USDJPY Long Term Analyse Bullish Pennant Formed (Dec24,2016)

USDJPY bullish pennant

USDJPY formed a very beautiful bullish pennats pattern .If market breaks the upper trend line then enter the buy order from 117.27 this level.

Best Of Luck

00:21   by Unknown ·   0

School’s Over! Now What?

So now you’ve finished the School of Pipsology. Are you ready to step into the real trading world? Before you enter the wild and wacky world of forex, we believe that it’s always important to give back and help out in the community.

Absorb as much as you can and learn from your fellow traders. Remember, it’s better to check and educate yourself before you wreck yourself!

Next, get to know the successful graduates of the School and find out what they’re up to now.

Cyclopip

Back in High School, we talked about how currency crosses present more trading opportunities as well as cleaner trends and ranges. Lucky for you, we’ve got the guy (err… monster) who’s an expert in trading those cross-currency pairs. Cyclopip may have just one eye but it’s pretty darn sharp when it comes to spotting big winners on the crosses!

Have we mentioned that Cyclopip is also our resident sports fanatic? You see, back in the day when his ale belly was barely visible, Cyclopip was the reigning MVP of the CBA (Caveman Basketball Association). So if you dig currency crosses or hoops, make sure you check out Cyclopip’s Currency Cross-Eyed trading blog because this superstar sure knows how to make it rain buckets and pips!

Happy Pip

If you need proof that diamonds aren’t always a girl’s best friend, look no further than Happy Pip, our lady trader for commodity-related currencies or comdolls! This Daisy Dukes-lovin’ party girl gets her kicks by watching gold and oil, especially if she spots good trades on her favorite Aussie, Loonie, and Kiwi pairs.

Not a lot of people know this, but Happy Pip used to be a cheerleader back in high school. That should explain the huge smile that’s always on her face! She even gets to do her “happy dance” if she wins a trade on her Playing with Comdolls blog. If you need somebody to perk up your day, make sure you go Happy Pip’s way!

Huck

The youngest in the bunch is Huck, a young barista and part-time forex trader. She normally has her hands full just like all you yuppies out there, but luckily, she was able to find time to develop her own HLHB mechanical trading system!

Since she still considers herself a newbie in the forex world, Huck decided to stick with the major currency pairs first. Don’t underestimate her though. She is fully capable of bagging hundreds of pips with her gutsy trade ideas! Check out her blog called “The Loonie Adventures of a Forex Noob” and don’t hesitate to give her a shout out!

Queen Cleopiptra

Back in college, we talked about the importance of intermarket analysis. We told you that you should keep an eye on the dollar index, as well as intermarket correlations with commodities and equities.

Now, this won’t be easy at first, so we’ve invited Raghee Horner as a guest blogger and crowned her Queen Cleopiptra!

In her Chartology blog, Queen Cleopiptra discusses price action, chart setups, volatility, market cycles and the psychology as to why the markets move the way they do.

In addition, her Highness also talks about the gold, oil, the dollar index, and equity markets and their potential effect on overall risk sentiment and the forex market. If you wanna be the best at intermarket analysis, she’s the woman you need to go to!

Jack The Pipper

Ever turn on the tube and flip to the news channel and see that a billion dollar deal pushed through? Or that Company A bought out Company B for X kajillion euros? Ever wonder how it will affect the currency market?

Luckily for you, Jack “The Pipper” Crooks is here to tell us all about how moolah flows! In his Currency Currents blog, Jack focuses on the key factors that help drive the flow of global capital in and out of equities, fixed incomes markets, commodities and currencies.

So never fear, Jack’s got yo’ back! Once you understand what makes the world of money go round, some of that cash will flow right into yo lil’ piggy bank!

There you have it! If you ever feel lost in the forex jungle, you can always count on these friendly guys and gals to help you out. Now go forth and catch those pips!

05:11   by Unknown ·   0

Love The Forex Game

In his prime, future NBA Hall of Famer Kobe Bryant MADE 1,000 shots a day in practice to increase his chances of making the 20-30 shots a game he takes.

