Calm, calm, no fluctuations. If you meditate on the beach, it's a good view. If you're looking at a market and looking for a trading trend, that's not so much.
Horizontal trading market is the curse of traders who want to ride the waves in the upstream or downward trend. Some traders are just looking for a different market to trade; some take a day off. But with the right strategy and trading tools, you can turn this flattening into leverage.
Suppose a market has been trading for some time in the $5 range. You think it's possible that it will stay within this range for the next hour.
If you want to buy low and sell high (as we always do), your ideal deal is to buy at the bottom of the $5 range and sell at the top. But even so, your maximum profit is $5.
That's good, but what happens if your potential risk in trading is $10?
Using binary options, you can get different ratios. Binary files have "all" or "none" designs, so the value at maturity is only $100 or $0. If your binary expires in currency (if you are a buyer, higher than the execution price), you will get $100 when it expires. If the underlying market is at or below the Execution Price at maturity, that means you have either money or no money, then you get zero.
This simple change will make a big difference. Now, your maximum profit is not $5, but $100 minus any fees you pay for the transaction.
In an upward market, the best buying strategy may be to buy a binary from the currency for less than $50 and look for an upward trend. You can wait until it matures to charge $100 for a return of more than 100% or a smaller profit ahead of time.
(In a declining market, you can do a similar transaction, sell a currency binary option, and let its value drop to zero. Short selling is as easy as buying in the binary option market.
However, in a flat market, you can use different strategies. You can buy a cash binary option. In most cases, you'll think twice before you move on, because a cash-strapped binary digit is cheaper and gains value in an upward trend, even if it doesn't expire in money. In addition, in a volatile market, you may have to pay a relatively high price for a binary currency, but only a few minutes later will you see its value decline in volatility.
But in a stable market, volatility is not a big problem. Your advantage is based on two factors:
- The market is not very volatile.
Assuming you pay $75 for a binary option, its execution price is much lower than the cross-section in the underlying market. It's a good deal. The market will have to break through this range and fall sharply before your dual currency devalues, which may be worthless.
As long as the market stays within this range (or anywhere higher than the Execution Price) until maturity, $75 will turn into $100. This is a better return than the bottom and top ranges between $5.
The absolute design of binary options is neither a trick nor an over-simplified method of trading. This is a way of introducing new risk/return leverage that allows traders to take advantage of time rather than volatility. With a free practice account, this flat marketing strategy is easy to learn and can work in any sleepy market.