Best Binary Options: High low options

High Low Options

High Low Options Explained

The High/Low binary options contract is the flagship binary options contract. Whether it is known as the Call/Put, Above/Below or Up/Down binary options contract, the contract stipulation is the same: the trader aims for a payout based on the correct prediction of whether the asset will end the trade above or below the strike price set for the trade. The strike price is usually the market price on trade entry, though a few platforms may allow the trader to set a different price level as the strike price.

Trade Variants

There aren’t many variants of the High/Low trade type. On the BOM platform, there is a variant known as the Rise/Fall trade, which uses the market price as the strike price for the trade as well as a Higher/Lower trade contract, which gives the trader the liberty to choose a strike price different from the market price. Trading platforms such as that of Tech Financial partner brokers (24Optio n, OptionFair ) offer both a High/Low and Above/Below trade contract, corresponding to the conditions described for BOM’s Rise/Fall and Higher/Lower trade contract respectively.

The High/Low trade contract is found on every binary options platform, so any trader who wants to trade it will have no problems locating a good platform to do so.

Approach to a High/Low Trade

What is the proper approach to a High/Low trade for every beginner who is looking to make this trade theirs for the taking?

The High/Low trade is actually the easiest trade to profit from in the binary options market. It involves the use of technical and fundamental analysis to decipher whether the asset will head upwards (High) or downwards (Low), and stay away from market price until the price expires. The trick with this trade type is always in setting the expiry time. The 60 second trade, the Binary Meta and the OptionBuilder trade types found on the SpotOption and Tech Financial partner platforms are all High/Low trades with different expiry times. Getting the trade direction correct as well as setting a proper expiry are the two components of a binary options trade that must be performed correctly.

a) Predicting the Price Direction

Price direction of an asset is a function of performing technical analysis as well as fundamental analysis. Most of the High/Low trades that a trader will take in the market can be traded with technical analysis. Indeed, 90% of the time, correct trade decisions can be made with technical analysis. It is only on very few occasions that selected news releases can be used to perform trade analysis and trade entries. A trader who understands the role of candlesticks, chart patterns, pivot points and technical indicators in the market will be able to determine the price direction of that asset.

Many binary options platforms freeze up when the news is released. As a beginner, you should concern yourself with understanding how the four aspects of technical analysis just mentioned affect the price of an asset.

b) Setting Expiry Times

You can get the direction of the asset 100 times out of 100 and still lose money on the trade. This is because the trade expiry is a most important variable that a trader must also factor in when trading binary options.

All binary options trades have time limits. Some brokers will allow you to set your time limits while others fix it for you. This is the case when trading with the SpotOption or Tech Financial partner brokers. The advantage that BOM has over these brokers is that traders are allowed to choose their own expiry times out of what is provided, and these expiries are a bit more flexible.

How can a trader set a proper expiry time that is long enough to allow the trade move into profit zone, but short enough to stop any attempts by the asset to reverse this move? The key is in the time frame chart used for the analysis.

If for instance the trader uses a one hour chart for his trade analysis, the duration of the candlestick (which is one hour per candlestick) can give a clue as to the expiry time that can be set for the trade. The type of analysis can also give a clue to what expiry can be used. For instance, if the trader uses a breakout pattern to analyze the trade and the breakout candle closes well above the break point, the trader can use this information to intelligently predict how long the price of the asset will stay beyond the strike price.

Ultimately, practice and experience gained from repeated trading using these principles will hone the trader’s skill and increase his success rate in trading the High/Low option.