Along with team practice, Peyton Manning (NFL legend) watched hours and hours of tapes of opposing teams every day (even during the offseason) to develop his uncanny ability to read defenses and score against them in one 60-minute game a week.

Tiger Woods’ job in his prime was winning golf tournaments for a living. Before the injuries and personal drama, he won 14 major golf tournaments and 79 PGA tour events – more than any active golfer. He practiced religiously every day for 15 years before winning his first pro event at the tender age of 18.

The obvious commonality between these champions is that not only do they work their butts off, but they also love with they do. They love the challenge and the competition.

Their passion for the game is so strong that it gets them through the hours upon countless hours of tedious tasks that others may not enjoy like tape watching, suicide drills, weight training, putting drills, etc.

To them, these things are fun!

Again, we’re not gonna sugar coat things. You’re all big boys and big girls.

There will be days when trading SUCKS!

It will get to the where you think “Gosh darnit! &#$(*&!! I wanna quit now.”

There will be days when you will be totally clueless. You won’t understand why the market is not moving with the news or why your mechanical system is getting chopped up.

There will be days when you will feel extremely lazy. You won’t feel like journaling. You won’t feel like reviewing your trades.

Trust us, you will experience a lot of these days. Especially in the beginning.

On days like these, it’s the “love of the game” that will keep you doing the things you need to do to become a good trader.

To become a good forex trader, it doesn’t take a genius IQ, an Ivy League pedigree, or the need to have three arms and three eyes.

It will take hours, LOTS of hours of market study, chart time, and deliberate practice to trade well. If you embrace the challenges of trading the currency market and have fun picking it apart, your chances of surviving and thriving will be improved immensely!

Okay, that’s it. Thanks for listening and completing the School of Pipsology.

We really appreciate that you decided to begin your forex trading journey with us.

Once you’re all set up and ready to trade, it’s up to you from then on out.

Grind it out.

Never quit improving every day and you could change your life for the better.

Good luck and good trading!

05:03   by Unknown ·   0

Be Patient. Stay Disciplined.

Patience.

It’s a virtue…Especially with forex trading.

Arnold H. Glasgow, an American humorist, once said, “The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.”

Developing your currency trading plan will take time. Developing skills will take time.

Waiting for the right trade opportunities requires patience. Entering and exiting a trade at the right moment requires patience.

Discipline.

Discipline is also a virtue, and it means doing the things you need to do to progress and get better….even if you don’t want do it.

This means preparing for each forex trading day or week with research and chart study.

If you’re a mechanical or automated trader, this means back testing systems and constantly trying different settings and strategies as the environment changes.

And of course, don’t forget about keeping a trade journal and reviewing every single day you trade.

Journaling is the one trading task that separates the wannabe traders from the real deal traders. Unfortunately, most newbies won’t do it.

Forex trading concepts and techniques are simple and easy to learn. What’s hard to learn is how to be patient and disciplined to do the right things and make good trading decisions. Truthfully, it will be one of the most difficult endeavors you will ever take on.

To a newbie, sitting on the sidelines and watching the markets move while you wait for your best setups means you’re missing out on profits.

This way of thinking leads to a failure of patience and discipline and causes some of the most notorious trading mistakes in the book:

• Impulse trades
• Letting losers run too long
• Cutting winners too quickly
• Revenge trades

These actions will kill your account!

Remember that your job as a newbie is to learn how to make good trading decisions and SURVIVE!

The best thing you can do to stay patient and disciplined is to look at your career as a trader as a marathon and NOT a sprint.

This is not an overnight, get-rich-quick scheme.

This is a commitment to build skills that will allow you to profitably trade in any environment the market will throw at you at any time.

And essentially, free you from the chains of the “Man.” Fight the Power!!

If you stay patient, maintain discipline, and commit to constant improvement, then your results today as a forex noob will probably be nothing compared to the results of the trader you will become after years grinding it out in the markets.

Another thing….

