Far more about Binary Trading options
In just about any given week there are tons of economic news reports here in the us and abroad. This provides you many opportunities a week to capitalize on them. We've jobs number in lots of countries as well as retail sales, confidence numbers, monetary policy statements, Nadex review, manufacturing numbers etc...
So if you have major economies just like the U.S., Japan, Europe, Australia being released at different times during the day and night and within the week it allows us many chances to make the most of these opportunities. I have traded futures and forex for a while. I am aware its tough to trade news, sometimes you decide on right but maybe get stopped out because timing was off and then see it go the way you were originally trading it, that is frustrating. Or even see it move sky saturated in the first direction and prevent you out and now you can determine where to enter again and then you definitely enter and get stopped out again and then see it continue on your original decision. Some things you'd not consider trading during news times because either this indicates dangerous or your scared of spreads going crazy or frozen systems etc..
Well Binary options are the answer. Now what exactly I'm about to mention are not fit for all, and by no means are recommendations, you should do what fits your trading personality and whats in your trading plan. I prefer to fade big spikes on news myself but that could get stressful when trading the particular product. When I stumbled into Binaries years ago I consequently found out simply how much better I can perform that. Element of it is instinct that comes into play time and knowing how the merchandise you are trading moves. Lets say we are trading binary options on the SP500 we are waiting on the unemployment rate.
We are expectant of 10% then 9.5% is available in as the particular number. What are the results? Well a very important factor I look at is wow we beat the number by a big margin so the market is really planning to want it! So the market could be at 1100 even right before the number, then all an immediate we start jamming up. Then I look, OK we just jammed up 20 points and we are now at 1120 even.
So I start thinking this may be an over reaction, sure it came in definitely better then expected, but the market has been up big in the past few months and 9.5% is still almost double what's the conventional so in fact it is not great. As traders start to appreciate this might start coming down. So I go through the strikes and decide what type of risk I wish to take. Now I don't want to take much. So I try to find an option that it out from the money say I go through the 1115 strike thinking it might come back off to that area. So I go through the price and it might be trading at 70 bid by 75 offer. So I short it at 70. Which means my risk is where it can expire if I'm wrong which just like all binaries is at 100. So 100-70 is 30. I'm risking 30 points maximum if I'm wrong. But I could always take out if I actually do nothing like it at any price if it hits 80 I can purchase it back and only lose 10 points. Therefore the expiration is really a catastrophe stop. But when it appears like I'm wrong or I see a routine that may negate the trade I will require out. So I shorted at 70 now my possible max profit is 70 points. Which is a great reward to risk, my reward is 70 when risk is 30.
Now If I held to expiration and the market closed at 1114.99 I profit on the trade the total 70 points, I only need it one tick below my strike to make the most of full profit. But on this sort of trade I'm really seeking to get in and from an overreaction.
So the market moves down over time to 1116, still out from the money by 1 point. If I allow it to expire here I lose, nevertheless now the price has dropped because we were out from the money by 5 points and now we are only out from the money 1, so the brand new price is 25 bid by 30 offer, so I buy it back at 30. I make 40 points on the trade and I'm done, no this trade may go long ago around 1125 and be way out from the money and if I held till expiration I might have lost, but the great thing about Nadex review is I could trade in and out of the, with limited risk and great profit potential.