prices are moving. Volatile pairs may be a bit hard to predict, but less volatile ones may tend to have a pattern over a specific time period. Try to look at each one in decreasing order before coming to a conclusion.
Let’s say you see that your currency pair had an uptrend the past day. Upon checking the 30 minutes time interval, you see that it’s still on an uptrend. This probably means that a strong upward movement is happening, which suggests that it would be safe to enter a higher position.
Step 3: Select the amount and the time setting
Since you’re only a beginner, I recommend that you select only the default amount, which is $1 in this case. Investing more than $1 per trade as a beginner trader is quite risky. Once you already know how to succeed with just $1 per trade, you’ll have an easier time succeeding with much larger amounts.
If you’re going to practice on the demo account, I would suggest investing anywhere from 1%-5% of your account balance per trade. This means that if you have $800, $8-$40 would be the safe amount to invest per trade, at most. This helps you experience the feeling of winning a ‘real’ trade without getting too ahead of yourself.
One of the biggest issues that some beginner traders experience is that they become overconfident when trading on the demo account. Due to this, they end up bringing all their wrong habits, including their overconfidence, into their real trading account. Obviously, this rarely ends well, so try to avoid it as soon as possible.
After selecting the amount, you should now set the time settings. By setting this, you’re allowing the platform to automatically close your trade depending on the time that you set. It’s very helpful for traders who don’t want to keep an eye on the chart literally at all times. Once the time is reached, your position will immediately come to a close.
Step 4: Time to speculate
After you’re done setting up your charts, indicators, and other settings, it’s now time for the action to start! In other words, now’s the time that you should actually start speculating. Will the price go up or down? Will it range first? Is it safe to enter a position now or should I wait a bit more?
Now’s your time to decide which direction the price of your chosen currency pair will go. If you think it will still go up, simply click the higher button. On the other hand, if you think the price will go down, click the lower button.
Whatever your final decision is, always make sure you base your speculation on your chart analysis, not on your emotions or gut feel.
How to trade currency derivatives on your Binomo real account
Once you’ve already made several successful trades on the demo account, it’s time to try your skills on the real account.
Remember, although you can earn real money on the Binomo real account, you can also lose real money. That’s why you should be very careful when trading here. If you don’t think you’re 100% ready yet, it’s always better to practice a bit more on the demo account than jumping ahead to the real account.
Think you’re ready? Here’s how you can deposit real money on the Binomo real account.
First, click the Deposit button at the upper right side of the screen.
This will bring you to the Cashier page. Depending on the country you choose, you’ll have several choices at your disposal. For instance, choosing Vietnam brings up 14 different payment methods, but choosing Indonesia only brings up 9. Simply choose which country you’re trading from and select your preferred payment method.
Making a deposit using Visa/Mastercard
As mentioned above, traders have many different choices for depositing money into their real accounts. The most common way is perhaps via Visa/Mastercard.
Making a deposit using Visa/Mastercard is very easy. Simply pick which one you have, and it will then bring you to another screen showing your amount denominations. You can choose preset amounts or input your own. Take note that it’s better to make a few large deposits than many small deposits because you can get bonuses by making large deposits, starting at $100.
For example, you can see in the screenshot below that depositing $100 gives a 30% bonus while depositing $500 gives a 50% bonus. You can take advantage of these bonuses by planning your deposits ahead of time rather than just depositing whenever you need it.
To start the deposit process, simply enter your name and click ‘deposit. You will be taken to a new screen asking for your Card Number, Card Expiration, CVC, and Cardholder Name. Once you’re done, just hit ‘Confirm and Pay’ and you’re good to go.
Verifying your Binomo account
Before you can use your Binomo account, you first have to verify your account. This is done in order to avoid money-laundering, based on anti-money laundering laws. Verification also benefits traders because it helps protect accounts from unauthorized access by scammers.
To verify your account, you simply have to provide your personal information such as your phone number, a copy of your passport or your national ID, and proof of billing for your address. Once you’ve sent all of these requirements, you will receive a confirmation email from Binomo.
How to withdraw your earnings from Binomo
Withdrawing your earnings from Binomo is very easy, but there are some things to keep in mind first. You have to make sure that your funds are withdrawn to your depositing account, which should be in your name. Also, you need to verify your account before you can make your first withdrawal.
The first step would be to log-in to your Binomo account and click the deposit button. Click the ‘Withdraw funds’ tab beside the ‘Deposit funds’ tab.
Simply set the amount you want to withdraw and click continue. If you have enough funds, your withdrawal will then be processed. You will receive the funds after the processing is complete in about 1-9 business days, depending on your preferred method.
If you want to see your withdrawal status, you can check it in the same tab. It will first be marked as ‘Requested’ when you make the initial request. Once the actual processing is already taking place, the status will change to ‘In Process’. If the money is already in your account, it will then change to the final status, ‘Funds sent’.
Conclusion
Did you enjoy this currency derivatives trading guide for beginners? As you can see, earning money by trading currency derivatives on Binomo can be quite fun and rewarding. Unlike with regular derivatives trading where earnings are fixed, trading currency derivatives can give you big increases depending on the market direction.
How was your experience trading currency derivatives on Binomo? Let us know your experiences in the comments below!
Good luck on your trading journey with Binomo!