Always remember that opportunities for good trades occur ALMOST EVERY SINGLE DAY!

No need to rush into bad currency trades. They will only set you back from reaching your goals.

Stick to your best ideas and setups, and if they don’t come that session, just wait for the next.

Unless the world stops trading currencies (knock on wood) then there will always be opportunities around the corner.

04:57   by Unknown ·   0

Holy Cow! There’s No Holy Grail!

Ask any quant on Wall Street (the super geeky math and physics PhDs who create complex algorithmic trading strategies) why there is no “holy grail” indicator, method, or system to pull profits 100% of the time. He or she will give you these two reasons:

1. You can’t predict the future.

Is there anyway to know what a central bank president will say during a speech? Or maybe what a super famous investor or hedge fund manager says during a random TV interview?

Do you know when the next terrorist attack will hit and cause risk aversion?

How about a natural disaster like an earthquake or tsunami?

The list of unforeseen market moving catalysts is infinite and when they happen, they can rock the markets and your forex trading system.

Understand that this is part of trading and the best you can do is be prepared to limit your losses if they occur.

Be ready to have your world rocked. And we don’t mean that in the way you think it means.

2. Data doesn’t move the market. Humans do.

There will be times when data or market themes do not mesh with price action.

Why is that?

Maybe the outcome was priced in ahead of time? Maybe forex traders weren’t focused on the data that was released? Maybe there was an institution covering a huge position that was on the wrong side of the market?

Would all players in the market react to an unforeseen catalyst the same way?

Whatever the price behavior may be, the decisions that lead an forex trader to take action aren’t always logical or congruent to the information out there.

When you multiply this by the millions of players with different goals/strategies and different sized trading accounts, it becomes impossible to tell where the overall market will go every single time.

You can’t quantify or calculate human behavior and unknown future events into an elegant mathematical equation to completely get rid of risk.

There will always be some level of uncertainty and there will be times when you will be on the wrong side of a currency market move.

Actually….there will be MANY times when you will be on the wrong side of a currency market move.

Perfectionists should probably stay away.

For those of you who always feel the need to be correct, we must warn you now…

Nobody can perfectly predict the market every single time.

Nobody.

All hope is not lost though if you decide to stubbornly not listen and continue your search for the Holy Grail.

Rumor has it that if you can find a pink unicorn standing under a rainbow, you will come across an invisible leprechaun who will give you the Holy Grail. And the iPhone 6! Good luck.

04:54   by Unknown ·   0

Congratulations! You Made It!

You made it!

You’ve read all six gazillion pages of the School of Pipsology and now you have everything you need to conquer the forex world, retire in a year or two, and then go travel the world in your Gulfstream jet, right?

Think again noob!

Sorry to burst your bubble, but you have just barely scratched the surface.

We’re not going to sugarcoat things. We told you early on that it was going to be difficult.

If you’re a noob and just finished the School, you’re most likely going to be horrendously bad at trading.

But that’s okay. Unlike noodles, there’s no such thing as an instant expert currency trader. Anything that’s worth learning well takes time. That’s why instant noodles taste disgusting.

Going straight into the markets and trading a live account would be like trying out for the NBA just right after reading “Basketball for Dummies“.

You’d probably get out-smarted, out-hustled, out-muscled, and out-maneuvered. You just haven’t developed the skills or mental/physical conditioning enough to hang with the pros yet.

It’s the same thing with the forex markets.

The currency world is dynamic and complex. It’s ruled by brainiacs with PhDs and MBAs from Ivy League Schools, who have huge amounts of capital, and all the technological toys money can buy.

When you enter the forex trading world, you have be ready to dive in and wrestle with the biggest sharks. And they love feasting on noobs.

Are you scared now?

Good!

We just did that to make sure you understand that even though you’ve got to have fun in everything you do, forex trading is serious business and you have to approach it that way.

With all that said, anyone with the passion and commitment to learn this business has the chance to get their small piece of a very, very big pie and then some.

Yes, you can make it, but before beginning your forex trading adventure, here are a few lessons we’ve learned that we’d like to share to help you get started on the right path.

