When investing on the binary market, traders often use a certain set of classic underlying assets that have the highest possible liquidity level of contracts, and provide ample opportunities for profiting. But today we will consider the advantages of trading and forecasting approaches when working with the so-called safe-haven assets — Gold and Silver, which investors use to save and increase their capital in the midst of difficult market conditions.
So, despite the low level of profitability of options on silver and gold, on average, this figure is from 55 to 65% profit on a contract, these assets are very attractive for daily trading. The reason for this is simple – the logical reaction of the price of assets to news and statistics from the financial market, and the good level of predictability of trend reversals in classic quoting on the exchange market. If you look at the price chart of gold or silver during periods where there is an absence of news, investors can notice clear lingering trends with a minimum of corrective rollbacks and clear levels of reversals. This makes it possible, on the basis of classic indicator strategies, to form a large number of effective forecasts and to obtain a stable profit. Let’s consider some simple technical approaches to working on gold and silver for the binary trader.
A classic strategy, «Trading on the News»
In this case, investors use these instruments as classic safe-haven assets – when the quotes of the main financial instruments (the US dollar, the euro, the pound) perform unpredicted chaotic movements or show a rapid drop in value, gold and silver appear on the scene. Only by investing funds during this period on the exchange market will traders be able to make a profit, or simply keep their investment capital. Against this backdrop, the classic method of trading will be «Trading on the News.» Here, unlike how we work with the main assets, the betting approach has a slightly different format – unlike the classic signal for news trading with currency pairs in the form of good and bad news, it uses a signal in the form of news that can provoke market uncertainty that would be considered neutral for the main instruments. So, if the statistics show a slight deviation from the forecast or the data fully corresponds to the prognosis from professionals, for example, on the classic asset for binary trading, the EUR/USD, the market may become uncertain, and the instrument’s price will make rapid multidirectional movements, which will not allow the trader to make a clear forecast. Therefore, having obtained the statistics at the forecasting level, it is recommended to use gold or silver as the underlying asset, as their quotes will have the highest level of forecastability in this situation. A practical example is this quote reaction to a statement of one of the FOMS members:
As you can see, investors cannot clearly define the policy of this institution, and for this reason quotes are moving chaotically without a clear direction. At this very time, the gold chart builds a clear trend up, which makes it possible for the binary trader to earn:
Thus, any bad news for the main financial assets is an excellent signal for the growth of gold and silver quotes.
An indicator type strategy for scalping on gold and silver
Now let’s take the standard mode of quoting these underlying assets, the time period when there are no important statistics, silver and gold form clear undulating building modes for their trading quotes, which is the optimal situation for highly dynamic trading – scalping. Here we suggest the following mode of price forecasting using a set of technical analysis indicators:
- Install on the chart of silver or gold (usually the quotes of these assets move in the same direction, so the choice of financial instrument depends on your preference) the following set of indicators: SMA 15, 10, 5 and the standard MACD oscillator
- Register trading contracts depending on the direction of divergence of the MACD oscillator lines and the intersection of the moving averages of the SMA indicators:
With this easy method of instrumental analysis of silver and gold quotes, you will be able to get profitable contracts at a rate of up to 87%, and, given the frequency of expiration rates – from 2 to 5 minutes, which is optimal for trading on this system – you will also get high profit growth dynamics.
As you can see, binary options trading on gold and silver, despite the minimum liquidity figures for options, demonstrate indisputable advantages for the investor – high levels of forecastability, dynamics of trading, and overall performance indicators. An additional condition for binary traders to work effectively on gold and silver is the choice of a professional trading terminal that will be equipped with good forecasting tools and will offer the highest level of liquidity for trading contracts on this type of asset. In this regard, we recommend the platform from the secure European operator Binomo, where the most optimal technical and financial conditions are offered for efficient binary trading.