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Beginners handbook for bitplutos users

Welcome to bitplutos
Beginner Binary Options E-book
This easy-to-use manual will take the complex topic of Binary
Options and make it simple to understand, so that all traders, at no
matter what level, may benefit.

This manual and the learning resources at bitplutos combine to


become a force for any trader to benefit from and reach their trading goals.
Moving Averages 21
Table of Contents Bollinger Bands 21
Retracements 22

 6 Summary 22
 6 The Fundamentals22
7 Taking Advantage of Global Market Cycles 22
Taking Advantage of News 24
10
Taking Advantage of Volatility, Rumors and Sentiment 24
Make Money in Any Market Condition and Direction 10
Flexibility 10 Technical Analysis 10125
Fast Results 10 3 Technical Principles 25
Variety of Options 10 Support 25
Profitability 10 Resistance 25
Fibonacci Numbers 27
Terminology12
Moving Averages 27
The Platform13
Bollinger Bands 27
The Products15 Retracements 28
How to Take a Position16 Economic Growth28
Trading Psychology16 Introduction 28
Introduction 16 Growth Drivers 28
The Myth of How the Brain Works 16 The Government's Role and Credit 29
Symptoms of an Emotional Trader 16 The 2008 Credit Crisis, Interest and Inflation 29
Trade Rationally 17 Dealing with a Recession 30
The Challenge of Online Trading 17 The European Debt Crisis 31
7 Habits of Successful Traders 17 Safe Investing 33
Important Rules that will Help You Psychologically 17 International Trade 34
Summary 18 Global Market Sessions35
Winning Tactics18 When to Trade 35
The 4 Goals of Trading 18 The Global Economic Circle36
The Trap of Winning 19
Conclusion36
Trust Yourself Over the Experts 19
Summary 19
Resources37

Economic Events19 Risk Disclosure38


Japanese Candlestick Chart 20
Trends 20
Support, Resistance and Fibonacci Numbers 21
up-to-date information about the markets, teach them how to interpret
the information, show them what it all means and ultimately guide them
on how to channel the knowledge into a smart trading strategy.

We know as well as anyone that the world of Binary Options can be scary
and unforgiving, which is why we started this company and wrote this
manual. We realize that while there are many resources with reading
material on the subject of trading Binary Options, there is no one out there
who takes traders by the hand, shows them how to trade with live shows
and real market conditions and helps them to learn to make wise trading
decisions. We hope that we can assist you as much as we have assisted
so many other traders who are on the same trading journey.

The Beginner Binary Options E-Book


Welcome to eXbibno E-book for beginners. This E-book is an
excellent introduction to Binary Options and strategies that will help
you start trading as soon as possible. We hope you enjoy it and we look
forward to hearing your feedback.
Introduction to Binary Options
While the term Binary Options is very well known, the actual meaning
Introduction to bitplutos of it is not well understood. The actual definition of binary options is an
Welcome to bitplutos your Binary Options Trading sidekick. We know that investment that is set to have an all or nothing structure, so that the
while some may believe that our name sounds a bit exaggerated, we investment either ends up correct, and the investor wins, or it ends up
believe that our name is a perfect description of what we do. The name incorrect, and the investor does not win anything.
bitplutos conveys the essence of who we truly are. We believe that our
Lets delve a little bit deeper into what Binary Options truly are: The term
company is a type of superhero in an unjust world. The world which we
is made up of two words; lets start with a translation of the second word,
speak of is a world in which traders, who have little to no basic
option. An Option in trading is similar to an option in everyday life. What
knowledge about the financial markets or Binary Options, continue to
we mean is an option is where you, the trader, buy a choice.
trade and continue to lose their money. The world does not have to
be this way; bitplutos is here to help. Lets begin with an example. Lets say youre married with three beautiful
children. Lifes great. The only problem is that you dont own any property.
If we were to state the purpose of our company in one word it would be You decide its time to buy a property.
knowledge. Our goal is to provide traders with a strong foundation of
You and your spouse go out driving in the neighborhood and you see a
Binary Options knowledge and education. Thats all. Of course, the way
gorgeous property thats for sale. This property seems like the property of
our traders get to the point we want them to ultimately reach takes a lot
your dreams. Everything is perfect. The only problem is that the property
of time, but our focus is simple. Give traders the most fundamental and
is being sold for $30,000 and you only have $3,000 in your bank account.
You devise a plan. You tell the property salesman that you will pay them Lets think about the flip-side, though. Say you win the lottery as planned,
all the money you have in your bank account, the entire $3,000, for the and you decide to buy the property. After doing an inspection, it is found
OPTION to buy the property in 3 months, which is when you expect to win that the property is trash and there are mice living in it. In this situation,
the lottery, for their current asking price of $30,000. You are not saying you even though the property salesman lowers their asking price to $3 for this
definitely will buy the property in 3 months, but that you have the OPTION property, since you bought the option for a value of $30,000, if you decide
to buy the property or whether not to. to go through with the purchase of the property, you would still have to pay
$30,000 for it. Bummer.