04:50   by Unknown ·   0

Focus on the Process. Not on the Profits.

We’ve made the School of Pipsology as easy and fun as we could to help you learn and understand the basic tools and good practices used by forex traders all over the world, but remember that a tool and technique is only as good as its handler.

A painting does not become a beautiful masterpiece by the brush alone. It’s the vision and skillful hand of a painter that creates a work of art.

A football doesn’t find its way to the end zone by itself. It is the quarterback’s ability to read a defense, position his players accordingly, and send the football to the right spot at the right time.

It’s not the “ridiculously awesome” indicator, the Cowabunga system, or the “super duper” forex strategy that gets your account in the black at the end of the year.

It’s your ability to read the market, execute the correct strategy for that particular situation, and consistently apply proper risk management techniques that hopefully gets you more profitable wins than losses in the long run.

Like in art, sports, or any performance endeavor, forex trading is a multi-faceted skill. The tools alone won’t make you successful.

A dedicated effort towards education and application of what you learn, as well as the constant review of your performance is the only path to success.

In the beginning, that process of learning and deliberate practice should be your main focus, NOT the profits.

Continuing with the basketball analogy, if your goal was to reach the NBA, would you get to the level of performance you desired by playing games only?

Or would you develop faster by focusing on physical conditioning, developing different skills (a jumpshot, dribbling, footwork, passing, etc.) in practice, as well as playing games?

Probably the latter right?

If you went straight to the NBA without any training, do you think you’ll score many points or win games?

Nope. We didn’t think so.

Learn the market. Learn forex trading techniques and high probability setups/systems.

Learn how to manage risk with proper position sizing and stop losses to limit risk and maximize reward.

Learn how to put it all together in DEMO.

Then record and review your progress constantly at MeetPips.com.

Over time, this process will lead you to a forex trading method or system that works for YOU and that’s when your winning trades begin to outweigh your losing trades.

04:49   by Unknown ·   0

Congratulations! You Made It!

Focus on the Process. Not on the Profits.

Holy Cow! There's No Holy Grail!

Be Patient. Stay Disciplined.

Love The Forex Game

School's Over! Now What?

04:43   by Unknown ·   0

GBPCHF long term analyse double top (Dec22,2016)

GBPCHF double top

GBPCHF Long term analyse the price breaks the neck line of double top pattern now GBPCHF can go down from 1.2646 this level you can place buy order from here 

best of luck

02:18   by Unknown ·   0

Binary Options Vs. Forex

Binary options trading has long existed over-the-counter, only experiencing a massive growth spurt in the last few years. Now, approximately 90 companies (including those who white label their products) offer some sort of binary options trading service.

So okay, it’s a growing industry… But why should you involve yourself in it? Why should you learn a whole new type of trading when you’re already learning spot forex? Isn’t it better to something you already know?

There are many advantages and disadvantages to both binary options and spot forex. We’ll touch upon a few and hopefully, you can determine which trading instrument may be right for your trading style.

Max Risk

One of the great things about binary options trading is that you always know the exact maximum gain or loss in advance. The trader controls the premium at risk to enter the binary option trade, and that is the only amount that can absolutely be lost. Most binary option brokers even allow you to cut your max loss by “folding” your trades ahead of expiration after certain types of trade conditions have been met.

In contrast, with spot forex, even with a stop loss order set, you cannot be 100% certain that you will lose only the pre-calculated amount that you risked. While improbable, there’s always the chance that certain issues may affect your final max risk like slippage, lack of liquidity to execute a stop order at the desired price, a broker’s trading platform goes down, etc.

Trade Management Flexibility and Maximizing Reward

Aside from High/Low options, many of the binary option plays are only available at certain times of the day or week, and most times the strike prices are set by the broker.

Even if you have an idea of how a market might behave within a certain time frame, you may not have the best option available to you to play your idea. With spot forex, you are able to enter limit orders for any price or execute a market order at any time during open market hours.

