Binary options trading is popular because of how simple it is. There are only two outcomes: you make a predetermined profit or lose the money you invested. There is no middle ground. This simplicity attracts inexperienced traders since it lets you know exactly how much you’ll gain or lose.
The high/low binary trading option has fixed payouts and risks. You know what you’ll be rewarded, so your trading decisions wouldn’t be a point of concern even though you cannot monitor the trade closely.
Binary options have since expanded from the high/low model, though. There are more complex options today. But they have a higher payout since winning trades tends to be harder. If you’re planning to participate in this market, it’s best to know your different options. Read on to learn more about them.
Touch trading works a little differently than its High/Low counterpart. Instead of asking whether the X asset would reach a specific amount or not, you’ll have to decide if it will ‘touch’ the strike price at least once during a given period. You'll gain profit if it does, and you’re working with the one-touch option.
Meanwhile, no-touch trades should be made if you think that a given asset would not be able to reach it.
The strike price or trigger point could be located on any part of the chart. Usually, the further away from the current price level, the higher the potential earning is since it’s harder to achieve. It’s not unheard of to earn 300% to 500% of what you’ve invested due to the greater risk involved.
If you want to take it to another level, you can try double touch options. They’re like the one-touch option, except you’ll have two strike prices. Here, the asset should touch two different levels for you to gain profit.
With a range trade, you’re essentially making a double no-touch trade. For this type of binary option, you’re essentially stating that the price of the asset would stay within a specific range, which is bounded by two strike points. The upper and lower limits are determined by resistance and support.
If it stays within the designated range for the entire trade period, you’ll win. This option is so attractive because it creates the potential for profit even in flat markets where volatility is low. It’s a unique opportunity because instead of hoping for rates to move up, you’ll want them to stay as they are.
This works similar to the high/low and one-touch options, except this time, you’re only given one minute for the trade. Many experienced traders hesitate with this since it is extremely difficult to predict the price movement in a short time. Some might even agree that it’s more like betting than trading.
You might think that this risk would mean more profit, but it doesn’t. The reward you’ll get is almost the same as that you’ll gain with a typical high/low trade. Nevertheless, 60-second trades have become more popular recently.
On the other side of the spectrum lies long-term trades. This option features expiry times that can last for days, weeks or months. You can find a variety of expiry times available depending on your preferred timeline. It might be easier to predict price movement with these lenient time frames.
It might not be attractive to new traders with no prior trading background since profit gain can be much slower. However, it can help you avoid losses since you’ll be able to correct mistakes as time goes by.
Work with a Reputable Broker
Unlike other financial instruments, binary options trading is more straightforward. There are still a number of pitfalls you might encounter, though. One would be falling for fraudulent brokers whose primary purpose is to scam people out of their money. Play smart and avoid being a victim by looking for legitimate brokers through proper research.
Trusted Options is one of the most trusted brokers for binary options trading. We offer an easy-to-use platform where you can execute trades and withdraw your earnings immediately. Learn more about our services by getting in touch. You can reach us at +1 (888) 901-5028 or Support@TrustedOptions.com.