In this example, Gail shows how she enters both volatile and directional trades using binary options. In this case, she enters volatile trades based on the Crude Oil Inventory Report and a directional trade on the AUDUSD using binaries.
Volatile and Directional Trades Using Binary Options
In the TradersHelpDesk live trading room this morning, Gail Mercer, founder, enters both a long and short on Crude, both a long and short on the USDCAD, and a directional on the AUDUSD using binaries and spreads. Although her bias was to the short side on Crude and to the long side on the USDCAD, with a market report, anything can happen. She limits her risk to under $40 for both trades leaving a potential for profit even if she loses on one side, which is likely to happen.
However, on the Aussie trade, with bearish trend divergence appearing at the ATR, she does a directional short trade.
Volatile and Directional Trades Using Binary Options Results
The results from the trades (based on trading one contract) were:
- Crude > 63.55 short, profit target at $15 hit
- USDCAD > 1.2527 long, profit target at $85 hit
- AUDUSD > .7858, short, exited at $43.75
- Crude Long Spread at 64.00 – 65.50, loss $12
- USD/CAD short, loss of $15
Overall Net Profit for Morning: $120.50
Risk to Reward Ratio Achieved: $1 to $1.23