Here is a binary signal example of using an OTM binary for the binary signal that was issued this evening. instead of always using ATM. I love using the OTM because it lowers risk but increases profits. While I may lose on some, the profits make them worth it for me.
Binary Signal Example
First, the signal came out on the AUDUSD at 7:00pm. Immediately I went and looked to see what was available.
Instead of using an ATM, I noticed the OTM (1 strike out) was only $26.50 in risk. I opted to take that one because the strike width on the AUDUSD is only 4 pips.
Does it guarantee a profit? No binary guarantees a profit. If price sits where it is for the next two hours then I lose the $26.50. If price goes against me, I lose the $26.50. If price moves down to my strike (.7620), then I will have a risk to reward of 1:1. If it moves 1 strike below, then typically I will have 1 : 2 in risk to reward. If I allow it to expire and it expires in the money, then I will have almost a 1 : 3 risk to reward.
Do I always use the OTM? No, I weigh the risk with the “how much” the market needs to move to get there. However, this is a great binary signal example for using OTM binaries.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.