GWAZY – Crossbreeding Binary Options, Forex and Inquiring Minds
If you want to become a trader, all you have to do is chose your “weapon”: trade Forex, trade Options, trade Binary Options, trade Stocks or trade… Gwazy. Probably that last one raised some eyebrows, because I am almost sure most of you don’t know what it is. My colleague was visiting the IFX EXPO when he ran into this interesting boot called… Gwazy. He tried his best keeping his giggling sound quite… He couldn’t really understand if the joke is on him, or is it on GWAZY. The half tiger half lion logo made him curious, and very entertained. Than came another funny video, explaining how this marvelous crossbreeding of Binary Options and Forex actually works. Well, let me tell you, it’s just another gimmick, a very curious one, I must say. Hold your horses, or donkeys, and let’s find out more about it before we jump to any conclusions. Enjoy the video (:
Gwazaaap with Gwazy and How to Use It
This way of trading was recently introduced by Windsor Brokers Ltd, a Cyprus investment firm regulated by the CySEC and authorized and/or regulated by other authorities (such as the FCA). Windsor Brokers operates in the field of Forex and Binary Options and now they decided to mix the two. Is it a good idea? I don’t think so, but let them try, I might be wrong. Now, let’s get down to business: Gwazy is a simple platform which allows you to trade… how to put it… Foptions or Borex… I don’t know. What I do know is that you have to choose direction – Up or Down – and once you’ve done that, the Stop Loss and Take Profit levels are automatically set for you. These levels appear on the chart before you place the trade so you at least know what to expect. It’s a simplified form of trading Forex, Binary Options-style; and when I say Binary Options-style it’s because you don’t have the freedom to choose your own levels and the position sizing aspect is heavily modified to make it easier for newbies to jump into trading.
There are various types of return percentages which you can choose from: the lowest is 25% of your investment and it has an easy to achieve profit target of about 2-3 pips (your Take Profit is very close to current price). If you choose this Risk model and win the trade, you receive 25% of your investment and otherwise, you lose the entire sum risked on that trade. That is not a good deal, believe me. If you invest 100 bucks and win the trade, you win 25 bucks and you now have 125 in your pocket, but if you lose the trade, you lose the entire hundred dollars so you risk 100 to make 25. Does that sound right to you? Ok, there are other Risk models that go as high as 200% – invest 100 and potentially win another 200 – that’s better, of course, but the big difference is that your Take Profit level is much farther away and thus, much harder to achieve, while your Stop Loss remains the same. And speaking of Stop Loss: for most currency pairs it is placed about 4 pips away from current price. That’s another problem, because 4 pips are nothing when the market is volatile… in fact 4 pips are most of the time an invitation to lose money, not only when the market is volatile.
Gwazy Pros and Cons
According to the marketing material, learning to trade Gwazy is easy and takes only 10 minutes. I agree with that. Learning to use the platform takes about 10 minutes and both Forex and Binary Options traders will find similarities between their “weapon” of choice and Gwazy: the use of profit and stop loss levels comes from Forex and the fact that everything is served on a platter (choose direction, choose investment amount and trade) comes from Binaries. Easy for both types of traders – a plus I’d say. Now let’s talk about the time factor: sometimes Binary Options traders struggle with choosing the right expiry time and an extra 15 minutes can make the difference between a profitable trade and a losing one. Well, by trading Gwazy, you won’t have this problem anymore because time is not a factor – price either hits the Stop Loss or the Take Profit and it doesn’t matter if it takes one minute, five minutes or 3 months. Got rid of the time factor – another plus. Ok, enough about the pros, let’s think about that joke of a Stop Loss: 4 pips… come on that’s not nearly enough. Let’s think about Binary Options: price can go against my position 10, 50, 100 pips, it doesn’t matter because I am still in that trade until time expires and I still have a chance of winning it if price returns in my favor. I am not stopped out by a 4 pip stop loss. And what about the idea of making 25% while risking 100%… that’s just wrong. Comparing again with Binaries, my average win is 75% and to achieve that, I only need price to be 0.1 pips in my favor at expiry time. Much better than Gwazy I’d say.
The Quasi GWAZY Conclusion
This new trading style may be appealing to some, but honestly I don’t see it taking off and becoming something as big as Binary Options and of course, it will never be comparable to Forex. There is still room for improvement so we must give it some time; maybe other brokers will adopt this Gwazy stuff and inevitably some extra features will be added, but at the moment it looks like something I would try for fun, not a way of generating a steady stream of income. Sure I might be wrong, but hey, it’s a quasi conclusion…