With all of the types of binary options trading, it can be difficult to know what type is best suited to you. Before you go and test the water to find which type is best for you, we break down the most common types available to you.
Trading Range Binary Options: range trading is also known as boundary trading, and is an in or out option. There are four possible outcomes with boundary option trading, and you can choose the one that you feel most comfortable trading with.
- Your trade may end outside the range- if the price action is outside of the selected price range when it expires.
- Your trade may end inside the range- if the price action is inside of the selected price boundary when it expires.
- Your trade may go outside the price range- this is when the trader needs the price action to breach the selected price range in order to profit from the trade. It gives the trader an opportunity to decide which trades are the best at that time.
- Your trade may stay between the price range- this means that the price action will not breach the boundaries at any
Deciding what range to use is the first step of the Omega Options range binary option trading. Range trading is efficient when the market is consolidating, so if its trading sideways. Whereas, a trending market sees prices rising and falling which makes it difficult (nearly impossible) to predict the floor or ceiling, thus inhibiting a trader’s ability to make a profit.
Utilizing an indicator is the most effective way to detect when the market is range bound, and it will show you the exact direction the market is heading. The Bollinger band uses a lower, middle, and upper band with the lower and uppers showing the price movements confines within a range bound market. This is just one indicator that you can use.
It’s up to you which of the four range binary trading options you choose, and you can set the expiry dates. You can set your expiry for a minimum of 7 days. Ensure that the consolidation period is going to exceed your expiry time frame. Using a daily chart will help you set your expiry date accurately.
Range binary option trading is not the only type of trading that you can approach with this strategy. It also works when you’re setting your price barrier to the downside or upside when the prices range well outside the ceiling and floor. This ensures that you can be sure the price action of your asset has no chance of approaching your price barriers. If you want to breach the price action boundaries that you can adjust those barriers to make it happen.