Trade Binary Options Using Quality Timing Tools and UltraTrade
How to Use Bollinger Bands
Bollinger bands are most effective for trading in trend-less markets. The oversold and overbought readings are more helpful in these types of market. Using Bollinger bands binary option traders can use oversold readings to buy calls. They can use overbought readings to buy puts. If they purchase calls, when the price hits the upper Bollinger band, traders should look to take profits as the market is likely to reverse temporarily. The same is true in the reverse direction. When the Bollinger bands show overbought conditions, aggressive traders of binary options might want to buy puts. Binary options can be traded on the S&P 500 (500 Large US Companies), US Tech 100, foreign currency pairs, mini Dow futures (30 Maj. US companies). There are a number of commodity contracts with binary options as well. Check with your broker about which contracts are available. The more common fixed binary options have two outcomes; 100% loss or a fixed percentage gain (can be the 50 to 70%).
Example of Binary Option Strategy
An example is if you feel the Standard & Poor’s 500 index, which is currently trading at 2000 will close out the day at 2010, by binary call at the current price, for $100. In a 70% fixed option scenario, if the S&P 500 closes at 2011 by the end of the day, you will have a $70 profit added to your account, in addition to maintaining the $100. If, however, the Standard & Poor’s 500 index closes the day at 2009 you will lose the $100. Again, in this scenario you would use the Bollinger bands to give you an indication of which way the market should move.
Types of Binary Bands
Binary options, depending on where you are trading can be traded for as short as one minute to as long as a month or more. Most traders use binary options to do short-term trading. Many will trade for 30 minutes only. The time you select depends upon your particular preference. Obviously, the longer the time to expiration, the lower the returns will be. Check the guidelines of the company you will be trading with. They will explain the expirations that are available, which binary options you can trade and other critical details and rules to their trading.
Where to Trade Binary Options
As stated in this UltraTrade article this broker helps investors with convenient trading tools. These include tools for trading 60 -second binary options, as well as longer-term trades and currency pair trading. Rebecca Sauders director of the company, understands how important it is for investors to have a safe, secure place to trade, so she started UltraTrade. The firm gives access to expert analysts, trading strategies and tools and educational help. The company is headquartered in London, England and licensed and regulated in Belize. UltraTrade offers a trading tool, iFollow, that allows new traders to copy more experienced traders moves, while they are learning the ropes. This tool allows for complete access to a library of educational material.
Prepare Yourself First
Trading in Binary options using Bollinger Bands or any other trading tool, requires a bit of study and preparation. The main things to understand are the trading guidelines of your broker, how the security, index or commodity you are trading works and where to find tools to help you better judge the market moves. Binary option trading can be a way for new traders to get started in the markets, because the amount of money needed to get started can be lower than other securities and lower than regular options contracts. Just be prepared before you jump in to trading. Study the markets, study the specific option contract you will be trading. Once you feel you have a good understanding of the process get into the arena. It can be a good place to play the market swings.