Unleashing the Perception of Binary-Range Options

When you want to excel in binary option trading, then you are ready to try different trading approaches. Most traders are inclined to make use of the boundary option as well. When you opt for a boundary trade, then there are various possible outcomes. The price of the asset can be outside the range. In this case the trade will end in the money if the price is outside the defined price boundaries at the time of expiry. Another possibility is that the price can be inside the boundary.

If the trade ends up inside the boundary, then you earn a profit provided the price remains inside the defined range at the time of expiry. There can also be a possibility that the price of the asset may remain between the boundaries. This means that the price should not touch either of the boundaries.

How To Use The Boundary Option

First, you need to define the range that you are eager to use. The best time to use the boundary option is when the market moves sideways and it is not trending. When the market is trending, then it becomes quite difficult to predict the floor or the ceiling value. If you want to figure out the range-boundary market, then the most important thing that you need to do is make use of an indicator that can help you identify the market trading direction. For example, you can use the Bollinger Band as an indicator to find out the range-boundary market.

The Bollinger band has three different bands. It has an upper, lower and middle band.  The lower and the upper band can help you trace the price movement boundaries in the consolidating market. You can make a huge profit with a tight pre-determined boundary range. Let us now move to a real-life example related to boundary trading.

Example To Explain Boundary Trading

When you trade the boundary option, then you pinpoint the higher or lower limit within which the price of the selected asset will remain. Let us suppose you choose an EUR/USD currency pair. You predict that the price of the currency will remain in the range of 1.29626 and 1.29725. If the price of your chosen asset will remain in this range until the time of expiry, then your trade will end in the money. If the chosen asset touches the lower or upper boundary before the expiry, then your trade will end out of the money.

What is appreciable about range options is that you can exit a trade before the expiry. For example, you predicted that trade would remain in the range, but then the news is released that affects the price of your chosen asset. You realize that the price of the asset will no longer remain in the range. 

What you should do in this situation is that you can sell off your asset quickly. This way you can reduce your risk and the chances of loss. If you want to increase your chances of winning the Binary range options, then there is a guideline that you should follow. You should not invest a huge amount when trading the boundary option. Ideally, you should invest in multiple boundaries at a time. This will help you to get more profit, and you will acquire more experience in boundary trading.

It is also important that you should be updated regarding the latest financial news if you are eager to win the boundary option. Remember the news can change the outcome of your trade. This is why you need to follow the proactive approach to avoid disappointment later on. Most traders prefer to trade outside the boundary. It is profitable in many cases, but again you need to monitor the market to make a decisive move.