Much is made today about trading the financial markets whether it be Major Indices like the Dow Jones, S&P500, FTSE100 or Forex markets like the US Dollar / British Pound or Euro on an intraday basis.
Intraday simply means you are looking for trading opportunities to buy and sell the market during market hours.
A much easier and more convenient method is to trade on a weekly basis. In other words you place a trade running normally from a Friday to the next Friday and then leave it alone. Trading weekly is becoming more popular simply because most people do not want to be stuck in front of a screen all day making trades. It also needs to be said that for most people day trading is the fastest way to lose money simply because people tend to trade too often without a sensible money management strategy.
So what products offer weekly trades?
Well currently there are a number of products offering specific weekly trades these include Financial Fixed odds as offered by companies such as Betonmarkets and more recently binary bets (as they are known in the UK )and binary options (as they are known in the United States) as offered by companies such as IG Index and Anyoption.
An example of a typical weekly trade is this. Let’s say we expect the FTSE100 UK market over the next week to rise. We can enter our account with IG Index and ask for a quote for a weekly binary FTSE100 up bet. Let’s say we are quoted a price of 48.
As binary bets and binary options operate on a 0 -100 price band this simply means that if we accept this price we will either win 52 being 100 minus cost being 48, times our per point risk (say $10 per point) total win $520 or we could lose 48 (cost of the trade) times our per point risk (say $10 per point) total loss $480. One of the main advantages of binary bets / binary options you can never lose more than the agreed amount.
No need for stoplosses
This means that you do not need to worry about stops as all you are interested in is where the market finishes the following Friday. If you used a spread bet or futures trade and the market fell sharply say 300 points in the first few days of the week you would almost certainly be stopped out using these products and take a heavy loss in this case £3000 loss.
However if using binary bets or binary options if the market fell 300 points over the first couple of days you would not lose anything. Because you are only interested if the market closes at the end of the week higher than it did the previous Friday. So even if the market closed just 1 point higher over the week you would win $520. And if the market closed down 400 points you could only ever lose a maximum of $480.
From this example you may begin to see why trading weekly with financial fixed odds and binary bets, binary options is a rather attractive alternative to the high leveraged products such as spreadbetting and futures trading.
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