In terms of exiting open trades, some binary options brokers allow you to close options trades early, but usually only after a predetermined amount of time has pass after the option trade has opened and before it closes.

And as mentioned before, the value that is returned to the trader is based on whether the market is in-the-money or out-of-the-money and of course, with a piece going to the broker.

In spot forex, you can close your trade at any time (except on weekends with most brokers). Even if it’s one second into the trade, you can get out and book profits or reduce losses.

Finally, if you think there’s going to be a long trend and you want to maximize your profit on it by holding it as long as possible, you can do so in the spot market using scaling in and trailing stop techniques. With a binary option, the expiration date and cap on profits limits you; you’re out of the trade as soon as you close or the option expires.

Depending on your risk and trade management preferences, either trading instrument can be good or bad depending on how much time you want to spend in front of your trading platform, how active you want to be, or what you expect the market may do.

Transaction Costs

In binary options trading, there are no additional transaction costs other than what is normally factored into the final payout.

In spot forex, the transaction cost comes in the form of a spread, a commission, or both. We’ve already discussed this in a previous chapter, but feel free to revisit the lesson and read up on it again.

Trade Choices

Another great thing about binary options trading is that you aren’t limited to just currency pairs like with most retail forex brokers. While currency pairs are the most common assets you can trade, with some binary options brokers, you may also have the opportunity to trade your ideas on a limited number of individual stocks, stock indices, and even commodities.

Volatility Risk

Surprise volatility is not usually an issue in binary options trading. Any trade you take can weather the volatility caused by certain events. Provided that your view turns out to be correct, you don’t need to worry about the market’s knee-jerk reactions. The max risk is still set, but so is the max reward.

In spot forex, however, sharp swings can affect the value of a position greatly and very quickly, which makes the additional task of setting up proper risk management processes very important.

Trader Error

The margin for error when entering a trade is very small in binary options trading. This is due to the fact there are only two actions to take with binary options: open and close.

There are no limit orders to keep track of, or to close or adjust. In spot forex, an inattentive trader may forget to place exit and/or adjustment orders, potentially creating a loss greater than he/she intends.

02:54   by Unknown ·   0

Are Binary Options Regulated?

Binary options trading is the new kid on the block, gaining the attention of regulators only recently as it is now being offered by many brokers, both old and new to the industry.

Unlike spot forex trading, which is overseen by the CFTC, NFA, or other foreign regulatory agencies, there aren’t a lot of regulators overseeing binary options trading at the moment.

Of course, with binary options gaining popularity, the ball is starting to roll on creating regulations for this relatively new way to trade. Cyprus Securities and Exchange Commission (CySEC) was the first regulatory body to consider binary options trading as a financial instrument back in May 2012.

In the U.S., one of the top binary options broker, Banc de Binary, made an initiative to seek regulation from the CFTC for its operations. Other binary options brokers are expected to follow suit.

Across the globe, other regulatory agencies are also starting to keep a closer eye on binary options trading. The Japanese Financial Services Authority is drafting its regulations for Japan, the largest market for the product.

Over in Malta, the Maltese Financial Services Authority (MFSA) is making arrangements to take charge of regulating binary options brokers in the country.

In line with this, brokers will undergo an application procedure and a strict due diligence process to secure its license to operate. Among the possible application requirements are that binary options brokers fall under the Investment Services Category 3 license and will be subject to a minimum capital requirement of €730,000.

If you’re planning to open a binary options account, make sure you do so with a regulated broker. Regulated brokers are usually held to higher operating standards, and if you do have issues (e.g., trade execution, withdrawing funds, etc.), you have a higher power to help you resolve those issues with the broker.

Although unregulated brokers shouldn’t automatically be viewed as scammers, trading with them could entail risks such as a lack of guarantees that the firm’s operating funds are kept separate from client funds. Plus, there will be no one to hear your case and take action on your behalf if you have an issue.

Stay informed on the industry by staying tune to Forex Ninja’s Espipionage blog for any updates on binary options regulations.

