A boundary option is one trade option that gives four possible outcomes, depending on the broker that you are using. The trade outcomes are as follows: Here the option is in the money if the price action is outside the selected price boundaries on expiry. Here the option is in the money if the price action is inside the selected price range on expiry of the contract. Where the trader needs the price action of the currency to breach the selected price boundaries just once to make a profit from the trade.

This gives the binary options trader ample opportunity to decide which trade is best for him at that point in time.

Forex Trading Strategies

The first step in using this trading strategy is to decide on the range to use. Range trading works best when the market is consolidating or in other words, when the market is trading sideways and not trending.

The best way to detect a range-bound market is to use an indicator that shows you exactly in what direction the market is trading. One such indicator is the Bollinger band. Invented by John Bollinger, the Bollinger band has a lower band, a middle band and an upper band. The upper and lower bands show the confines of price movement in a consolidating market.

Take a look at the chart below to see the illustration:. Looking at this daily chart of the EURUSD, we can clearly see that between June 10 and 1 st September, the market was range-trading. The Bollinger bands reveal the range of prices between the price floor and price ceiling. Once you have something like this showing on your charts, use your horizontal line tool to trace two lines as shown.

What are the top technical indicators used for Range-Bound Trading strategies? | Investopedia

You now effectively have the 2 strike prices you need for your boundary trade. You can now decide on which of the four boundary trade option contract types to purchase, and set relevant expiry dates. Most brokers will allow a minimum of 7 days for expiry, so make sure that the period of consolidation will at least, exceed that time frame. If you use a daily chart like we did above in this example, you will be able to get enough time to set an expiry.

The boundary trade is not the only binary option contract that you can trade with this strategy. The bias here should be for a No Touch option contract , taking time to set the price barrier either to the upside or downside, well outside the range of prices as demarcated by your price floor and price ceiling.

This way, you are sure that the price action of the underlying asset has no chance whatsoever of coming close to your price barriers. If you need the price action to breach the boundaries, you can adjust your price barriers accordingly to make this happen.

Trading Strategies, Tips for Stocks and Forex | Trading Graphs

Trade Setup The first step in using this trading strategy is to decide on the range to use. Take a look at the chart below to see the illustration: Trade Types to Execute You can now decide on which of the four boundary trade option contract types to purchase, and set relevant expiry dates.

Forex trading | CFD trading | Trade FX Online | Currency Trading |cozosen.web.fc2.com UK

Final Note The boundary trade is not the only binary option contract that you can trade with this strategy. Demo Accounts Bonuses Low Minimum Deposit Brokers Charts Halal Options Trading Forex Options 60 Second Options Mobile Trading Apps Blog News. IQOptions Monthly Trade Data Helps Drive Your Trading Profits SpotOption Takes Steps To Meet Customer Demands Volatility At Historic Lows, Can The Bull Market Continue Market Outlook May 19 American Commodities Group Scam.

The information on this site is for general information purposes only and does not claim to be comprehensive or provide legal or other advice. The views expressed in contributor articles or on the forum are expressed by those contributors and do not necessarily reflect the views of BinaryOptions. Articles and other publications on this site are current as of their date of publication and do not necessarily reflect the present law or regulations.

Please note if you are from the USA: These companies are not supervised, connected or affiliated with any of the regulatory agencies such as the Commodity Futures Trading Commission CFTC , National Futures Association NFA , Securities and Exchange Commission SEC or the Financial Industry Regulatory Authority FINRA.

We warn US citizens of the dangers of trading with such entities and strongly advise that they take legal advice on this in the US.