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Types of Binary Bets: High/Low. The High/Low binary bet is a binary options trade in which the trader purchases a call option if he believes the price will be above the strike price or purchases a put option if he thinks the work will end up below the strike price on expiration.

To execute a High/Low binary trade, the trader must do the following (Types of Binary Bets: High/Low):

–        Determine the asset he wants to trade.

–        Determine the strike price that will be used as the trade benchmark.

–         Choose a trade direction (“call” if he believes the price will end above the strike price and “put” if he believes the trade will end below the strike price).

–        Choose an expiration date.

–        Pull the trigger.

Types of Binary Bets: High/Low

Again this seems easy, but ensuring that the actual trade ends in profit is not as easy. As we mentioned in one of our previous articles, some Binary Options brokers will only allow a minimum expiry of at least seven days, making it more challenging to ascertain the price’s behavior. The image below is a snapshot of a typical

Types of Binary Bets: High/Low

For example, the market price is 1.30208 for EUR/USD. This trade aims to predict if the cost of the EUR/USD will be higher or lower than this price at the expiration of the work. Therefore, the first step here will be for the trader to analyze, and then select his chosen price direction (High or Low).

Once any of these buttons is clicked, the selection will be highlighted, and the trader can enter his staked amount, which in this example, is $100. The expected payout of this trade is 80%. So if the trader makes a profit (if he is “in the money”), he will be paid $80 + his original $100 to make $180. If he loses the trade, he loses his $100.

On the right is a chart for the EUR/USD, which the trader can use to visualize his trading. Unfortunately, many brokers do not offer chart tools on their platforms, making it challenging to analyze the charts.

How can you successfully trade the High/Low trade as a binary options trader?

Some analysts advocate using news releases to trade this type of binary option, but the truth is that this is not practicable for several reasons. First, you can only use this on broker platforms that allow expiration days between 3 hours and three days, as this is when the news effect is most potent.

Types of Binary Bets: High/Low

Attempting to use news events outside this time frame is unreliable. Even when you are allowed to use shorter expiry deadlines, the bet prices would have been adjusted so much that the payouts would be much smaller when compared to the staked amounts. Aiming for a risk-reward ratio of 1:1 is preferable. Trades with more risk than reward are not very desirable.

Types of Binary Bets: High/Low

That leaves us with the option of using technical analysis. The logic is to use strategies that determine price action, such as chart patterns. For example, if I were to trade a “High” binary, I would look for bullish reversal candlesticks or bullish patterns such as double tops or ascending triangles. Conversely, I would use bearish reversal patterns or triangles if I put my money on a “Low” binary.

Types of Binary Bets: High/Low

With this in mind, the trader should download the trading platforms of brokers offering forex, crude oil, spot metals, and index futures on the same platform and use the charts to analyze. This adds more certainty to the trades.

Many traders are usually tempted to gamble on the High/Low trades. But, like in other financial markets, there is no place for a hunch trade. You cannot allow your money to run on the uncertainty of hunch trades. Instead, use strategies that will tell you where an asset is heading, and then you will know if the support will end up as a “High” or a “Low.”

Types of Binary Bets: High/Low