Remember though, that buying the option means that you dont have to go
through with the purchase of the property, but even if you dont buy it, you
end up losing the $3,000 that you paid for the option.

This story is a perfect example of what an option truly is. When you buy
an option of an asset (which is just a fancy name that includes stocks,
commodities, currencies and indexes) you are not buying the asset itself
(or the home itself, in our example), but you are locking in a price for the
option of whether or not to buy the asset at a later time.

Now all we have to define is the word Binary. This is the easy part. All
Binary means is two-directional, meaning, you can either win or lose,
theres nothing in between.

Trading binary
options is when one
buys an option and
invests in a prediction
of whether an asset
price will rise or fall
Lets put it all together.
This scenario can work out well or not so well for you. Lets say 3 months
Simply put, trading binary options is when one buys an option and invests
down the road, after winning the lottery of course, you decide that you will
in a prediction of whether an asset price will rise or fall. One does not own
buy the property. After doing an inspection it turns out that the property is
the actual asset, but the option of whether to buy the asset at a specific
filled with diamonds. Where your property was once thought to be worth
price at a later time.
$30,000, it now turns out that it is worth $300,000,000. But guess what?
Since you bought the option for $3,000 to pay $30,000 for that property, The difference between our property example and true Binary Options is
you only have to pay $30,000 for it. that when buying the option for the property, you only want the value of
the property to rise, but when it comes to Trading Binary Options, you can
In this case you are getting a $300,000,000 property for $33,000 ($30,000
buy an option on an asset for a variety of directions and in almost any type
price of the property that you locked in + $3,000 that you paid for the
of financial market condition. It would be as if, for whatever reason, you
option). Isnt that amazing?
wanted the value of the property to depreciate instead of appreciate.
Binary Advantages
Make Money in Any Market Condition and Direction
You can make money if an asset goes up, down, or sideways. And with
some strategies, you can even be wrong on an asset's direction and still
make money.

Of course, this does not mean you can just close your eyes and make a
random choice. But it does mean that, if you understand the market, you
can make money in virtually any market condition - even when you're
unsure of how the market will perform.

Flexibility
You can get started in Binary Options with only a fraction of the money you
would normally have to invest to own an actual asset. And Binary Options
strategies come with a guaranteed limited risk.

While buying assets usually involves a more risky investment amount,


buying Binary Options requires much smaller amounts, often a fraction of
asset prices, and there are so many different ways for you to make money.

Fast Results
With Binary Options you are able to see the results of your investment in
as little as 60 seconds. They are a fast and simple way to make returns on
investments.

Variety of Options
There are so many different assets that you can choose from. You can
select from a number of Currencies, Commodities, Indexes and Stocks so
you are able to make a variety of selections.

Profitability
If you invested correctly, you are able to profit from yields that are often
around 75% or more of the buy-in amount, and you will see the returns
almost instantly.

Want to learn more? Great! Lets continue.


Sell, Rollover and Double-up. Simple.
Terminology
We know that terminology can be boring to learn at times, but While the terminology is technical, we recommend that you review
at bitplutos we believe in an informed and well-educated trader. Dont our examples and scenarios so that the terms will make sense to you.
worry; well try to make even this section interesting. You will find that after repeating them a few times your confidence and
understanding will grow exponentially.
With bitplutos you will learn to anticipate asset direction based on the
understanding that market history tends to repeat itself. Learning
common price curves helps the trader to anticipate where the market will The Platform
go next. You will learn when to take a call position and when to take a put
position on an asset. Traders buy a call position when they expect the
price of an asset to go up and a put position when they expect the price to
go down.

Got it? Call - up, put - down.


The next terms you need to know are strike price and expiry. Strike price
is the exact price that the asset is at the moment that you take the call
position. Expiry is the time at which your position will end and the success
of your trade will be determined. If, for example, you buy a call position that
gold will increase above its current price by one hour from now, the current
price of gold would be the strike price and one hour from now will be the
expiry.

Call, put, strike price and expiry. Got it.

