Trading on the weekends: Trading Over-The-Counter
Forex and other similar financial markets that offer funds and currency pairs are only open on weekdays. Therefore, traders’ schedules mirror those of most other professionals, Monday to Friday. That being said, there is a different type of online trading platform that allows you to trade not only at night but on weekends and holidays as well. Moreover, trading isn’t limited to cryptocurrencies, you can also trade standard currency pairs including the EUR/USD.
However, you will encounter the “OTC” prefix in rates. In this article, we will explain what Over-The-Counter trading is and what its benefits are.
What is OTC trading
This abbreviation stands for “Over-The-Counter trading”. This gets to the essence of the question. Classical trading is carried out on currency pairs that are the rate sources for isolated platforms (including online platforms). Trading OTC follows a different set of rules. Trades are placed directly between sellers and buyers, cutting out the middleman.
There are a number of popular platforms for Over-The-Counter trading. They are based in many countries. OTC platforms set asset rates for private companies, for example, Binomo, as well as others. In turn, they provide anyone who desires that opportunity to trade. No preparation is required to start trading on an online platform. All you need to do is register on the site.
The advantages of trading over the weekend
One of the notable benefits is that you have access to OTC assets on Saturdays and Sundays. This enables you to trade productively on Saturdays, Sundays, and during holidays. However, the “true” value of this debatable. There are drawbacks as well that we will go into later. That being said, in all, there is little difference between the “EUR/USD (OTC)” and the normal “EUR/USD”. If you were to evaluate the charts side by side, the difference would be negligible.
For the majority of traders, especially beginners, binary options trading is either hobby or an additional source of income. Meaning that they need to find a time to trade that doesn’t interfere with their day job. Such traders have two options, either trade at night or trade over the weekend. The later tends to be preferred as people tend to be worn out after work and this has a negative effect on trading. You need to be able to devote your complete attention to trade, as well as make clear decisions.
There is another benefit of trading Over-The-Counter, there is a relatively high-profit percentage. In general, this indicator is several percentages higher than on weekdays. For example, on Binomo (open demo) OTC asset often produce 85-89% profit, while typical assets produce on average 70 to 85 percent. However, this depends on the conditions provided by the specific online trading platform.
The disadvantages of OTC trading
First off, the list of assets available over weekends is significantly shorter than those available on weekdays. Usually, it is 3-5 currency pairs. These numbers include the most popular assets, so the majority of traders are satisfied. However, if you trade some exotic combination it won’t be available on the weekends.
The second issue is that the assets are entirely isolated from fundamental factors. To put it simply, if you don’t use technical analysis, then you won’t be able to generate any kind of forecast. Trading over the weekends exclusively limits you to technical analysis. Fundamental analysis and trading the news aren’t applicable.
For a complete picture, it is important to point out another drawback for skeptics. Unlike normal rates that are transmitted throughout the world and can be found from many sources, there is no way to completely verify the course of OTC assets. In theory, this allows companies to “influence” charts at key points. The being said, in all fairness, it is worth mentioning that none of the top companies, including Binomo, have ever committed fraudulent acts of this kind. And it is very unlikely that they would risk their FMRRC licenses for momentary financial gain. The scale is too small, considering that there are tens of thousands of users, even hundreds of thousands in some cases, on these platforms. A good reputation is worth more. That is why it is important to only trade with licensed companies with hard-earned reputations.
Over-The-Counter (OTC) trading is a great opportunity to trade over the weekends, fully rested and ready to go. Although you can only use technical analysis to forecast the market, as it isn’t possible to trade the news. However, this can also be seen as a benefit, as rates are only influenced by the rules of market price evaluation, not fundamental economic factors such as political decisions. The most major companies offer OTC options. Binomo, as one of the leaders in the field, is included amongst their ranks. Binomo has a good reputation and offers lucrative trading terms.