Binary options volatility strategy
- Published: Friday, 16 January 2015 07:17
- Written by Stephan
The volatility strategy offers itself a binary option strategy, if no clear trend is recognisable in the performance. In this way, this strategy in the trade of binary options distinctly differs from the trend-following strategy, which requires a clear, recognisable trend of the performance. The volatility strategy is based on that, where the development of a currency pair or of a security paper features very high fluctuations.
The best binary trading strategy with rapid fluctuations
Unlike with the trend-following strategy, with the volatility strategy it is insignificant whether the market price of a paper rises or drops. It is absolutely necessary that significant price movements are determinable. These can proceed in the same direction but can also feature in the opposite direction.
The fluctuation of a paper or a foreign currency will be influenced by the political and the economic development of the surroundings or of the company. The press conference on financial statements of a company can, for instance, lead to a strong deflection of the market price to be determined. Even a profit warning or the announcement of a change of a management board, can lead to a strong deflection of the market price.
The news of a company can be good or bad. As long as a deflection of the market price takes place, the volatility strategy is effective. However, since the direction of the price development has no meaning, the trader of these binary options strategy ultimately bets on market prices, which drop or rise rapidly. His risk of loss increases, since one of both developments definitely leads to loss. So that the volatility strategy still brings about a profit, his profit chance must be disproportionately high.
The volatility strategy – high yields for those venturesome
Whether the volatility strategy is possible for beginners, this ultimately depends on the personal risk attitude. Bigger price fluctuations also lead to a higher risk of profit or loss. For this reason, beginners should only bet smaller sums first until one truly trusts himself with trading with options. It is also important to keep an eye on the economic and financial news. They provide the information of with which papers due to profit warnings, press conferences on financial statements or press releases, could strong value fluctuations occur in the near future. These strategies for the trading with binary options are only provided to beginners by a continuous monitoring of the markets.
On the other hand, professionals in markets can realise quite interesting profits. It is nevertheless important to be aware of the risk of loss at any time. However, those who operate with the trading of binary options for already a long time and who trust themselves with having a very concrete idea on the upcoming financial events, can definitely bet on the volatility strategy. It rather belongs to a high class of trading and makes the trade with superficial, simple binary options into an equally exciting and highly profitable investment option.