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An Excellent Binary Option Trading Strategy To Use To Increase The Gain & Minimize Loss Binary options are an easy and popular technique to trade the markets, without the difficulties of regular trading. Plus, you don't need thousands of dollars to get started. You may achieve returns of 60% to 500% in less than an hour! We will concentrate on the simple, fixed-payout binary options offered by binary options brokers such as AnyOption, StartBrokers, Binarix and others. We'll use AnyOption binary options platform in our example, as they have the best payouts of any fixed-payout binary options broker we have found. You could trade stocks, indexes and commodities with binary options, but we'll concentrate on the currency markets, due to the ready availability of totally free charting packages and technical analysis tools for foreign currency traders. In a regular fixed-payout binary options trade, a profitable trade pays out between 60-70%, while a loss will result in a return of 15% of your investment. This equals a total loss of 85% of your investment. A potential gain of 60-70% versus a possible loss of 85% doesn't put the probabilities into your favor. But, I'll share with you a powerful hedging strategy which creates a "profit zone" with a general positive expectation. By placing a Put (sell) option over a Call (buy) option, it's practically guaranteed that a minimum of one trade will be profitable. Due to our negative profit expectation, a simultaneous win and loss will result in a loss of 15%, while a win will result in a profit of 60-70%! A potential gain of 70% vs. a possible loss of 15% is a lot better than a possible loss of 85%! Here is an example of how we can do this. Let's say we are placing a Call option in an uptrend. As long as the uptrend continues, we'll realize a profit at the expiration time.But what if the trend reverses? This is the ideal opportunity to place our profit zone trade. Just place a Put option in the course of the trend reversal. As long as the expiration price is above our Call option strike price, but below our Put option strike price, we'll receive an overall profit of 60-70% of our investment. If one of the trades finishes out of the money, we'll see a loss of 15%, assuming that both trades are the same size. With these odds, we only require to win about 25% of our trades to make a profit. Without this strategy, we would have to win well over half of our trades.This setup won't happen always, but as long as you always trade into a powerful trend, and keep aware for potential reversals, you should see an overall profit trading foreign currency binary options. You may find out more about binary options broker review here to help you with your forex binary options trading. Looking for more information on binary options broker review ? Please visit http://forextradingplatformreviews.com to find out reviews for all major online forex binary options trading platforms.
Published on Jul 5, 2011
/ForextradingPlatformReviews.com Binary options are an easy and popular technique to trade the markets, without the difficulties of regular...