Now lets say that the hour expiry time for your gold call position is almost
at the expiry time, but the price is currently lower than your strike price.
This means you are out of the money. If the price is indeed above your
strike price but it is before the expiry time, you are in the money. Here is what you see in the Platform:
Out of the money and in the money. Great. 1. Asset: The Currency, Commodity, index or stock you want to trade
If you are out of the money (or even in the money) you still may have the 2. Expiry: The time that your trade will expire and the success of your
option to minimize your losses and get out of the deal early, or you might position will be determined
even be able to increase the time until the expiry. Minimizing your loss
3. Amount: The amount of money you would like to invest
and getting out of the option early is what we call a Sell. Extending the
time until the expiry is what we call Rollover. Keep in mind that a Sell will 4. Trader Choice: Where other traders stand relative to this position
still be at a loss, albeit a lower one, and a Rollover will decrease your profit
5. CALL or buy option
potential.
6. PUT or sell option
Now, lets say you are so confident in the call position that you took for gold
that you want to add to that position, you might be able to Double-Up. Doubling 7. Payout Percentage: Percent of your investment that you could be paid
up will increase the amount of money that you have in the position and will 8. Potential Payout: Money you receive if correct
also increase your potential payout.
For All Positions:
The Products
Once you have Chosen the CALL or PUT option a pop-up screen will Not only are you able to trade with many different assets, but you are also
appear: able to trade using many different products. Depending on how the market
is performing, you may choose different products to use. Each product has
its own benefit for each type of market.
1. Binary Options: The Binary Options product allows traders to predict if
a selected asset price will go up or down within the same trading day.
You trade with binary options in order to take advantage of momentum
that was generated in favor of a particular asset by current news and
economic events. This product allows you to cover the option before
the end of the day, thereby receiving somewhat quick results. You can
choose from a variety of time ranges and expiry times.

2. Pairs: The Pairs Product allows you to trade one asset against another,
by choosing an asset that will appreciate or depreciate compared to
the other asset. This product is unique in that you can trade between
Check to make sure the information is correct. If not, click cancel categories, such as a currency against a stock or a commodity against
to abort the position. Otherwise, the position will automatically be an index.
approved. 3. Long Term: The Long Term Product stands out because it allows you
to trade over extended time periods that often range between one day
to one year and you can choose to trade a variety of assets.

4. 60 Seconds: The sixty seconds product provides fast trading activity in


only 60 to 300 seconds. Choose this product when important economic
prints will have a strong impact on the market. Pay close attention for a
sharp movement by an asset to the down side or to the up side.

5. One Touch: The One Touch product allows you to make a trade when
all financial markets are closed, during weekends, holidays, and after-
hours. This Product present traders a higher payout rate than other
Binary Option products as the asset must reach the goal rate before
the expiry time: As long as the asset reaches the goal rate by 17:10
GMT on any day prior to the expiry date, you have the position. Keep
in mind that the expiry time of the One Touch Product is always the
Once thats done; you are in the trade.
following Friday at 17:10 GMT, meaning that the earlier the position is
You can also see all of your open and closed positions. taken, the more of a chance you have to succeed.

6. Ladder: This product allows you to predict whether an asset's price will
be above or below a specific price level. This means that the larger the
gap between your strike price and the price level that you choose, the
higher the payout. This presents traders with corresponding payouts Both hope and fear are emotions that are dangerous for traders. They
and a relatively high probability of success. The most suitable time to weight a trader down and prevents them from becoming emotionally
use this product is when the market is quiet and movements are low. intelligent traders.

