Binary options range
There are 2 major market conditions you will see as a trader. The market is either moving in a trend or moving in a range. In fact, there is no other way the market can moves besides this.
In order for you to make money consistently in binary trading, you must have a binary options strategy that can help you to trade the trend and another strategy to help you trade the range.
Therefore in this post, I am going to share with you how you can trade the ranging market. One of the best way to trade the ranging market is to use trend channel. Whenever you see that the price is moving sideways, you should start to draw the upper and lower trend line of the range. When the price hits the lower trend line, there is a high chance that the price is going to move up.
Therefore you will start to look for opportunity to enter a HIGH option. When the price hits the higher trend line, there is a high chance that the price is going to move down.
Where the trader needs the price action of the currency to breach the selected price boundaries just once to make a profit from the trade. This gives the binary options trader ample opportunity to decide which trade is best for him at that point in time. The first step in using this trading strategy is to decide on the range to use.
Range trading works best when the market is consolidating or in other words, when the market is trading sideways and not trending. The best way to detect a range-bound market is to use an indicator that shows you exactly in what direction the market is trading. One such indicator is the Bollinger band. Invented by John Bollinger, the Bollinger band has a lower band, a middle band and an upper band.
The upper and lower bands show the confines of price movement in a consolidating market. Take a look at the chart below to see the illustration:. The Bollinger bands reveal the range of prices between the price floor and price ceiling.
Once you have something like this showing on your charts, use your horizontal line tool to trace two lines as shown. You now effectively have the 2 strike prices you need for your boundary trade. You can now decide on which of the four boundary trade option contract types to purchase, and set relevant expiry dates.