While every trader has their own approach to trading Forex Binary Options, there are a couple of well-known approaches that sit at either end of the spectrum
; Long Shot and Time Vault.
You’ll probably have heard the phrase, “it’s a long shot” before – and probably not in a context that involves trading. It’s a phrase that’s used when people give something very little chance of happening. But the important thing to take from the phrase in this case is that there’s still a chance that something will happen. And when it does in relation to Binary Options trading, the rewards can be very profitable.
The Long Shot strategy is basically high risk for a high reward. Specifically, you pick a price that’s well outside the strike price, meaning it’s less likely to be a successful trade. Because of that, this is a strategy where you need to be aware that, because of the high risk, you’ll lose more trades than you win. However, you can afford to lose more because when the winning trades comes in they return a big profit. You have to take the bad results to get the good ones.
In a Long Shot strategy, it’s preferable to go for trades that have a long expiry time. While a lot of people enjoy Binary Options trading because of the Short Term trading possibilities (as low as 60 seconds), the Long Shot strategy requires you have the trade open for longer so the asset has more time to move. Since you’ll likely be aiming for the far ends of the price rise/fall, this is a fundamental part of the strategy.
Another benefit of the Long Shot strategy is that, because you can get high returns on low investments, you don’t need to spend a lot. You could hover around the minimum investment mark required by your broker which, if it works for you, makes it a relatively inexpensive way to invest.
Opposite to the high risk, high return nature of the Long Shot strategy, we have the Time Vault strategy. Trades of this kind have a much higher chance of success, but they don’t pay out as much profit. Traders following this approach should be aware that they will pay out a lot more on a trade than they will make in profit.
The way a Time Vault strategy works is that you purchase a Binary Option Forex asset that’s ‘in the money’, with the idea is that the currency you choose will stay within the strike price band. The odds are that it will, which is why it’s such an enticing strategy.
Some people look at the returns on a Time Vault trade and consider it’s not worth the investment, for example, you might have to invest $100 to get a $10 return. But because the chances of winning the trade are so high, when you add a number of relatively low profit trades together, a long term profit target can be reached quite quickly.
Whatever strategy you choose to go with, it’s important to remember that nothing is guaranteed in the trading world and every approach has its own advantages and disadvantages. Consider what you want to get from your trading experience and pick the strategy that suits you best.