Trade Rationally
How to Take a Position The definition of rational is to do something based on
reason or logic, and this applies to trading as well. To
1. Asset: Select which asset to trade with
trade rationally requires one to follow logic and reason. Both hope and
2. Expiry: Select when the success of your trade will be determined If you have a logical reason to take a trading position
fear are emotions
3. Investment Amount: Select amount of money to invest then thats rational. A good way to know if you are using
that are dangerous
logic and reason is to see if you can explain to someone
4. Direction: Select in which direction you believe the asset will go
else why they should take the same trade as well. If you
for traders
are able to then you probably have good reason to take
the position.
Trading Psychology
Introduction The Challenge of Online Trading
To become a skilled trader you must learn to control your emotions. There Online trading usually requires one to open an account with more money
will be times that your emotions will try to take over, but you must learn than they will actually use in one trade. This can be a challenging situation
to trust your logic and trading education in order to be successful. In because without feeling the cash in your pocket, its very easy to forget
this chapter well teach you habits of successful traders and how to gain that youre trading with real money. Therefore, its important to remember
positive trading psychology. that the money you trade with is coming out of your pocket, and that
you should never place more money in your trading account than youre
The Myth of How the Brain Works comfortable with.
There are those who will tell you that in order to make logical trading
7 Habits of Successful Traders
decisions, the left side of your brain must dominate. People will tell you
that thinking with the right side of your brain will cause you to make rash Now here's a summary of our seven habits of successful traders: 1) They
and emotional decisions. Modern research has shown that while certain understand the true realities of the markets. 2) Theyre responsible for
thought processes and brain activity may occur on one side of the brain, we their own trading destiny. 3) They only trade with proven methods. 4)
make decisions with both sides of our brain. Our 2 brain hemispheres are They trade in correct proportion to their capital. 5) They understand how
in constant communication. To become a successful trader, understand to manage risk. 6) They follow long term trend and dont lose sight of the
that you cannot suppress trading ideas, but you must embrace them and forest. And 7) They keep trading in perspective.
choose which ideas will work the best. Important Rules that will Help You Psychologically
Symptoms of an Emotional Trader Here are some important rules that will help your trading psychology.
The symptoms of an emotional trader all emanate from hope and fear. First, learn the rules and foundations of trading that we will provide you
When one begins trading and loses a large sum of money but they continue with. Second, make sure youre not trading emotionally. Third, make sure
to trade, this is hope. Hopeful traders rely on luck and dont evaluate their you dont spend too much time sitting and trading. The only way to gain
mistakes. When one feels a heaviness in their chest while trying to take a perspective is by taking a step back. And fourth, learn from your wins and
position, but is unable to trust their trading knowledge, this is fear. Fearful from your losses.
traders will lose one position and will shy away from continuing.
Summary The Trap of Winning
In this lesson youve learned that our brain makes decisions as a whole, Dont regret winning small amounts. If you stuck to your education and
youve learned the symptoms of an emotional trader, youve learned the you made a small profit, don't regret that you didn't risk more money on
importance of trading rationally, that online trading is a challenge, and the trade. You stuck to rules and chances are that youll continue to be
youve learned the 7 habits of successful traders. profitable. A trap that many investors fall in to is that even though they are
consistently winning small amounts, they get used to the small winnings
and without noticing, progress towards more risky trades. If you stick to
Winning Tactics your education and trade with our minimal risk strategy, you won't fall in
In this chapter we'll discuss how to acquire a winning strategy for Binary to this trap.
Options. It's important to keep in mind that whether you are new to Binary Trust Yourself Over the Experts
Options, or you have a lot of experience trading, there is always room to If your trading education is telling you that
improve, and we are sure you will improve your skills with us. an asset is headed in one direction, but you
The 4 Goals of Trading hear experts and read articles of investors
telling you the asset is headed in the other
Before trading it's essential to come up with a list of trading goals.
Obviously, we'd all love to be successful, but if making quick money is direction, trust yourself. If your education
your only goal of Binary Options, then you need to take a step back and re- is telling you something, this is not just a
assess your motivation. All expert traders have goals and it's important to hunch, but is the correct way to go.
get into that same mindset in order to ultimately become one. Summary
1. Make it about the climb: The first goal should be to change your goal In this chapter, you've learned the ways to acquire a winning tactic. You
from being profitable to growing your trading skills. Remember that learned the 4 best goals of trading, a trap that winners often fall into, and
profit does not come easy, so if you plan on making a few quick trades that if your trading foundation is telling you something different than the
and making all of the money you'll ever need, you could be fooling news, you need to trust yourself over the articles and shows.
yourself.

2. Set boundaries: Come up with rules for yourself and stick to them. You
Economic Events
need to decide how you'll enter the market, how you'll exit it, and how
you'll manage risk. As previously stated, market news is a foundation of fundamental analysis.
When trading, its important to pay attention to what economic data is
3. Not making a trade can be as important as making one: Making a trade coming out of each country in order to understand in which direction to
is always tempting, but sometimes a trade opportunity is simply not trade. Here are some of the important economic events that have a major
available. If your training and logic are telling you to hold off on the effect on the market: employment data, inflation data, growth data, and
trade, then listen to yourself. housing data, as well as Central bank press conferences, and monetary
4. Migrate towards simplicity: A mistake many traders make is that they policy meetings. Each of these events are made up of many pieces of
migrate towards more complicated markets and trades. It makes them economic data.
feel more professional and often causes them to lose money. Stick Here's an example of how an economic event affected the market: On May
with the markets and strategies you know and youll gain more from it. 22nd 2015, US Federal Reserve Chair Janet Yellen announced that if the
US economy continues to strengthen, an interest rate hike is likely for this
year. This immediately caused a jump in value and volume of the US Dollar.
Japanese Candlestick Chart Support, Resistance and Fibonacci Numbers
Technical Analysis is a method of indicating a markets future performance Some important concepts in technical analysis are support and resistance
by evaluating its past performance. We do this by analyzing statistics and levels, as well as Fibonacci numbers. Stated simply, support and resistance
charts that show us how the asset or industry has been performing. The are an assets floor and ceiling. They are levels that an asset has historically
most popular chart to analyze is called a Japanese candlestick chart. This shown to not fall below or rise above. Fibonacci numbers are a way to pre-
chart style is so popular because it provides a lot of information and is easy determine support and resistance levels. It's important to keep in mind
to understand. Japanese candlesticks are also referred to as OHLC which that while these concepts can provide insight to when an asset will change
stands for Open, High, Low, and Close, because each candle provides you directions, they are not based on fact, but speculation.
with that specific information for each asset. The candlestick also displays
Support: This is the level at which an asset has historically shown not to
green if the asset is up, or red if it's down.
fall below. It is a basic level at which investors generally like to buy an asset
because they believe that the asset will appreciate from this point. The
more low points that comprise a support level, the stronger the support. If
the asset breaks the support level, a downtrend is expected to occur.

