Know Boundary Trading in Binary Options.
In binary options, you can take advantage of various market conditions both when trending and ranging. Technical or fundamental analysis is not the only tool that can be used to help you take advantage of differences in market conditions. Boundary options are one type of special trading that can be relied on in sideways market situations.
Boundary trading, or also known as range trading, is a type of option that allows you to estimate whether the price will remain or move out of the upper and lower limits of the price. Because the possibility of in-the-money is higher than other types of trading, not all brokers provide this type of trading. You can have a higher chance of success with boundary trading, because the target price is determined to be more flexible compared to high / low and touch trading in binary options. The "in" option is placed on the basis of an analysis that the price will be in the upper price limit and the lower price (range) before the expiry time arrives.
While the "out" option will instead provide a wider selection of price targets, because your trading will end in-the-money as long as the price is not in the range when your option is exposed. However, this option tends to be more profitable if you believe there will be a price increase. Therefore, the "in" option can be chosen when the market is sideways, while options "out" can be determined to anticipate a market that is experiencing high volatility.
Like other types of options, limit trading also has different conditions depending on the broker that provides it. Therefore, it is very important for you to know the various types and features of limit trading. This type of option is called by calculating whether the price will remain in or move out of range. There are brokers who have provided this range, but there are also brokers who issue traders to determine their own desired price. Terms of trade restrictions such as High Yield Boundary and "stay between / goes outside" which we will discuss one by one in the description below.
Kisaran In Trading Boundary: Are From Brokers Or Determine Yourself? Brokers generally have comprehensive provisions for each type of trade that is rewarded, where for the level level of prices determined by the broker or which the trader can choose, which applies to all types of trades provided.
For those of you who do not want to bother determining the price range can choose to trade at brokers who have determined the target range.
Actually, giving a price limit by brokers does not limit your freedom to make choices. There is still an "out" option if your analysis proves that the price will not be within the price range provided by the broker. In the example above, you will gain profit if the price can move out of range when expiry time runs out. With the restrictions of this broker, your trading strategy will also be more focused on the range-range that has been given, and just choose whether the range will be able to limit the price movement ("in") or even the price will move out beyond this limit ("out" ").
Conversely, there are also brokers who always provide options for traders to determine the desired price target. Binary.com which provides a special column to set high / low levels and price targets for touch / no touch is one example of brokers who are consistent in providing this freedom. At boundary trading, Binary.com also allows traders to set their own price range. This type will certainly be very suitable for those of you who have their own analysis to determine the range. Although a bit demanding specifications, but the results of the trading options that will come out will be more able to be accounted for psychologically, because you alone govern all aspects in this option position.
High Yield Boundaries Offer Profits Up to Hundreds of Percent Boundary trading is also modified into one type of High Yield Options that always gives a fantastic percentage of profit. Like High Yield Touch, High Yield Boundary also has profit returns of up to hundreds of percent. However, this type of option is also traded with a higher risk.
The main principle in High Yield Boundary is, the narrower the range that is set, the greater the return profit that will be obtained. Of course the narrow range will also minimize your trading opportunities, because the time and type of instruments given are less, and the specified range is usually narrower. However, you can use this method to the fullest and safer if you have a proven trading system. For those of you who are just starting out at binary options, practicing on an ordinary trading boundary will be able to improve your ability to trade in this type of High Yield.
Other Variations of Binary Options Boundary Trading Not only can it be applied by estimating the price position of the specified range, the boundary trading also has several types of trading that vary from price movements before expiry time arrives. The following points will help you understand the variations of this trading boundary.
The option "stays between" in the trading boundary is determined by estimating whether the price will move within the price range as long as your option period is valid (before expiry time).
The option "goes outside" will end in-the-money if the price can move out of range as long as the option runs.
One of the binary options brokers that provides a variety of boundary trading is Binary.com. However, this broker does not provide return profit on the type of trading "goes outside".
Not all brokers give the same choice as Binary.com. Therefore, you need to really understand the provisions of the types of options provided by the broker of your choice.
How to Analyze Binary Options Boundary Trading Even if it is only to determine whether the price will stay or just out of the specified range, you still need a deep trading analysis if you want to get profit with this type of trading. Whether it's technical or fundamental, you should prepare a mature and well-planned trading strategy. The following method will provide an overview that you can make as a preparation before choosing the type of trading boundary in binary options:
Technical Analysis One technical indicator that will be very useful in finding the right range is Bollinger Bands. You can use this volatility indicator, especially when the Bollinger Bands channels tend to move flat. Consider the following example graph:
In this example, it can be seen that the top and bottom channels displayed by Bollinger Bands when sideways prices can be the upper and lower range for boundary trading. In addition, there are also support and resistance lines that can be obtained from the Fibonacci retracement and pivot points to determine the right price range.
Fundamental Analysis Even though sideways often occur in price movements, there are times when prices respond to news releases that display results beyond expectations, thus creating new trends after they had ranged for a while. It will be very dangerous if you place the option incorrectly and expiry time.
Therefore, knowing the fundamental side of an instrument will greatly affect your chances of success in this type of trading. You can learn what data can affect the price movements of the instruments that you are trading. Knowing the right time to avoid price hikes due to data release is also necessary to anticipate the error of options placed on the boundary trading. You can know it all through the economic calendar provided by many financial sites today.