Welcome to my Blog post about the new CFD / Forex Trading feature Pocket Option has added to their trading platform recently!
Since beginning of the last week, you now can trade Forex and CFDs inside the Pocket Option trading platform using the Meta Trader 5 Software as web version!
Meta-trader 5 and the previous version, Meta-trader 4 is the most popular trading software for Forex and CFD Broker, now, Pocket Option also provides free Meta-trader 5 access if you open a free demo account with their platform! Watch the video below to see how to get access and use the software inside the Pocket Option Trading Panel!
As you see is it possible to use the Metatrader 5 Software online using the Pocket Option Trading interface, alternatively you can download the Meta trader 5 Software here and add the Pocket Option server, username and password to your desktop version!
Forex and CFD are a little bit different to binary options. While binary options are always connected to an expiration time, a Forex or CFD Trade is not timely limited. Instead you choose 2 Price levels, if one of them is reached, the trade is closed and your win or loss will be added to your balance!
Stop loss & Take Profit in Forex Trading
The first level, and most important, is the Stop Loss. The Stop Loss defines your maximal loss if the price moves against you (How much you will lose in this case is directly related to your position size and your accounts leverage!).
If you do not place a stop loss, and the price moves against you, it may happen that you lose your entire account balance in a single trade.
The Take Profit is the Price level where you exit the trade to realize your profit! When the rpice moves in your favor, the position will be closed automatically and the profit will be added to your balance!
Potential Profits & Losses in Forex Trading
Another big difference is the potential profit and loss. With binary options, you now from the beginning what you can lose and what you can win, the the loss and potential gain are defined by the broker! Forex works differently and a way more complex.
Here your potential profit and loss is defined by several factors: Your position size, your Leverage and your Take Profit and Stop loss level! There is also a fee for your trade or spread, a difference between the buying price and the selling price, this depends on your broker and the asset you trade. This is the way a Forex Broker makes money with its service!
So Forex Trading and CFD Trading is a way more risky compared to binary options trading, as you can lose more than you have invested if you are not doing it correctly!
The big advantage is the fact, that you do not need to mind about expiration time! When the price moves in your direction, but too late, you may lose a binary option, while you still win the Forex Trade!
Another advantage is, that you define the Risk & Reward ratio in your trading strategy yourself. There are many Fx strategies still making profit if you just win every 3. or 5. trade. As the win is several times higher as the potential loss!
Binary Options Strategies for Forex
Can you use your binary option strategy to trade forex? In fact, yes in many cases. The main problem is that a binary options strategy does not offer a way to determine the Profit and Stop levels. Here are a few ways to do this yourself:
Fibonacci -- You can add a Fibonacci Retracement and to determine your profit level and stop loss level as well! Watch this video to see how to draw the Fibonacci retracement correctly!
Support and Resistance Lines -- Connect the highest HIGHs and the Lowest LOWs with each other with a horizontal line. The price often changes its direction on these lines. They can also be used to determine the Stop Loss and Take Profit! Trend lines and the Moving Average can be used the same way!
Fixed Stop loss and Take Profit -- Another option is to define the stop loss and Take Profit on your own. This can work really well if you choose the correct ratio between them!
Indicator Based -- You can use indicators and exit the trade manually when a specific condition is met. Only use this for your Take Profit, never for your stop loss, as you need to exit the trade yourself. (Or build yourself an EA using the EA Builder Software here)
There are many more ways you can use to find a good exit point for both situations!
Keep in mind, the ratio between Stop Loss and Take Profit are the most important aspect. They also define the average time a trade takes! Start inside a demo account and try it yourself to see how it is working!
Best Broker for Forex and CFDs
Beside Pocket Option there are many more broker you can choose to trade Forex or CFD, here are just a few I have used so far:
Finmax -- One of the first binary options broker choosing to offer CFD / Forex trading on their platform! Finmax is only web based and does not provide the Meta trader software. Instead they are providing Charts from Trade-View! Read more about Finmax here!
IQoption -- IQoption also is an binary options broker, providing Forex and CFD on their web-based Platform! They are great for beginner and experienced trader as they offer many tools and assets! Click here to read my IQoption review!
Pocket Option -- Pocket Option is my main broker for binary options. They provide many great features like a good trading interface, the Metatrader 5 software as web version, high returns and much more! Read my detailed Pocket Option Review here!
ICmarkets (Metatrader 4) -- This is my main Forex and CFD broker since years now! It offers low spread, real charts, many great tools (Autochartist for example) and much more! Click here to get a free account and start trading with IC Markets!
More about Forex and CFD Trading
Get More information About Forex & CFD here on my website in the next days! Or sign up for my free PDF about Crypto and CFD Trading! Please leave your comment with your questions below!