Resistance: This is the level at which an asset has historically shown not
to rise above. When an asset reaches its resistance level, investors will
generally sell the asset because they believe it has reached its maximum
price for now and will start to depreciate. The more high points that
comprise a resistance level, the stronger the resistance. If the asset breaks
the resistance level, an uptrend is expected to occur.

Fibonacci Numbers: One popular method that is used to determine support


and resistance levels is Fibonacci numbers. They are calculations based on
the premise that markets will retrace part of its previous movement, after
which it will continue towards its original direction. These calculations
Trends help to determine where an asset might find its support or resistance.
When you look at any economic chart, you may notice a certain theme. It
Moving Averages
may look as the asset is headed in a positive direction, a negative direction,
Looking at moving averages can make data analysis less confusing,
or in a steady direction. This theme is known as a trend.
because they make an average from previous data in order to get a clearer
Uptrend: An asset with an overall positive trend is called an uptrend. This picture of how an asset is performing. Depending on how many days of
doesn't mean that the asset will not have any red candlesticks along its data your moving average is using, you will be able to make a clean chart
uptrend, but when looked at broadly, its highs and lows continue to rise. in order to assess an asset. If, for example, you are using a 10-day moving
Downtrend: On the flipside, an asset with an overall negative trend is called average, each point on the graph is the average of an assets performance
a downtrend. The asset may still have some green candlesticks along the for the previous 10 days.
downtrend, but a broad picture will show lower lows and lower highs.
Bollinger Bands
Ranging Trend: An asset that seems to be staying at the same level is Utilizing moving averages, Bollinger bands are lines that are two deviations
known as a ranging trend, because it stays within a range. In order to away from the moving average. This makes them a measure of volatility or
determine this type of trend you need to take a broad look at the chart. movement. Investors often look at the width of Bollinger bands to predict
how volatile a market is going to be. If the bands are far apart, meaning
increased volatility, this may signal decreased future volatility, but if the
bands are closer together, meaning decreased volatility, this may signal
upcoming increased volatility.

Retracements
Sometimes an asset is headed in an overall positive direction but there
are a few minor dips along the ascent. These descents are known as
retracements. A downward dip does not always mean that an asset will
be headed downward for an extended period of time, but it just might be a
slight dip for the short-term.

Summary
In this chapter, you've learned the essentials of market analysis. You've
learned about fundamental and technical analysis, supply and demand,
the importance of economic events, about a Japanese candlestick chart,
trends, support and resistance, and ways to assess where a market is
headed.

The Fundamentals
Fundamental Analysis means to take a deeper look at how an asset
or industry is performing as a whole. It is looking at an overall financial
state of an economy and focusing on factors such as important
economic date that are released almost daily. Here are some of the data
categories that we like to focus on when performing a fundamental
analysis:

Taking Advantage of Global Market Cycles


The global economy and market always runs in cycles. bitplutos will help
you to understand at which point the economy is in the cycle and this will
help you make successful trades. The advantage of trading with Binary
Options is that you receive the flexibility of entering and exiting the
market almost immediately. It is as if you see a carousel with a shiny
diamond that is on one of the horses and at just the right moment you
reach out and grab the diamond and immediately exit the carousel. It is
the same with understanding the cycles of the economy. Understand
when to get in and when to get out.
Taking Advantage of News my countrys National Bank and I tell everyone that my market is strong
and I show confidence, that is called a Hawkish Tone, but if I say that my
Another fundamental of trading is to understand that current news and
countrys market is weak and I sound uncertain, I am showing a Dovish
events have a major effect on the market. While there are many examples
Tone. As you have probably deduced already, Hawkish tones usually go
of this, here is just one. People generally like to make safe investments.
with Bullish markets, and Dovish tones usually go with Bearish markets,
Investing in the stock market is considered a risky investment because
although not always.
no one can ever predict what exactly will happen, but potential payouts
could be very high and higher than interest rates that a bank will offer. If,
however, the United States Federal Reserve decides right now that it will
Technical Analysis 101
start offering a higher interest rate, more people will move their money
Technical Analysis is a method of indicating a markets future performance
from stocks, which are risky, to their banks savings account, which is safe.
by evaluating its past performance. We do this by analyzing statistics
This would translate into an increase in value of the US Dollar. This might
based on a study of the market history or market trends.
translate into a Binary Options trade by buying a call (up) option on the US
Dollar currency. Do you see how it all fits together? 3 Technical Principles

Taking Advantage of Volatility, Rumors and Sentiment 1. Market action Fundamental, political and psychological data are
actually reflected in the price of an asset. The basis of all economic
Volatility is when asset prices and futures are producing a lot of movement.
and fundamental forecasting is the action of supply and demand
When an asset is up sharply or down sharply they are producing volatility.
shifts. Charts reflect bullish or bearish psychology of the marketplace.
Volatile movements are important for trading because you can either
decide that the asset will continue rising and place a call position, or you 2. Prices move in trends The purpose of charting and price action is
can decide the asset will turn around and start to fall and thus place a put to identify trends in early stages of their development & trade in its
position. direction a trend in motion is more likely to continue than reverse.

