Asset Price Position Strategy

There is much to be learned by knowing where an asset price is located in relation to its historic highs and lows, as well as its most current support and resistance levels. This binary options strategy deals with these levels and can help new traders know just what action to take when asset prices are in various positions.

Note that there are various time frames that can be studied when researching asset price positions. For example, you could look at how the price moved within the last hour, last few days, or even the last year. Typically, the distance of price movement that you'll need to study is going to be based upon the expiry time you plan to select with your binary options trade. An example here would be Sixty Second trades, which are primarily reliant upon the most recent price movement.

With this is mind, take a look at a price chart that allows you to look back over the past price movement for the appropriate amount of time. Note the highest, lowest, and median price for that time frame. If you're experienced enough to locate the most recent support and resistance levels, examine these  as well. The median price is basically a middle ground, often representing the comfort zone for the asset price. Asset prices tend to try to pull back to this area after trending up or down.

The strategy is simple: When the price is near to its highest realized price, look for a Put call entry based upon a forecast that the price will start to pull back downward. When the asset price is near to its lowest realized price, get ready to enter a Call binary options trade based upon a forecast that the price will pull back upward. The same actions can be taken when the asset price nears or hits either the support or resistance levels. These levels may also be viewed for specific time-frames and should again be studied according to your expiry selection.

Top and bottom levels do not offer any guarantees, as asset prices can move past these levels. However, unless market sentiment is extremely strong at the time you trade, there is a strong likelihood that the price will top or bottom out and then reverse direction. Before entering into any binary options trades using this strategy, spend some time watching price behavior. This will show you what you can typically expect from asset prices when they near the aforementioned levels.

What about the median or average price level? Well, some type of shift in investor sentiment is needed to send the price into action. Keep up with market news and you're likely to spot the asset prices that are about to go into motion. Positive sentiment typically sends prices higher, while negative sentiment typically sends asset prices lower. Binary options traders can profit from any type of price movement, which means that you'll always be in a position to earn money so long as you track current events.