The Boundary strategy, as well as any strategy using trend lines, does not require additional indicators. In order to apply it you should be able to conduct trend lines.
You can trade boundary options at a trusted and reliable broker delivering fair price ranges. High Yield boundaries are paid up to 350% return.
We continue the series of articles about binary options trading strategies. All of them are somehow similar to each other in that they do not require special knowledge of technical analysis. The same can be said about the Boundary binary options strategy. This trading system is very simple in both terms of detection on the chart and applying it in real.
How to conduct the trend line?
To determine how to conduct the trend line is quite simple. If minimums are constantly increasing, on the chart is observed an upward trend. In this case, the trend line can be carried out by the two minima. In the case of a downward trend – the line is drawn from the decreasing maxima. Let's take a closer look given us by a screenshot of the following graph.
The first figure below shows that the market had firstly developed an upward movement, but then there was a break of the trend. From the theory of technical analysis we know that often, after a strong resistance or support breakthrough, the price subsequently tries to achieve these lines for re-testing on the reverse side.
Price, after the first line of support breakthrough moved further down and then came back and tested the resistance (former trend) from the bottom up. After an attempt to break through the resistance line failed, the price continued its downward movement.
In principle, such patterns are observed often enough on the charts, so you can apply this strategy almost every day.
How to trade at support and resistance boundary?
In the previous part of this article, we discussed the formation of a trading signal within the described strategy. But of course, most of the readers are not interested in the process, but in the actions during the entry time of the transaction. Although in order to buy exactly the option that you want, it is desirable to see the situation in the complex.
So, you need to prepare for the transaction as follows. First of all, the trader sees on the chart a similar situation when, for example, an uptrend line breaks from the top down. At this point, it is early to buy a contract as a breakthrough should be confirmed by another test line from the bottom up.
Buying a Put option is carried out when, after testing, the price bounces off the resistance and secures below.
Up to this point, it is best to stay out of the market, as there are situations in which the price tests the resistance, hits it and returns in a rising channel.
In principle, the same thing happens with the purchase of a Call option using this strategy. Only the previous trend should be downward. Once the price breaks the trend line from the bottom up, it can come back to it and test again.
At that moment when the price fails testing, bounces off trend and secures above, you need to buy a Call option.
This strategy could be very profitable for you if you learn how to determine price trends, resistance boundary and support boundary. You can trade High Yield boundaries with up to 350% return in the money.