Rumors, while they may or may not be accurate, still affect the market. If 3. History repeats itself Based on human psychology, which assumes
it is rumored that the US Federal Reserve will raise interest rates, this will that patterns that have worked in the past will continue in the future.
inevitably cause stocks to fall and the US Dollar value to rise.
Some of the methods by which technical analysis and trends are assessed
Sentiment is a general feeling and emotion surrounding a certain market. are through: support and resistance levels, moving averages, Bollinger
If a market has a strong sentiment, we call it a Bullish market. If my market Bands, retracements and Fibonacci numbers:
has a weak sentiment, we call it a Bearish market. If I am the President of
Support
This is the level at which an asset has historically shown not to fall below.
It is a basic level at which investors generally like to buy an asset because
they believe that the asset will appreciate from this point. It is not a proven
fact, but the support level can help in decision making.

Resistance
On the opposite side, resistance is the level at which an asset has
historically shown not to rise above. When an asset reaches its resistance
level, investors will generally sell the asset because they believe it has
reached its maximum price for now and will start to depreciate.
Fibonacci Numbers
One popular method that is used to determine support and resistance
levels is Fibonacci numbers. They are calculations based on the premise
that markets will retrace part of its previous movement, after which it
will continue towards its original direction. These calculations help to
determine where an asset might find its support or resistance.

Moving Averages
Asset prices are in a constant state of movement and this can sometimes
make data analysis confusing. Looking at moving averages can help
because they make an average from previous data in order to get a clearer
picture of how an asset is performing. Depending on how many days of
data your moving average is using, you will be able to make a clean chart
in order to assess an asset. If, for example, you are using a 10-day moving
average, each point on the graph is the average of an assets performance
for the previous 10 days.

Bollinger Bands
Utilizing the moving average, Bollinger bands are lines that are two (exclude
outliers) away from the moving average. This makes them a measure of
volatility or movement. Investors often look at the width of Bollinger bands
to predict how volatile a market is going to be. If the bands are far apart,
meaning increased volatility, this may signal decreased future volatility,
but if the bands are close together, meaning decreased volatility, this may
signal upcoming increased volatility.
Retracements The Government's Role and Credit
Sometimes an asset is headed in an overall positive direction but there The largest buyer and seller in any economy is the government. The
are a few minor dips along the ascent. These descents are known as Government consists of a Central Government that collects taxes, and a
retracements. A downward dip does not always mean that an asset will Central Bank that controls the amount of money and credit available.
be headed downward for an extended period of time, but it just might be a
The Central Bank controls credit in two ways: by changing interest rates,
slight dip for the short-term. Retracements help to determine if this is just
and by printing money. Credit is the most important and volatile part of an
a short-term drop or if its something more concerning.
economy.

You see, people want to buy items that are more expensive than they can
Economic Growth afford, and credit helps to make this happen. When one borrows money,
Introduction they have to re-pay the principal amount of money borrowed plus interest.

Economic growth is the underlying foundation of all economies and is When interest rates are high, people will borrow less, and when interest
defined as a long-term expansion of production. It is what drives most of rates are low, borrowing will increase. This transaction, where lenders
a country's monetary policy. promise to repay a loan, and lenders lend money on that promise, creates
credit.
Growth is important because it helps to reduce poverty, improve living
standards, reduce unemployment and it lowers a government's budget The 2008 Credit Crisis, Interest and Inflation Credit is the
deficit. Another name for credit is debt. As soon as credit is reason why we have
There are many different factors that determine the rate of economic created it becomes debt. When a borrower receives economic debt cycles.
growth, and growth for one economy usually means growth in other credit, he can increase his spending. An economy that
economies as well. Credit is the reason why we have economic debt cycles. produces a lot of
Growth Drivers An economy that produces a lot of credit, also produces credit, also produces
There are a few factors that determine if an economy is growing, and these a lot of debt. a lot of debt
factors apply to all economies, whether developing or developed. Credit and debt are not necessarily bad. Theyre only bad when they
become too much of a burden to handle, and the borrower is not able to
1. Increased stock value. If the value of a company increases, so do its
settle his transactions.
employees.
When economic activity increases we call this an expansion. During an
2. Increased size of the active labor force. If more people are available to
expansion, prices of goods begin to rise. When spending increases, so do
work, more companies will hire.
prices of goods.
3. Increased labor quality. The better the quality of work, the better
When prices rise we call it inflation. The Central Bank does not like to see
product thats in the market.
inflation increasing too much because it causes problems, so in order to
4. Increased productivity. If there are more products produced then the keep inflation in order, the Central Bank will increase interest rates and
company will be more available to the world. borrowing will decrease.
5. Institutional stability. When theres a democracy theres a better chance But, if inflation and borrowing rise too much its called a bubble, and debt
the economy will be stable. starts to rise faster than income.
6. Increased Demand. Simply put, the more demand, the greater the
amount of trade.
This gives people less ability to pay off debt to the bank. When people hear
there are others having difficulty repaying their bank, they rush to remove
their money from the bank. The banks get pinched and everyone defaults
on their debt.

