A quick look at the asset index supplied by your binary options broker and you’ll notice that the commodities category is the smallest. This is not a purposeful slight against commodities, but simply because not many of them are traded in the open markets. Don’t let this trick you into ignoring this category, however, as commodity trading can be extremely profitable. Though this asset group can be quite volatile in price movement, when trading digital options you can certainly profit from this.
There are differing options about the general price movement of commodities. Some characterize them as volatile, while others consider them stable. The truth of the matter is that like all assets used in binary options trading, the price movement of commodities is dictated by market conditions. What could be stated, however, is that commodities can be more tightly linked to investor sentiment due to the fact that many commodities can be impacted by external factors such as weather. Wheat, corn, oil and coffee are just a few examples.
Binary options brokers today tend of offer the more popular commodities. A solid selection would include crude oil, a few precious metals, and several crop-based products. When trading within the conventional markets, investing in any of these can be extremely expensive. This is why many are not able to trade with commodities. These costs are absolutely nowhere near the same for the binary options trader. With as little as a $100 broker deposit, options traders can start earning money from investing via the digital platform with commodities.
As with other assets, you’ll always know upfront the amounts you stand to gain or lose when trading commodities in this manner. You’re going to find plenty of opportunities and dependent upon your binary options broker, should have plenty of instruments to choose from. During times when price movement is volatile, the basic binary or touch trade would be an excellent choice. When your chosen commodity is displaying a more consistent price, no touch, boundary, and range trades are fine choices.
There are a number of binary options strategies that will pair well with commodities. Both fundamental and technical analysis strategies should work well. If you are new to trading, don’t worry yourself over more advanced and complex strategies right away. There are plenty of basic strategies which are easy to implement and can be quite profitable.
One of the best perks about trading commodities is that there is so much information available in regard to them. Yes, they can be heavily impacted by external factors, but you only need to watch the news in order to know exactly what is taking place. As a binary options trader, this is something that should become a habit, regardless of the asset class you choose to trade with. Don’t fear the commodity if you’re a first-time trader. These assets typically offer plenty of price movement and thus plenty of potential profit for binary options traders of all skill levels.