Wednesday, February 19th, 2014 by Michael Freeman
The most popular traded asset categories in the binary options industry today are currency pairs and stocks oftentimes leaving commodities and indices in the shadows of the financial market. What many people don’t understand is that trading reliable commodities can be an extremely beneficial and a great way to become a more dynamic binary options traders. The aim of today’s article is to provide traders with fundamental knowledge about the big three commodities and what to look for when trading them.
When it comes to analyzing oil as binary option traders we need to look for two main factors. The first factor would be the economic value of the oil. As many of you know that when supplies of a good are low the price of the good will rise and vice versa. The second factor we look for are political announcements that help us dictate the current health and relative factors involving the value of oil. When it comes to trading oil it is all about supply and demand, if we apply fundamental analysis then our chances of trading oil more accurately are more likely.
Gold is perhaps the most valued commodity in the world today and is valued much higher than other commodities. Trading gold can be made easier if we know what to look for and understand the basic factors that determine its value. A great correlation to make when trading gold would be the value of big chain jewelry corporations and their stocks because about 80% of golds value is a direct result of the total supply amounted in these industries. If the prices of these large jewelry corporations tend to rise then the price of gold is likely to follow and rise as well. Another factor to look at when watching gold would be interest rates, when interest rates rise many people tend to invest their money into more traditional assets such as indices and stocks because they tend to collect interest unlike gold.
Silver is a lot like oil because its value is a direct result of supply and demand. When silver is in high demand the value of the good rises exponentially however if there is little demand then the value of silver drops. Another factor that reflects the value of silver would be large traders that try to swing the price of silver in the financial market a certain way to receive higher dividends. When it comes to trading silver it is important that we watch for public announcements and analyze its financial health.
Trading commodities can be a great way to increase your success rate as a trader and become a more dynamic trader. Oil, gold and silver are the most popular and traded assets in the commodity category among larger stock traders and private investors. If you know what to look and what influences the value of these assets then your chances of becoming a successful binary options trader increases significantly. If you have any questions or comments please feel free to leave them below.