Binary trading over the last 2-3 weeks has been difficult on conservative investors. As commodity market have barely moved and the US stock indices unable to regain their upward momentum, finding solid trading signals has been problematic. Most traders prefer waiting for a technical support or resistance line to be broken prior to entering a trade as this would constitute the most rational entry point into a trade. However, with a lack of movement in major markets, we have started recommending range binary options. Now these option types are a bit more complicated than standard vanilla call/put options or even binary options. In the case of a range digital option, a trader needs to gauge whether the market in question will remain within a specific range over at the expiry time.
When looking at the current market dynamics where the Dow and other US stock indices again fell, this may make sense. Unfortunately, trading range digital options is very risky. On the other hand, our recommendation for a range binary option on the EUR/USD from yesterday was 100% correct and yielded a 500% profit ! That’s the glory of trading range options. The inevitable downside of trading them is the fact that you will usually get this trade wrong and this leaves you in a situation where you need to recoup losses in a trading account, a very unenviable position. So we recommend using rang digital options only in the case where you are trading with profits.
Today for example the EUR/USD is still within its range. It closed at 1.3141 meaning your binary trade was safe. Although price action on the forex pair reached as high as 1.3165, it wasn’t able to gain any momentum, leaving binary traders’ range trade in place and making 500% in the process. Admittedly, and according to our own advice, we took an Above option when 1.3155 was reached, and we lost on the trade. But the net profit on the Range trade was much bigger than our small loss so it was a good day for binary forex trading. Today, we don’t recommend any trading on the forex pair as binary trading while the currency is nearly on top of the resistance is a slight mistake. Unless you are willing to hold off on any above options until after 1.3165 is broken. If you are patient, then it can be a solid trade.
Apple at 609.5 is providing a strong buy signal and as such, binary stock trading could be very profitable if you take an Above option when the level breaks. As always, use the RSI and MACD to gauge momentum in the market. If they are both pointing higher, see if the Volume in the APPL stock is rising higher as well. To do this, use a binary options graph on no higher than a 4 hour chart.
No news in the US today will mean that binary traders can focus on technical analysis and not macro economic events as none are slated for release today