High options are a type of binary options that can help you win a high percentage of your trades and make a steady profit.
Are high options right for you?
High options are a very potent asset, but they are not right for everyone. In general, high options appeal to a more conservative investor type.
High options allow you to make relatively save predictions. All you have to do is predict whether the market will rise or fall over a given period of time. Compared with touch options, which require you to also predict how far the market will move, high options are a much safer investment.
This safe prediction is, of course, also reflected by the payout high options generate. High options only generate a payout of around 65 to 85 percent, with most payouts being close to 80 percent. That means, when you win an option you invested $100 on, you will get your initial investment plus up to 85 percent back, in this case $85.
Compared to boundary options and especially touch options, high options are the slow and steady approach to trading. They are the perfect investment form for traders that prefer safety over the possibility of high gains in short time.
To know whether high options are right for you, you have to ask yourself if you consider making steady progress an advantage. With high options, you can grow your capital continuously. While this is an intriguing perspective, it is also a relatively boring task. Often, you will know long before your option expires whether you will win it or not. You will have a relatively constant growth of your overall capital. Everything will be real nice and neat.
Therefore, some traders might find that trading high options lacks excitement. Compared to high options, touch options are a roller coaster ride that will take you up and down quickly.
Strategies for high options
1. Trading the breakout
One of the most common used strategies to trade a high option is investing with a short to medium expiration time before, during, or after a breakout. Breakouts are significant events that create strong movements. High options are perfect to profit from this movement. Choose your expiration short to medium, somewhere around two to five periods of your chart, and you should be able to win a high percentage of your trades.
Breakouts are relatively common events that can be predicted securely. Nonetheless, you have to pay close attention to the market to find where they occur. Breakouts accompany the completion of chart patterns such as continuation and reversal patterns, or the market breaking through significant price levels such as trend lines or resistance and support lines.
2. Trading swings in a trend
Another very common strategy to trade high options is trading swings in a trend. In a trend, the market will constantly alternate between creating new highs and lows. To create a new high, the market has to move up. To create a new low, the market has to move down. Both movements occur in trends in both directions. The difference between an uptrend and a downtrend is which movement is more significant.
As a trader of high options, you can invest in an option every time the market turns from a downwards movement to an upwards movement. To find impending turnarounds, you can use oscillators such as the Money Flow Index (MFI). This type of strategy can create many signals during a trend and can help you make more money in a shorter period of time.
3. Trading an entire trends
Some traders try to follow an entire trend with their high option. As soon as they recognize an upwards trend, they invest in a high option with a long expiration time. With this kind of strategy, you are less susceptible to short market movements in the wrong direction that can destroy your trade although your general prediction was correct.
Therefore, some traders feel that they can trade this kind of strategy with a higher winning percentage while keeping payouts constant.