In binary options, trading in ranges is not a mere strategy. Apparently, price ranges can be the main determinant to set your order.

Usually, price ranges are put on a chart using support and resistance lines. They may appear differently for each trader and are only applied to help analyze price movement based on the range created by support and resistance levels. However, there is a unique trading type in binary options that positions price ranges not only as an analysis tool but also as a determinant in executing your options.

The trading type is often called range options. It is originally meant for just a variation from high/low options to make trading more interesting. But, it can also become a necessity when you want to be an active trader in every market condition. Unlike touch options that are more suitable for high volatile markets, trading in ranges is said to be useful when applied in a sideways market.

 

Market Analysis for Trading in Ranges

The reason why range options can be a good match for a sideways market is their condition that applies price range as the main reference for you to open an option. They are comprised of two choices, in and out option, in which "in" is the obvious type to seize chance in a ranging condition, while "out" is a condition where you would earn returns should the price goes out of the range. So, it is another alternative for you to have a chance when there is a potential breakout.

To identify which options should be put in range trading, you could use technical and fundamental analysis to look for market opportunities.

 

Technical Analysis

Bollinger Bands is one technical indicator effective for guiding you to find the right signals for trading in ranges. This tool consists of 3 channels that contract and expand based on price volatility. If you plan to trade binary options in ranges, you can look for when the bands tend to move sideways, not going upward or downward.

Bollinger Bands for Range Trading

Simple horizontal lines are also helpful to define the upper and lower ranges. If you put on those indicators just like how they are applied on the chart above, it will be easier for you to get the significant piece of information that helps you decide in choosing between in or out options. Even better, the upper and lower ranges provided by this strategy can be written as the price barriers if when you put in the options' details.

 

Fundamental Analysis

There is not much to prepare from the fundamental side. Since you need to ensure that you enter in ranging market, you only have to check the economic calendar and make sure to avoid the market during the release of high-impact news. But, this condition can trigger questions like:

Why do we still need to sidestep when we have an out option?

Isn't it provided for a breakout possibility?

The answer is that when the price is highly influenced by news releases, you will find yourself trading in a very volatile market. Prices can go up and down in a very short time, and analyzing their movement based on a couple of ranges will be very difficult. It can go inside or outside the range frequently so you'd better wait for some time until the price movement is more settled.

 

How to Start Trading in Ranges

Most binary options brokers only give an option to choose between in or out options without offering traders any chance to set their own price range. This is not exactly a negative aspect when you see it from the efficiency. In this case, you just need to adjust the price ranges given by the broker to your analysis result on support and resistance levels.

On the other hand, there are also brokers offering customized price ranges. This kind of broker provides barrier columns for clients to place their customized price range. This way, you can put an in or out option based on your determined support and resistance levels.

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Choosing a broker with customizable price ranges can be an alternative if you prefer to have more freedom in deciding your own ranges.

 

High Yield Boundary

Trading binary options in ranges is not only dealing with where the price will end up at the time your option expires. In fact, there are some varieties of which you can take advantage of if you really know how to. Such varieties came from High Yield Options.

This type of option offers high returns. If normally you can get a 70% to 90% payout, you will have the possibility of getting a payout as high as 100% to 500%. However, it is important to note that the higher the payout is, the tighter the ranges that are set by the broker. Furthermore, High Yield Options are only activated at the time when the price is most volatile.

Choosing this High Yield Option merely as an alternative to get better profits without any experience to back you up will only lead to great losses. Thus, it is much preferred to never take this kind of option unless you are equipped with advanced trading skills, experience, and well-thought analysis.

 

Know Your Risks

It has been a popular belief that every trade has risks. Whichever trading type that you use will always have a chance to fail. Therefore, it's important for you to try trading in ranges on a demo account before using real money. For a start, you may want to look for brokers offering free demo accounts and how much their minimum investment is per trade.