This causes a depression. People restructure their debt and agree to pay
back less money.

This is also difficult for the Central Government, because they collect less
taxes while having to spend more for unemployment and also increase
spending to pump more money into businesses.

The Government can collect more money by taxing the wealthy. In order to
give more people money, they Central Bank can finally print more money to
buy financial assets and government bonds, and the Government can buy
goods and services.

The Central Bank needs to make sure it doesnt print too much money
which causes too much inflation. This is where a Government and a Central
Bank need to be on the same page.

Debt burdens that are too large cause less spending, less income and less The ultimate goal is to get income to grow faster than debt. If income
borrowing. grows faster than debt, people become more credit worthy and they can
borrow more money, and the economy can slowly start to recover from its
This is called a recession, and it occurred in the U.S. in 1929 and again,
recession.
more recently, in 2008. Incomes fell, asset prices dropped, banks were
tightened, the stock market crashed and credit disappeared to the point The European Debt Crisis
that people could not borrow. Simply put, the European debt crisis is the woes of the Euro, the currency
Borrowers sold assets in order to re-pay loans, and this flooded the of 19 European countries. Over the past 4 years, a few of the countries in
market. The problem in a recession is that Central Banks have no control the Eurozone were close to bankruptcy, with Greece being at the forefront.
because they can only lower interest rates so much. Lenders don't lend But how did it get to this point?
and borrowers dont borrow. Prior to World War II, all the European countries had their own currency
Dealing with a Recession and their own trade laws. This caused a lot of separation and infrequent
intra-country trade.
An economy can reduce debt in 4 ways. One way is to cut everyone's
spending, including government spending. Another way is to reduce debt The devastation of WWII was so great that the only way Europe could
by debt restructuring and bankruptcy. A third way is to redistribute wealth rebuild was by making intra-country trade easier. 27 countries signed an
from those with more money to those with less money. And the fourth way agreement and made the European Union or the EU.
is by the central bank printing more money. In the year 1999 the EU decided on one currency across the entire region
All of these strategies were used in the U.S. in 2008. It is a long process that they called the Euro. They also agreed on the same monetary policies
that gets worse before it gets better. How? Because, cutting costs forces made by the same source, the European Central Bank, or the ECB.
businesses to lay people off.
This also became a problem for most EU countries except for Germany,
and that is exactly where the rest of the EU looked to for help.

Germany agreed to help, as long as the debtor countries would accept to


change their laws, known as austerity, and would agree to less benefits and
a higher retirement age for citizens. Most countries were okay with this,
except for Greece. To make matters more difficult, an extremely left wing
government was voted into office which still say that they will not accept
austerity measures. And even if Greece would accept these measures for
the short term, there would be no laws in place to ensure that this problem
would not happen again.

Which brings us to today. In order to receive help from the EU, Greece and
the rest of EU countries must accept fiscal responsibilities, and put a set
of rules in place that will ensure the situation they are currently in, will not
happen again.

Safe Investing
After the recession of 2008, investing became very unpopular, and for
good reason. Many people lost a lot, if not all, of their investments. But
although investing is relatively risky, there are ways to make it safer than
ever before. Here are a few tips to remember in order to help you stay safe
in an uncertain market:

