Binary.com Volatility Indices Review

Binary.com Volatility Indices Review

Trade Simulated Markets 24/7

  • Low minimum trade size
  • Payout up to 1000%+
  • Simulated markets
  • Wide range of trade types
  • Low minimum deposit
  • Trade from 1 tick
  • Longer term trades
  • Set volatility level
24/7 Trading of Simulated Markets • Binary.com

Binary.com Volatility Indices Review

Volatility Indices are simulated markets, they are not real markets. Volatility Indices simulate different kinds of markets conditions, with different levels of volatility. Binary.com is a broker which offers trading in Volatility Indices. Its Volatility Indices are based on a propitiatory algorithm which uses a random number generator. Binary.com offers Volatility Indices on MT5, but this review will focus on Volatility Indices on its SmartTrader web trader, as the trader can read an MT5 Volatility Indices review on this site.

The SmartTrader web trader is the main trading platform which the trader will be given access to when signing up. The trader can trade on the Virtual (demo) account until they open a real account and deposit the minimum deposit. The minimum deposit is very low for SmartTrader ($5). As Binary.com has a very low minimum trade size for Volatility Indices ($0.35), the trader can trade with a small account size. Binary.com.

If they wish the trader may speculate with much larger sums. The maximum trade size can vary depending on the trade type. The trade time also varies depending on the trade type, but can be very short indeed, down to 1 tick (which is around 1 second) and out to much longer time frames. The trade types offer a wide range of ways to trade, from formats speculating on the whether a simulated market will be higher or lower than its start value to trade types based on the value of digits in the exit value.

Features offered at Binary.com can vary depending on where the trader is located, but in general Volatility Indices which simulate different levels of volatility are available (classed as Continuous Indices). Volatility Indices are actually more generally classed as Synthetic Indices at Binary.com and there is also another type of Synthetic Indices which simulates Bull or Bear markets, though these are not called Volatility Indices as they do not specifically simulate Volatility, rather rising (Bull) or falling (Bear) markets, though volatility will play a role in these markets as well.

What types of Volatility Indices are offered ?

Binary.com offers the Volatility 10 Index, the Volatility 25 Index, the Volatility 50 Index, the Volatility 75 Index and the Volatility 100 Index. Increasing numbers means that there is a greater level of simulated volatility. Volatility in general refers to the tendency of the market to move, but it can move up as well as down. Traders may prefer a calmer market or a more volatile one and can test out different level of volatility on the Virtual account. The trader can trade these market much like any market, but should note that there may be differences in the behaviour of simulated versus real markets.

The trader can apply the tools available on the SmartTrader platform, which include technical indicators and graphical objects. The trader may look for patterns forming and speculate based on these patterns of they wish. The trader cannot really apply fundamental analysis as the only fundamental value they know is the number indicating the volatility of the market (i.e. there is no input from economic data to affect these markets). However unlike real markets they can at least set the volatility to some extent, as real market can radically alter in their volatility, though the trader can also find real markets which tend to more or less volatility (though this can change).

So its a different kind of trading to some extent from real markets, despite similarities. For each Volatility Index, the trader has the choice of a wide range of trade types based on their choice of volatility. Binary.com.

What are the trade types ?

Beside the Synthetic Indices box on SmartTrader (where the trader finds the Volatility Indices) is the trade types box. Inside are different different trade types with different types within some of these. The trade types are Up/Down, Touch/No Touch, In/Out, Asians, Digits, Lookbacks, Reset Call/Reset Put, Call Spread/Put Spread, High/Low Ticks and Only Ups/Only Downs. The names of these trade types point toward what they do, which is to set a format for trade to determine what is a successful trade and what is not.

Below the order box on SmartTrader are two menus, one the Chart and the other the Explanation. The Explanation explains how each format works and the trader should study this before making any trade. However a short categorization of each follows.

Up/Down compares the exit and entry value with itself or a barrier value. Touch/No Touch tests if the market value reaches a barrier value. In/Out test the value of the market relative to two barriers. Asians compare the last tick with the average value over the trade. Digits is based on the value of the last digit of the last tick relative to some criteria.

Lookbacks are based on the difference between the high or low value or the high or low value and the close value, with a multiplier, which the trader sets. The Reset Call/Reset Put trade type have a trade duration with a reset during the trade. Call Spread/Put Spread has an upper and lower barrier. High/Low Ticks lets the trader set a tick which is to be higher or lowest within 5 ticks. Only Ups/Only Downs looks for successive rises or falls in value.

What is the payout ?

If the trade is successful, it pays out. This payout can vary depending on the trade type and depends on the payout rate, which is given underneath the purchase button on SmartTrader. Some trade types have higher maximum payout rates than others and can vary from less than 100% to above 1000%. The trader receives the traded sum plus this percentage of it back, if the trade is successful. If the trade is not successful, then the trader loses the traded sum. In general, the higher the payout, the less chance the trade will be successful. Most of the trade types have a maximum payout of $50,000, except for Digits which have a maximum payout of $30,000. Lookbacks have a different way of calculating the payout as it is the multiplier times the difference between the values specified by the trade types, but the maximum multiplier is 1000.

Because the maximum trade size is determined by the maximum payout for a trade, then the riskier trades with higher payout rates will require a lower stake size. Conversely trades with lower payout rates can have a larger stake. To give an example of a trade offering a payout of $5,000, the trader would be risking $2,500 on a trade with a 100% payout rate to get this payout. The reason the stake is 50% of the payout in this example is because the payout consists of the stake plus the percentage of it specified by the payout rate, i.e. $2,500 + ($2,500 x 100%). For a trade with 1000% payout rate and a payout of $5,000, the stake is lowered to $250.

Why trade with Binary.com ?

Binary.com allows the trader to speculate on simulated markets, where the trader can pick the level of volatility. It is possible to speculate on short term time frames, where the trade ends in frames as small as 1 tick and longer term. Traders can trade on the relatively user friendly Smart Trader and switch from demo to real account at any time. The minimum trade size can be very low as is the minimum deposit. Traders who wish to speculate on these simulated markets with larger sums can also do so. The maximum payout can vary, but for most trade types it is $50,000 (the maximum trade size is determined by what the payout could be). As simulated markets are not real markets, they can be traded 24/7.

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