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Low Volume Trading for Binary

The markets, which are nearly all closed today for the Christmas holiday, closed in positive territory on Friday. US markets specifically closed Friday in a very optimistic fashion as the DOW was up 1.02% to 12294 and the NASDAQ closed up 0.74% to 2618. The S&P managed to climb 0.9% to 1265. However, the EUR/USD has been virtually unchanged since mid last week. The forex pair, which is one of the most popular binary options, has been remarkably stable over the last week and is trading near 1.3060.

Trader alone in the market. You are not alone today in the market, but one of a very select few. Holidays have caused almost 75% of volume to drain out of the market.

Trader alone in the market. You are not alone today in the market, but one of a very select few. Holidays have caused almost 75% of volume to drain out of the market.

Binary options traders tend to trade forex as well which is no surprise seeing as how both financial products compliment each other. While trading forex, you need to be right both about

  1. the direction of the market and
  2. how far the market will go in that specific direction .

With binary options you only need to be right about one of those 2 questions. So it makes trading more interesting when you can take a position with a financial instrument like forex while hedging your position with a binary trade. Or the other way around.

So on a day like today where all markets are closed but trading on some forex pairs is still available, trading with binary options could be the right way to go.  However, your choice is very limited today. Trading the EUR/USD profitably may be close to impossible with ABOVE/BELOW options. But because the market is barely moving and the holidays have caused a reduction in volume by a factor of about 75%, a RANGE option may be the smartest move. Even more than a TOUCH option. The reason is because a RANGE option doesn’t care if one boundary is touched or not, the market just needs to complete the day within those boundaries. However, with a TOUCH option, if one of the boundaries are touched, your option will expire outside-the-money.

 

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