02:52   by Unknown ·   0

Market Analysis For Binary Options

Remember back when you enrolled yourself into the School of Pipsology, we talked about “The Big Three” types of market analysis. In case you forgot, they are:

1. Fundamental Analysis
2. Technical Analysis
3. Sentiment Analysis

Why are we bringing this up again? Well, the good news is that these building blocks of analysis can also be used when trading binary options!

Fundamental Analysis

Trading the News

One way to make use of fundamental analysis would be to go with a trade-the-news strategy. If you’ve gone through our lesson on this trading strategy, you would know that this is best applied to those events that usually cause a ton of volatility. The spike in volatility tends to lead to fast moves which can send price rocketing higher or plunging lower.

For binary options, this can be particularly effective when you trade simple Up/Down options. After all, you would simply need to get an idea how price may react to better/worse than expected data and how strong the reaction may be. You just have to be confident that price can reach the strike price of the option that you bought.

For example, you plan to trade the Australian retail sales report. Let’s say you have a bullish bias on the results. Chances are that a better-than-expected result will spur the Aussie to new highs, so you would look to buy a “call” option on AUD/USD.

Now let’s say that, as you expected, we saw a better-than-expected result. Luckily, AUD/USD also rose, rising above the strike price. Paycheck time, baby!

Of course, there are a couple of factors to take into consideration when playing the news.

First is the potential for volatility. When playing a news report and buying a binary option, you have to be fairly confident that the event will spark enough volatility so that price can reach the strike price and stay above/below that level. If you try trading a report that rarely causes a ripple, you’ll be throwing money down the drain.

Second, you have to factor in the time component of binary options. Remember, for the simple Up/Down options, price has to be above or below the strike price at the expiration date.

When trading binary options and implementing a trade-the-news strategy, you may also want to consider going with one-touch options since price would only have to touch and not necessarily close at a particular level.

You can also try the Out of Range options if you expect the price to move with strong momentum away from its previous range. With this option you don’t have to pick a direction, just decide whether or not the market will move big time in one direction or another.

Technical Analysis

Love using those fancy-schmancy indicators like moving averages, Bollinger bands, and Stochastic? Don’t be afraid to slap these indicators on your trading charts when you plan to trade binary options!

Remember, these indicators help you gauge where price action may be headed next. These are used across all sorts of trading markets and not just spot currencies. Just make sure you have a good understanding of how each indicator works before incorporating it into your analysis.

Studying technical levels and inflection points may also prove helpful when you trade binary options.

Let’s take a look at this example on GBP/USD.

Price has just broken down from a double top. With this behavioral pattern, price normally continues to trade lower at a distance equivalent to the height of the double top.

One way you could play this is by taking a One-Touch trade. If the strike price that your broker offers is somewhere between 1.5450-1.5550, which is within the height of the double top, buying a “put” option might be a setup worth considering.

Sentiment Analysis

Sentiment analysis is the task of measuring the market’s current “feeling” with regards to broad risk flows. Are traders confident in buying up risky assets or would they rather reduce risk by buying safe-haven assets or going into cash? This type of analysis will prove to be particularly useful when trying to hop on trends.

Will EUR/USD break for new highs? Or do you think the trend is overdone and there’s not enough momentum? You can use sentiment analysis to gauge how the market is feeling.

If it seems that risk appetite is still at a high with no potential changes to the market themes in sight, then the chances are we could see the trend continue. If you’re fairly confident that market sentiment will favor a risk-on environment, you could consider purchasing a “call” option on a risk currency or asset (e.g., Australian or New Zealand Dollar, Equities, Commodities, etc.)

On the flip side, if you think a reversal in sentiment is in play and depending on how overdone you believe the move is, you could consider purchasing a “put” option on those same risk currencies or assets.

Combination

Just as in spot forex trading, it’s not necessarily a case of choosing which type of analysis you’re going to use because they’re not mutually exclusive.

