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Binary options are becoming increasingly popular as a high-risk, high-reward trading option. Since there are many different types of binary options trading, it’s important to understand the available options before you start investing in them. The more you know about the different types of trades, the less likely you are to be scammed.
7 Most Common Types of High/Low Binary Options Trading
One of the most common types of binary options trades is known as high/low options trading. It is also one of the easiest types of trades for novice binary options traders to understand and execute successfully.
In a high/low trade, you look at an asset and decide whether its price will be above or below the current price at a specific expiration time. Expiration times usually range from a few minutes to a few hours, with most binary options expiring on the same day.
If you believe the asset’s price will be higher at a given time, you select “High” for the trade. If you think the price will be lower, select “Low.” If you’re correct, you can typically earn a return of 60% to 90% on your initial deposit. If you’re wrong, you gain nothing.
One Touch/No Touch
One-touch/no-touch binary options trading is slightly different from high/low trading. In this type of binary options trading, you bet on whether the price of an asset will reach a certain price point before expiration. One-touch/no-touch trading is riskier, but if you’re right, the potential ROI can be as high as 300%.
Boundary/Range
A boundary or range call is a type of binary options trade where you bet on whether the price of an asset will stay within a specific range or move beyond that range before the trade expires.
Boundary/range trading carries less risk than high/low and one-touch/no-touch trading, especially if the asset you are trading does not typically experience large price movements. They also offer around 100% returns if you win, making them a potentially more rewarding binary options trade than high/low trades.
60 Seconds/Short Term
Short-term binary options trading is a niche type of binary options trading that takes place over a very short period of time. These trades are usually only 60 seconds long, which is why they are often called 60-second binary options trades.
Short-term binary options trades are typically high/low or one-touch/no-touch trades. However, due to the short trading cycle, this type of trading is much riskier than other types of high/low or one-touch/no-touch trading.
Long-Term
Long-term binary options trading is the opposite of 60-second trading. In these transactions, the trading cycle often lasts for days, weeks, or even a month. If you have some trading experience and market knowledge, these longer trading hours make it easier to predict an asset’s price movements.
Therefore, long-term binary options trading is popular among experienced traders. However, it’s not as popular among brokers and new traders, who prefer faster action and quicker returns.
Ladder
Ladder trading is one of the most complex types of binary options trading. In these trades, there are multiple expiration times and prices during the trade. You must bet on whether the asset will reach different points along the “ladder” at certain times.
Each time you are correct about the price the asset will reach at a specific expiry time, you receive a partial payment. If you’re consistently right, you can earn over 100% return on investment. However, since you’re betting on many different outcomes at the same time, it is easier to make mistakes. Ladder trading can be rewarding, but it takes time to learn how to trade effectively.
Pairs
Pairs trading differs from other types of binary options trading because you’re looking at two assets per trade, rather than just one. In pairs trading, you bet on the performance of one asset relative to another. In other words, you must decide which of two assets will perform better than the other at the time of expiration.
Please note that, in this type of binary options trade, it does not matter if the price of the asset rises or falls during the trade. All that matters is that you are correct about how one asset will perform relative to another.
Which Binary Options Trading is Best for Me?
To choose the type of binary options trading that’s best for you, the first step is to make sure you understand how all the different types of trading work.
The best way to protect yourself and your loved ones from scams is to be extremely cautious of what you see on social media, especially if the person on the other end is trying to sell you something.
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