Binary Option In-Out Boundary Strategy

Binary Option In-Out Boundary Strategy

Submitted by adil on Mon, 02/10/2014 - 11:16

The In/Out Boundary Trade is one of the most commonly used strategies in binary options trading. The trade consists of two strike prices that collectively make upper and lower price boundaries or limits just like a ceiling and a floor. However, it is not easy to use this strategy as traders have to understand so many things to deploy these trades effectively and successfully.

Binary Options Trading Types to Trade:

The first and foremost question is that what types of binary option trades are suitable for this particular strategy. In this regard, the best option is to choose the Goes Outside trade subtype of boundary trade especially for binary options.

Which Rules to Follow:

The price limits or boundaries work very similar to trend lines. Therefore, it makes it easier for traders to use automatic pivot calculators to define trend lines. The daily pivot calculator is used in the case of boundary trade. However, the pivots must have served as a short term resistance or support in order to become reference points in this particular type of trading. The traders have to ensure this otherwise his chances of failure will increase manifold. This is because the asset will very likely touch the recent high or low again if it has already done so. On the other hand, it might not achieve the price areas that have never been touched in recent days.

Trade Setup:

Traders can use many strategies for boundary trading. However, in the most popular strategy, traders try to accurately predict that an asset will touch either of the upper or lower boundaries at least once before the trade comes to an end. That is exactly why the Goes Outside trade option is preferred in boundary contract trading.

An asset will start trending despite of how much boundary bound it is due to the unavoidable market circumstances. This will definitely help the asset to break out of trend lines or price boundaries. The Automatic Pivot Calculator or Daily Calculator is the only indicator traders can use to identify and counter such occurrences.  

• Step 1:

First of all, you need to identify the current range bound positions of the price. Traders usually create consolidated trade areas by holding out in anticipation of some news when a big market event is about or expected to happen in a few days’ time.

• Step 2:

The next steps is to identify those two pivot points which the price has attained by touching the upper and lower price boundary ranges in past few days.

• Step 3:

Finally, you need to choose the Goes Outside trade option on the platform you are using. Subsequently, you will use the identified pivots as the price limits for your trade. As a rule of thumb, traders usually use only those price pivots as the price boundaries that the price has at least touched recently and are closest to each other. 

Setting Expiry Times:

Traders should give enough time to asset so that it can break out of these boundaries in order to make the trade successful. Therefore, the expiry time for these sorts of trades should at least be 7 days.