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Friday, 18 April 2014

60 Seconds Trade Using the "Breakout Strategy"

If a currency pair has been trading for some time within a tight range, then when it does breakout it usually progresses in its new direction for some time.

Trader Level: Beginner
Risk Level: Low
 To get started, kindly sign up for a trading platform using the recommended broker below:



In the Breakout Strategy you are looking for a currency pair that has been trading within a tight trading range for an extensive time period.

A trading range is clearly delineated by a ceiling and a floor, the ceiling being the highest price that the asset trades within the trading range and the floor being the lowest price. When the price bounces against its ceiling or floor a number of times at some point it finally breaks

Below is a graphical illustration of a Trading Range


A clean breakout should consequently be viewed as a strong signal to initiate a 60 Second Binary Options trade. If the breakout occurs below the floor initiate a Put option; if the breakout occurs above the ceiling initiate a Call option.

Below is a graphical illustration of a clean breakout:







Wednesday, 2 April 2014

Use Hedging To Manipulate the Market and Make More profit

Let us take a look at how to use binary option as a hedge. if you are closely monitoring your option during the period, there

may come a time where you see that your asset is almost certainly going to close in the money. Many traders are happy to just

wait it out and collect their profit, but others see this moment as a chance to hedge their investment and make even more

money.

For example:
you have bought a call or rise option on a particular contract or stock because you believe the price will go up during you option period.

when you are following your option closely, and you see that the contract or stock is indeed going up, and you still have few minutes left before your option is set to expire, you can either wait or you can choose to hedge you option.

The idea of hedging is to protect your original option.

if you choose to hedge, you will now buy a put or fall option at the new price on your contract or stock.
you now own two distinct binary optyion on the same contract or stock

There are now three possible outcome:

if the price still rise after you have purchased the put or fall option, you will be in the money on your call or rise option and out of the money on your put or fall option at the time of expiry, you will lose a small percentage, which is made up of the difference between the profit on the call and the loss on the put.

if the price drops below your original strike on the call or rise option, you are now in the money on the call. your loss is the same as mentioned above.

if the price falls from the strike price on your put option, but is still above the strike price of your call option then you have made a successful hedge.




your are in the money on both your orignal call option and your later put option and your profit from both investments.

the reason you deciede to hedge in thge first place in this scenario was to cover your losses in case the contract or stock price fell in the time still left in the call option. if that was the case, and the price did fall, the hedge helped you cover your losses

if it fell by only a bit, the hedge offered you the chance to increase your profits


note :
it is worth while to remind investors that heging only works if you are closely monitoring the progress of your option all

the way up to its expiry time