Binary Option Trading Type

Strategic Binary Trade Types: 

These  types  of trade  form the ‘core’ of all our  fixed odds  trading  strategies  including  the ones detailed in this guide. The strategic trade types are as follows:

 

 

 

1. Rise/Fall  

2. Higher/Lower

3. Touch/No Touch

4. In/Out

NOTE:   Rise/Fall  trades  are  no  different  to  Higher/Lower  trades  (if  you specify “than the current spot” as 0 (zero) when placing a Higher/Lower trade). Additionally,  for  Rise/Fall trades you can specify a timeframe less than 5 minutes, but we see no reason why anyone
would  want  to  do  this,  as  part  of  a  well  thought  out  trading  strategy. So  for  Rise/Fall functionality see the Higher/Lower trade type definition

 Higher/Lower

Concept:  This is a bet that an instrument will close above/below a specified price at the end of a specified period of time. “Higher” or “Lower” is specified when placing the trade. If the market price is above the specified price (for a “Higher” bet type) at the end of the specified period, the bet will be won. If it is below the specified price, then the bet will be lost. “Higher” bet type shown in example above. For a “Lower” bet type, the bet will be won if the market price is below the specified price at the end of the specified period. If it is above the specified price, then the bet will be lost. In  both  instances,  it  does  not  matter  what  the  price does  during  the  specified period. All that is important, is where the price is at the end of the specified period.

Example:  The USD/CAD has rallied strongly but you expect the price action to top out in the next few days. You use the “Lower” bet type with a price, of say 100 pips, below the current market  price  and  a  duration  of  7  days. The  market  moves  down. Provided  it  is  lower  than the specified level at the end of the specified period, you win.

Our View:  The Higher/Lower bet type can be used when you feel strongly that the market is heading in a particular direction.

 

Touch/No Touch

Concept:  This  is  a  bet  that  an  instrument  will  touch/not  touch  a  specified  price  during  a specified period of time. “Touch” or “No Touch” is specified when placing the trade. If the market price touches the specified price (for a “Touch” bet typ
e) during the specified period, the  bet  will  be  won. If  it  is  does  not  touch  the  specified  price  then  the  bet  will  be lost. For a “No Touch” bet type, the bet will be won if the market  price  does  not  touch  the specified price during the specified period. If it does touch the specified price, then the bet will be lost. “No Touch” bet type shown in example above.

Example:  EUR/USD  has  reached  record  highs  at  1.5000  and  you  expect  its
gains  to consolidate  in  the  near  term. At its all time high, you place a “No Touch” trade at 1.5200 within  the  next  5  days. Provided  the  EUR/USD  consolidates, does  not  move  higher  and  it does not touch this level before expiry, you win.

Our View:  We particularly like the Touch and No Touch bet types as they allow us to predict general  levels  that  the  market  may  or  may  not  touch. Depending  on  our  trade  setup  and fundamental  view,  we  can  adjust  the  levels  to  our  liking  for  the  optimum  return  or  move those levels to reduce our return for a greater safety barrier.

 

                                                  In/Out

 Concept:  This is a “boundary” bet, where two price levels (a high and a low) are specified. It is  a  bet  that  an  instrument  will  either  stay  within  a  specific  boundary  or  will  breach  the boundary. If during the specified period, the market price does not touch either of the specified prices (for an “In” bet type), the bet will be won. If  it  touches  either  of the  specified  prices,  then the bet will be lost. For an “Out” bet type, the bet will be won if the market price touches both of the specified
prices  during  the  specified  period. If  neither  of  the  prices  or  just  one  of  the  prices  is touched, then the bet will be lost.

Example:  The  EUR/GBP  pair  is  at  0.8950  and  has  been  trading  in  a  range  for  the  last  two weeks. You expect this to continue in the near future and place an “In” trade, that it will not hit either 0.9150 or 0.8720 over the next 7 days.

Our View:  The “In” bet type is ideal for trading during periods when the markets are quiet and/or in consolidation. The “Out” bet type could be used for periods of high volatility, but to date we have not found much practical use for it, preferring to choose a direction and use the “Touch” bet type instead.