In fact, you can combine all of these types of analysis to form the basis of any trade that you take. Fundamentals can help give you a bias as to what direction you want to take, while technical analysis will help determine the chances of the market reaching, breaking and finding support/resistance at a certain price. Meanwhile, sentiment analysis may let you know whether the market is in a risk-on or risk-off mood.

In the end, the key is for you to learn from all your mistakes and gain experience. Over time, this process will help you fine tune your analysis and help you develop good trading practices.

02:51   by Unknown ·   0

3 Types Of Binary Options

The main factor when talking about payouts is the type of binary option traded.

The option trade example given in the previous section is a type of an “up/down” option and is considered the simplest kind. Predicting if a currency pair would be above or below the strike price before it expires pays the lowest return. This averages between 70%-90% depending on your broker.

Meanwhile, the are more complicated kinds of options like the “touch and range” binary options, which have higher payouts since winning such trades tends to be harder. From what we’ve gathered, brokers usually offer payouts around 200%-400% and a few can even go as high at 750%!

Up/Down Options

An Up/Down option can go by a few different names: High/Low, Above/Below, and Over/Under. It is the simplest and most common type of binary option.

Traders simply purchase a “call” option if they believe that the closing price will be above the strike price when the contract expires, or buy a “put” option if they think that market will close below the strike price at expiration. The EUR/USD trade example given in the previous section illustrates how an Up/Down option typically works.

Easy enough, eh? The simplicity of this option is why Up/Down options usually have the lowest payouts.

Up/Down options typically expire within an hour or a day, but some brokers are offering options that expire in minutes. Heck, some even expire in seconds! Of course, this could either do your account a lot of good or it can cause a whole lot of damage. Make sure you manage your risk properly!

Touch Options

One Touch option trades don’t require the market to be above or below a certain level at expiration. Instead, it just needs to TOUCH the strike price at least once during the option contract period for it to be profitable.

No-Touch trades, on the other hand, require that the market price DOES NOT TOUCH the strike price during the life of the contract for a trader to make profits.

Touch trades are offered during certain times of the day, and some brokers offer touch trades during weekends that usually offer higher payouts (around 250%-400% of your risk premium) than a simple Up/Down option trade.

For example, let’s say that EUR/USD closed at 1.3100 on Friday. Over the weekend your broker offers a call option where you will profit if EUR/USD touches 1.3450 at least once next week and a put option where you will profit if the pair touches 1.2750 at least once in the same period.

You decide to take the call option. You find that during the option period EUR/USD had reached a high of 1.3600 before it closed at 1.3050. Since the market reached the call option’s strike price (1.3450) within the option period, you would have won the trade even if it didn’t close above the level.

On the contrary, those who took a No-Touch option on the same price would have lost their trades since the pair DID touch the strike price.

Touch trades typically work out well when volatility picks up while no-touch trades are ideal for pairs that have a tendency to consolidate.

Still not exciting enough for ya? You can also try out Double Touch/Double No-Touch options! They are just like Touch/No-Touch options, only with two strike prices. The asset’s price has to touch (or not touch) two different levels for a trader to win the trade.

Range Options

Trading Range/Boundary/Tunnel options is a lot like playing the Super Mario underwater level wherein Mario cannot touch both the top and the bottom of the screen.

For In Range trades, the market price must stay within a predetermined range and avoid touching the two strike prices within the option period in order for your trade to be in-the-money.

Some brokers offer Out of Range options where traders can profit if price breaks out of the predetermined range within the option period.

For example, EUR/USD is currently trading at 1.3300 and the ECB interest rate decision is minutes away. Your broker is offering a range option between 1.3280 and 1.3320 that expires in one hour. You think that the ECB’s decision is a non-event so you bought an “in-range” option.

If price doesn’t reach 1.3280 or 1.3320 within the option period, then you would have won your trade. That should be awesome news for you because range options usually have the highest payouts with a few brokers offering between 200%-750%!

Range options are best used when volatility is low, although some brokers offer the option to take risk on the idea that price WILL break out of the predetermined range. Alternatively, a few brokers also offer options on predetermined ranges that are far from the current market price.

02:48   by Unknown ·   0