Boundary Options Made Simple | Binary Options Trading Strategies
Boundary Options Made Simple
Boundary Options are a slightly advanced, but immensely important addition to any binary options trader’s arsenal.
If you’ve ever traded forex or just simple high/low or put/call binary options, you’ll have come to a point several times where you just didn’t know where the market is headed next.
In such situations, because you weren’t trading boundary options, you would have done one of these things:
- Stayed out of the market (never a bad thing if you’re unsure)
- Went in “50/50” minded and potentially lost the trade
- Went in anyway and lost the trade
- Traded LONG only to see the price crash SHORT
- Traded SHORT only to see the price spike LONG
Boundary Options solve this problem.
A boundary option is a special type of trading instrument, specifically designed for when you:
- Are expecting a medium to large breakout
- Don’t know which direction it will head in
- Are trading a volatile currency pair, stock, commodity or index
- Expecting an economic news release such as the NFP to send the market soaring LONG or crashing SHORT
- Expecting price to trend sideways for some time
You’re probably thinking: “well, doesn’t that just cover every possible scenario?”
Yes it does, and that’s the beauty of it!
There are TWO types of Boundary Options: IN and OUT.
IN – for when you are expecting the market to trend SIDEWAYS
OUT – for when you are expecting the market to breakout STRONGLY
The following video (amazing trading tutorial by the way) demonstrates how to use OUT boundaries successfully:
The great thing about Boundaries is that they can be used to replace standard High/Low trading when the market presents a trader with more uncertainty than usual.
Under normal conditions, traders would simply either stay out, or not care if they are aggressive types and go straight in guns blazing.
Both those acts have their pros and cons. Traders who stay out save potential losses, but also miss potential gains. Traders who go in guns blazing, meet potential losses but also potential gains.
Boundary Options are a great way to reduce the number of things you worry about in terms of “which direction to take”.
If you’re expecting aggresive volatility soon, OUT boundaries present good trading opportunities as they are designed for trading breakouts.
If you’re expecting a snail-paced crawl sideways, IN boundaries present good trading opportunities as they are designed for slow, sideways conditions.
And remember – always make sure you choose a safe, trustworthy broker with independently verified reviews, like our independently certified binary international reviews here.