Making profits from binary options is not something that requires you to have optimum market conditions. You have the tools at your disposal to make money with binary options in volatile markets just as easily as when markets are trending.
Many trading methods that are used by financial investors see their performance levels struggle when the volatility of the market picks up. This is due to them only being able to go either ‘long’ or ‘short’ on the assets price. When markets are undecided as to their next move, the trader has only two options – to sit out of the market and wait for appropriate conditions to return, or try their luck while accepting the greater risks involved.
The reason that so many trading methods fail when market volatility increases, is down to the simple fact that long and short trading methods require trending markets to provide optimum results. If you think about it, the logic makes perfect sense. To make a good return you will need the price on asset to move strongly. i.e. a good distance, in a particular direction so that you can book good profits. However strong moves are not characteristic of volatile markets. Often the price action is ‘choppy’ with little conviction or strength behind any market moves.
The Binary Options trader has several distinct advantages when trading in these markets. Firstly he doesn’t need bit changes in price to make a high profit. Rather than needing to forecast large moves to book a decent return, instead pay-outs are fixed and can be earned by simple forecasting that the price will finish higher or lower. So even when markets are barely moving, the same potential for making a return is on offer, no matter if a price moves only 1 cent in your favour.
What is more, moves when the price action is volatile tend to be fast and short lived. Here again the binary options contract provides a clear advantage in that it can be placed to capture short term moves. This allows the trader to quickly ‘dip into’ the market to earn a profit and then be out before the direction changes again. Compare this to the long and short trader who may have to wait for a long time with positions in the market either waiting for a profit or trying to minimize a loss.
However while these are obvious advantages there is a further big benefit that the binary options trader has up his sleeve. He doesn’t just have to try to call the market long or short or even higher or lower. The range of contracts that are on offer with binary options mean that it is also possible to alternative price outcomes. In addition to the Higher and Lower contract, the binary trader also has the ability to place One Touch, No Touch and Boundary/ Range contracts. While these follow the same basic principles of all binary trades (fixed payouts, known risk etc) they also add a further dimension to trading. They are particularly suited to volatile markets and actually help to lower trading risk.
Fast moving prices can be exploited by the use of One Touch trades which can be placed in the path of quickly gaining or falling price moves to capture a quick profit. Alternatively Boundary or Ranges can be set up to capture gains from both limited and extreme price spikes. These contracts offer the opportunity to make a return from a price remaining either inside or outside of an established range. Ultimately these offer both a unique and potentially profitable way in which you can keep trading and earning consistent profits from binary options even when the markets are at their most volatile.