Binary Options Gap Strategy
Gap strategy
If one wants to trade binary options, it is very important to find a suitable binary options trading strategy. Nowadays you can find a vast variety of strategies focusing on different aspects of trading. Below we are going you to explain how to implement a gap strategy, one of the most popular and simple strategies.
Gap strategy? Whats that?
From time to time assets make big, unexpected movements which cause price jumps. Such jumps leave gaps in stock price charts. They usually take place after trading pauses, when trades are stopped for a night, weekend or holidays. Sometimes such gaps are the result of some breaking news. The most common gap instance: in the evening a stock is closing at, say, $99 and the next morning it is openning at $103, so, we see a $4 gap between these stock prices.
This binary options trading strategy is very interesting. If we see a situation like that one in the previous paragraph, we can suppose the price growth will cause some growth in the quantity of those who want to sell the asset, while the quantity of traders who want to get it drops.
So, when supply exceeds demand, the price will decrease and often it will drop to that closing price of the previous night, and the gap made by it will be closed. As to downwards direction, we see the same approach work.
Trading gaps
If you know and understand the approach according which the gap strategy works, you may utilize it for your successful trading. In this instance you should seek for overnight, weekend, holiday or news gaps in Forex. As soon as you find one, you are able to forecast the asset price movement direction and convert your knowledge into profit. Gap trading can be used in binary options of several types, e.g: 60 or 30-second option where you can buy in the direction opposite to the gap. Timing is the key to implement this kind of trade successfully. Unfortunately, the time cannot be found anywhere, it can be only learnt from your own experience. By the way, our demo account will definitely help you to hit your stride in this strategy before you invest your own money. When you have to do with a big gap, you may utilize a touch option. Having analyzed the gap and the preceding it price movement, you may even utilise one of the two options: High/Low, if the gap is large enough for one of the options to expire. Remember, all options bought on this type of strategy should expire less than in a day. This binary options trading strategy is not able to forecast something further than a day. We also recommend you to try this strategy with a demo account and only after that invest real money.
