Every trader who trades in binary options is, of course, interested in earning as much as possible, and losing as little as possible. In order to make this possible, you want to become good at anticipating which way price of the underlying asset will go and to eventually buy an option that will win.
At the same time, always guessing is not so simple. To guess, you, of course, do not rely on luck, but on a sober calculation and a deep analysis of the market. Because only in this case you will be able to make a prediction with the execution probability of 60-70%. As practice shows, this forecast accuracy in most cases is quite acceptable, and if you develop a strategy with such level of accuracy and will thus properly manage the deposit, you can rest assured that your account balance will grow.
But what can you do if the price still went the wrong way, if your prediction did not come true? What are the things you can do to turn an unprofitable option into a profitable one, or at least make it less unprofitable?
We must say it rigth away that the small arsenal of methods to do this is a weakness of binary option trading. In the stock market, as well as currency market there are many opportunities to turn the situation in the desired direction. In particular, great opportunities are provided by the orders which can be installed in many different ways, so you can move, or just close your item without waiting until the price comes to ordered limit of losses and you lose a few more dollars.
All these features are usually absent on the market of currency options. At the same time, there are some tricks that may be well used by those who wants to win more and lose less.
Reverse investment
This is one of those techniques that can be used successfully in any market and with any broker. The idea is that you open a position in the other direction, if you see that the price goes not where you would like. For example, you bought a Call option for $ 10 and the price went down. If you buy a Put option for the same $ 10, then you are guaranteed to win one of these options. At least, that deal that you win, will help you offset the loss at least 75%. Experience shows that such a strategy can be applied very well in many cases.
Some traders turn reverse investment into their main strategy. How it works? Quite simply, in the morning you bouth, for example, an option to increase the price of the underlying asset. In the evening, a few minutes before the expiration of the option, you see how it’s doing. If all is well and the price is higher than it was, then you have nothing to worry about, and you can just wait until you get your money. If things are not so good – the price has gone in the opposite direction, and there’s no chance to get where you need to in the remaining few minutes – then you urgently buy a Put option, that is, for the reduction of price. For the same amount as your first option. One of these options is to win, so at least you don’t suffer a loss.
This strategy is not highly profitable, but it has its advantages: a small number of transactions per day (maximum of two), a small amount of time to devote to it, and relative stability.