1. The market has recovered before and will probably recover again this
time. Remaining patient even while it may be difficult, might be worth
But while all countries now had the same monetary policies, they still had
it in the end.
different fiscal policies. Fiscal policies are made up of how much money
the government collects in taxes and how much money it spends. If a 2. Figure out how much of a risk you feel comfortable taking. For this you
government wants to spend more money that it collects in taxes, it has to can also refer to our "money management" video.
borrow money, which is termed deficit spending. 3. After you've figured out how much money you feel comfortable
Now that Greece was part of the EU, it was able to borrow a lot of money investing, spread your money out over a few different assets in order
from larger countries in order to hire more government workers, pay more to diversify yourself.
in pensions and allow people to retire earlier. 4. Always remember that no asset is a "sure thing" and odds are that your
In other parts of the EU, debt was created from a housing bubble much investment will not rise forever. Therefore, it might be a good idea to
like what happened in the U.S. The debt that was accumulating in the EU walk away when you've already gained.
caused all of the countries to become financially intertwined. 5. Dont invest more money than you actually have.
The growing debt was of no concern until the year 2008, when the United Utilizing these tips is a sure way to keep yourself safe in the market.
States economy collapsed and brought down most other economies with
it. Countries were not able to re-pay debt, and Greece's economy collapsed.
International Trade can therefore not produce wine at a low price. Country U on the other hand,
has a robust grape supply, and can therefore produce wine for a low cost,
Consider for a minute how much you depend on international trade in your
but does not have a robust cotton supply, and clothing from Country U is
everyday life. Take just your cell phone. Chances are that at least some of
expensive. As you can probably guess, Country C will focus its production
its parts were made in China and Malaysia, and it was probably designed
on Clothing and buy wine from Country U, while Country U will focus
in the US or Canada.
production on wine and buy clothing from Country C. This scenario forces
And this example extends to your car, your food, and even to your clothing. countries C and U to have very close economic ties, and the relationship
International trade is not just a nice idea but its an essential component can easily escalate to beyond just trade.
of any economy. Some economies may consume more, while others may
Another advantage of International trade is that it encourages investing
supply more, but trade between countries is an integral part of economic
in foreign companies and assets. When an investor notices that a certain
growth.
country is the main supplier of a particular item, and the investor believes
A broader name for international trade is Globalization. In business the demand for that item will increase, theyll invest in that item, and thus
terms, globalization is the process of international integration that comes invest in the supplying country.
through an exchange of products. It is the way in which transactions bring
The integral role that international trade plays in our lives cannot be denied.
our very large world together. While globalization is a modern term, the
idea of buying and selling goods internationally is not new. During ancient
times traders would travel long distances via camel in order to sell their
Global Market Sessions
goods in a distant land. The difference nowadays is that due to modern
infrastructure and communication, countries that were previously unable When to Trade
to trade with other countries are now able to trade all over the world.
Country Currency Time (GMT)
Globalization also benefits the consumer. The more choices that are out
there in the market, the lower the cost of the product for the consumer. USA USD 01:30 14:30
In broad terms, the greater the supply, the lower the demand and cost.
Japan JPY 23:50 04:30
Globalization also gives countries the opportunity to supply its citizens
with items that its unable to produce itself.
Canada CAD 12:00 01:30
And there are many factors that affect international trade supply, such as
political events. If fighting between Saudia Arabia and Yemen shuts down UK GBP 07:00 09:30
a Crude Oil port, you can almost immediately expect crude oil prices to
Italy EUR 08:45 10:30
increase, because of the decreased supply.

Some countries are primarily consumers and importers, such as the United Germany EUR 07:00 11:00
States, and some are primarily suppliers and exporters, such as Japan.
France EUR 07:45 09:00
These countries depend on their imports and exports, and an analysis of
the balance between these 2 factors, gives us insight into the strength of Switzerland CHF 06:45 10:30
an economy. This analysis is known as Current Accounts.

Here's an example of how a country becomes a supplier of a particular New Zealand NZD 21:45 02:00
item. Let's say country C has a large supply of cotton and can therefore
Australia AUD 22:30 14:30
sell clothing for very cheap, but doesnt have a large supply of grapes and
chances of earning double profits increases considerably. In this way there
The Global Economic Circle
are many benefits of utilizing Binary Options to get some extra money out
of your investments.

A well planned binary trade like other hedging strategies will have a great
impact on the risk taken against your total holding. Deciding whether to
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and many other sources that will help to analyze the future of the market.

The Option is in your hands!


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Make sure you pay attention before an important economic event or print
RECESSION SLOW is due out. Remember, that in order for an asset to make a large move,
there usually needs to be a motivator. One of the most reliable motivators
for large moves, whether up or down, is economic events.

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Resources
Read market news at sites such as Reuters.com, Bloomberg.com and
You might feel uneasy by the idea of using Binary Options for day trading.
finance.yahoo.com.
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as a partial hedge, and give you the opportunity to profit. If the call and See the upcoming news and events at forexfactory.com
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Risk Disclosure
Binary Option trading and/or Forex trading carries a significant level of
risk, and may not be suitable for all investors. Before deciding to invest in
Binary Option and/or Forex you should carefully consider your investment
objectives and level of experience. You should be aware of all the risks
associated with Binary Option trading and/or Forex trading and seek advice
from an independent financial advisor if you have any doubts. You should
only trade with money that you can withstand losing, and you should never
trade under the assumption that you cannot lose the funds you trade with.
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