Binary options’ range trading strategy is one of the simplest strategies. Almost any trader can understand its essence quickly and start applying it in the binary options’ trading. The main point of this strategy lies in a fact that a trader, who trades in the certain price range, expects that a price won’t become higher or lower than the certain level. In other words, the price will stay within the sideways movement for some time.
In order to trade according to this strategy, a trader can use our binary options’ chart. If he assumes, that the price will move within the certain price range, he can define its boundaries using lines. It is quite possible that these lines won’t be parallel with each other. For example, the triangle pattern can appear on a chart. And it is not necessary to wait until it works off, you can try to trade within the range of this triangle.
After a trader has come up with the trading range, he can start trading. As already mentioned above, a trader has to apply this strategy only when he is sure that the price won’t exceed the range’s bounds. Therefore, it will conduct slight ascending and descending movement within the range. A trader can buy the Call option when the price reaches the bottom range’s bound and the Put option when the price reaches the top range’s bound.
The following situation can be cited as an example. For example, a trader has chosen the USD/JPY currency pair for his binary options’ trading. On the picture we can see one of the range’s section in which the binary options’ range trading strategy can be used.
On the screenshot it can be seen that the trading tool’s price is oscillating between 99.000 and 99.300 levels. This situation can be used by a trader in the binary options’ trading. To do this, a trader has to buy the Call options when the price reaches bottom bound and buy the Put options when the price reaches the top bound. Nevertheless, it is important to understand that any range movement will end sooner or later. After this, usually, the strong momentum market’s movements in the one direction occur. For this reason, a trader has to not only know how to define the trading range, which can bring him a profit, but also to predict situations, when the market can suddenly exceed the range.
For example, it can occur before or during the publication of the important macroeconomic data or speeches of the central bank’s heads. Few hours before the publication, the price can stay within the certain range because the market players can’t determine the market movement’s direction, expecting a strong driver. By the way, this can be the time for the beginning of the triangle’s formation. It is recommended to end trading with this strategy in a half and hour’s time before the news issuance and start applying another binary options’ News trading strategy.
As you can see from the above mentioned, the binary options’ range trading strategy is pretty profitable. In order to make it signalizing more clearly, you can use the additional indicators, for example, the Volume indicator.
You can use this or other binary options’ trading strategies in order to improve your chances for the successful trading.