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With binary options trading, you are not tied to just one type of asset. Its advantage over other trading instruments is that it allows investing on any asset which you are most comfortable with regardless of its classification thus giving you more trading opportunities and more potential profits.
There are four asset types that traders purchase in binary options:

Stocks

This is the type of asset which traders have the most knowledge of. This is because stock markets are getting more exposure in the media as compared to other assets. Another reason is that most of the common stocks are from known companies like Apple, Google, Microsoft and more. Trading stocks is easier as compared to other assets since it is easier to get data from financial news reports and updates. For example, if Apple will release a new iPhone model then there’s a high probability that the stock prices will increase after the announcement. The increased overall winning rate is the reason why a lot of traders prefer trading on this type of asset.

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Currencies

This asset is always composed of two different currencies that are traded as pairs. This is due to the currencies being unrestricted of underlying restraints like being linked to gold. Each currency’s exchange rate to every other global currency will always change because all of these currencies are freely traded on the Forex markets.
There are a small number of major currencies and a lot of minor currencies. Minor currencies are usually traded against major currencies in Forex markets but with binary options, a major currency will only be traded with another major currency.

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Commodities

Brokers are also accepting trades for commodities, most of which are the raw materials that are needed by manufacturers for making electronics and other products that require precious metals like gold, silver and copper. Transporting and delivering these products requires another commodity which is oil to power ships and vehicles. It is also closely related to the wealth of the countries that produce these commodities with a strong influence on the prices of other assets.

The price movement of this asset type can be easily tracked and analyzed which is why it is known to be the easiest among the four classes. All you need is to have a deeper understanding and knowledge on how the prices of commodities move. You have to know which certain period the value of a commodity is set to go on an upward trend.

Indices

Indices are the asset type that novice traders usually find to be the most challenging. To make things clear, an index is the average of various assets that form a market. Each market functions like a collection of securities for a certain region or country which calculates all the values of these combined assets to form a single market value. This price is the sum of the performances of all the assets that form the index and is considered to be the average score for their market performance.

With a binary broker, you can trade on large indices like the DOW Jones, FTSE 100, Nikkei and other world markets. The price of indices is not prone to movements although minimal market changes happen daily. This asset class however is susceptible to minimal fluctuations which is why it predicting the movement of indices are more challenging as compared to the other asset types.

Please be aware that you cannot easily reach an expert level or status as this requires careful analysis in order to yield successful trades. Establishing a deep understanding of each asset type will give you the ability to recognize trends and make more solid predictions on the price movements. For every asset type, you will need a certain level of knowledge and familiarity to clearly identify the factors that influence their prices. It is also very important to remember that trends are only applicable to a certain asset. There’s a possibility that an upward trend for a specific asset type will have a reverse effect on another asset type causing the value to go down.
 

 

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