Are You Interested In Financial Trading?

If you are new to trading you will already probably know that it can be somewhat of a difficult industry to understand and get your head around when you first start. You will probably hear people try to persuade you to daytrade or trade highly leveraged products like spread betting and futures.

What Elm Trader will do is try to inform you on what is ideal for new traders and why.

In our view always

1. start small and only increase risk based on a Systems Success

2. Never expect to make a fortune overnight despite what you may read.

3. Expect some losses but try to avoid products that can wipe your account out.

ElmTrader is pleased to say we cover all these basic elements by suggesting using products that allow you to start small and allow you to know from the outset of every trade the maximum loss you may incur.

Elm Trader also includes staking software with a large number of its products which in its self is a highly powerful tool both in improving performance and providing sound money management.

The products that we suggest starting with and with which all our systems and services work are Binary Bets (otherwise known as Binary Options) and Fixed odds trades as offered by companies such as betonmarkets.

Why Binary bets – Binary options / Fixed odds products?

Well quite simply they are much much safer and easier to use for new traders. That is not to say more experienced traders are not using these highly profitable and successful products too because they are.

More and more traders are educating themselves and once they see the potential of these products they are quick to see the massive advantages they hold. You will know for example from the outset of each and every trade the amount you will win and the maximum amount you can lose. This is not the case with products such as spread betting and futures where you are open to unlimited losses which can be frightening to all traders let alone a new trader. Who for example wants to set aside $ 2000 to trade and have it wiped out in one trade?

Binary Bet versus Spreadbet /futures trade?

Here is a striking example of the difference between a binary bet and a spread bet or futures trade.. Let us assume we are wishing to trade the UK market (ftse100).

Let us say we wish to trade for one day and we think that the market on this day is going to rise overall.

Now we first open a binary bet quote and are quoted a price of 48 for the UK market to close higher for that day and we decide to risk $ 5 per point. As binary bets work on a price of 0 – 100 this means that if we win we will win 52 x $ 5 = $ 260 as this is the 100 – 48 (cost of the bet) x the amount we mentioned being $ 5.

Now let us say we opened a spread bet and the market stands at 5200 and again we risk $ 5 per point expecting the market to rise. For every point the market moves up we gain $ 5 and for every point the market moves down we lose $ 5. Let us also say we place a stop at 5100 just in case the market should move down and therefore against us.

With the binary bet / binary option we do not care how far the market moves one way or another, all we need is for the market to close higher by the end of the day and we will win.

With the binary bet we know our maximum win being 52 x $ 5 = $ 260 and our maximum loss being $ 48 x $ 5 = $ 240.

With the binary bet we do not really care how far the market moves one way or another, all we need is for the market to close higher by the end of the day and we will win.

However with the spread bet we do care how far the market moves during the day because our whole profit / loss is dependent on it. If the market for example dropped in early trading and we hit our stop at 5100 that would be the end of our trade and we would have lost $ 500 being -100 x $ 5.

Even if the market did close higher without hitting our stop first and closed at 5220 our win would still be less than the binary bet, as our win would be 20 x $ 5 being $ 100 whereas the binary bet would win $ 260.

You may say at this point ok, what if I take the stop out on the spread bet? Well you could but this could open you up to unlimited losses. Say the market fell 250 points on that day you would lose $ 1250 whereas you maximum loss with the binary bet would only ever be $ 240 as mentioned above. In fact the only time you would gain more with the spread bet versus the binary bet is if the market did not touch your stop and actually closed higher than 53 points up on the day. So you can probably see now why we feel binary bets and fixed odds products are an excellent tool for new traders and more experienced traders.

The great news is Elm Trader www.elmtrader.co.uk offers a wide range of systems for different markets and different timeframes. If you like trading the Major Indices for example we have daily, weekly and monthly systems for the major indices including the FTSE, Dow Jones, S&P500 and DAX German Index.

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