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Trading Foreign Stocks and Indices

Euro Dollar TradingIn the U.S. binary options market, the most popular things to trade are those underlying assets that clients have the most knowledge of. This inevitably means that U.S. centric assets are traded. This includes currency pairs that involve the U.S. dollar, the major U.S. indices, and the stocks that comprise these indices. This is all fine and well, but it does pose an interesting opportunity for many traders. If the binary options broker you use is based in the United States and has mostly U.S. clients, the odds are that the foreign stocks and indices being offered might have higher rates of return in order to get their clients to start trading these less popular assets.

The mechanics of international assets are quite the same. The technical analysis side of things will not change much if you are looking at foreign assets. A new type of knowledge is needed for fundamental and sentimental analysis of these assets, though. As you know, a mixture of all three types of analysis is going to give you the best long term results when it comes to your profits, so how do you adapt your trading to take advantage of this expanded marketplace?

The first place to begin is to look at assets that fit into a sector you are familiar with. For example, if you are an expert at trading Apple and Google binary options, trading tech stocks will be your best bet. There are many European and Asian tech companies out there. If you are familiar with the way to successfully analyze a domestic tech company, there is a better chance that you will be good at analyzing foreign tech companies as well.

The next step is to learn to interpret the data from the foreign stock or index’s home nation. A company that is based out of a struggling European country—Greece comes immediately to mind—will likely be facing a tougher challenge than a well off nation like Germany. The good news here is that many countries are quite similar to the U.S. when it comes to analyzing this aspect. You want to look at how their main markets are performing, how their currency is doing in comparison to the USD, and you will also want to look at the economy’s overall health too. These things are all factors that you would look at when conducting fundamental analysis of a U.S. stock.

Trading World EconomyAfter you do this, you want to look at press releases and news reports. Digging up this information is going to be a bit more difficult, especially if you are researching a company that is not from an English speaking country. In these instances, you will need to find summaries written second hand. This might cause a delay in data mining—this will make short term options a lot harder to do well within. So the best course of action here is to avoid 60 second binary options when dealing with foreign companies. Focus more on longer term binary options and you will see a higher success rate.

Finally, you want to make sure you are getting the best rates. This should go without saying, but many people do not compare the different underlying assets within their preferred broker. An option that pays back 85 percent is going to be superior to an option that pays back 75 percent. If you are unfamiliar with the higher paying option, a quick run through of the above mentioned points will act as a crash course in how to act. Even if your correct trade rate is a bit lower for the lesser known asset, the superior payout should more than offset this.

Trading foreign stocks and indices might be a bit more difficult, but if your broker gives better payouts, it is in your best interest to venture out of your comfort zone and start reaping the benefits of a better rate of return.
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