One part of the binary options world that is starting to take off in popularity is the boundary trade. With these, you are given a range of prices and your job is to predict accurately whether or not the price will be within that range or outside of the range at the expiration time. This can be tricky, because the boundaries that you will be given can vary from trade to trade and from broker to broker. So what might be a good trade definition Choose widely. To be a successful boundary trader, you need a bit more in depth knowledge of the asset you are trading than if you were to just trade the traditional call/put binary options that you might be used to.
First, you have to figure out if the asset’s price will go up or down in the allotted amount of time. Then, you need to figure out how much it will move. This is doable, and it is things that people in other fields need to do when entering and exiting trades, but it’s a bit different in binary options and the stakes are a little higher. In binary trading, you do not have the same safeguards as you would if you were setting up something like a currency trade. If you were trading the USD/JPY pair, for example, you would want to have a clear cut idea of what a successful exit point should look like. All good traders do this to some extent; they want to know where the pair can perceivably and realistically go to. When the price reaches that point, they may or may not exit the position based upon past activity, but in an ideal sense, this is their goal.
The other difficulty that you’ll see with binary options is that it’s an all or nothing type of trade. Even if you are a pip off your prediction, you will still lose all of your risked amount. At least in other types of trading you can cut losses if the trade isn’t going your way. Trading with 24option you to end some of your long term trades early, but these are not widely used yet and there are always stipulations that you must follow. You will find that short term options do not allow this.
Don’t let these things dissuade you from trading boundary options. Instead, let them guide your trading in the right direction. Boundary trades can be very lucrative if big movement is on the horizon, especially if you can find a good deal on high yield boundary options. These can sometimes return 350 percent or more on your investment. They are tougher to hit, yes, but they are very worthwhile if you can execute them with success. Your selection of assets is limited in these trades, but if you can find something favorable, they are definitely tying up your money for a while. Even a 200 percent return is really good over a period of few hours. You will lose out on these more often than not if you try them regularly, so make sure when you are using high yield boundary trades you are always very selective in your commitment.