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The ASBOCT is an advanced strategy because it requires you to use a binary options broker that offers Touch Options and a classical forex broker (or CFD broker if you want to use it for commodities, indices or stocks). We recommend using 24 Option or Option Fair for the touch options and any of the following brokers for the classical trading: Markets.com, Plus 500, Ava FX, Finexo or UFX Markets. This strategy is very difficult to use for US traders because they will have a hard time finding a good forex broker, but if you are from US and already trade with a forex broker, you can use it as well. To understand this strategy you must have good knowledge of traditional forex trading. If you don't know the basics of traditional trading then this strategy is not for you. This strategy is pretty similar to the TOSNT in the way that it is best used when market moves are expected. It can be used before news releases or in very volatile market conditions. If your technical analysis detects a possible burst in one direction of the market, but you don't know in which direction, this is another good moment to use this strategy. Now, that we have described the necessary situation in order to make this strategy effective, we will explain how it works. The touch options are used to hedge the trade that is executed on the normal trading platform. That means that the option's payout must compensate for the loss incurred if the stop loss is triggered. This will give you a risk free trade before the option's deadline. Since this may sound pretty odd, we will give an example to make it easier to follow: You trade on EUR/USD and the market is at 1.3500. You expect big movements in the next 30 minutes. The binary options broker offers you a Touch Down option that will pay 250% profit if the price hits 1.3475 in the next 30 minutes. If you trade with a standard lot on EUR/USD, one pip will be valued at exactly $10. This means that a Stop Loss order of 25 pips (set at 1.3475 just like the Touch Down target) will incur a $250 loss. If you buy the Touch Down option with $100 you will hedge your Buy order of one lot perfectly. If during the next 30 minutes the Stop Loss is triggered you end up with no loss and no profit, since the Touch Down option compensates the loss of the trade. Now let's see some possible outcomes and analyze the results. Here is what can happen in the 30 minutes when the option is live: Outcome 1: The market moves UP with 50 points and you close the trade with 50 pips of profit. You have a profit of $500 from the trade and a loss of $100 from the option. This means a net profit of $400 Outcome 2: The market moves UP with 30 points. You have $300 profit from your trade and lose the option, so you end up with a net profit of $200 Outcome 3: The market moves UP with only 10 points. In this situation your trade ends up as break even.
Outcome 4: The market doesn't move at all and stays at the same value. In this scenario you lose $100. Outcome 5: The market moves DOWN only 10 points. In this unhappy event you lose $100 on the trade and $100 on the option resulting in a loss of $200 Outcome 6: The market moves DOWN with 30 points. Since both the Touch value and the Stop Loss are hit (they are the same) you will end up as break even. Outcome 7: The market moves DOWN with 50 points. You end up with no profit or loss just like in the Outcome 6. Now let's analyze a little the results. As you can see, if the market moves up more than 10 points you are in profit. The more it moves, the higher the profit. At only 30 pips you have a $200 profit, and this can go much higher in the case of high moves. If the expiry value is between -24 points and +9 you end up losing. The loss can be between $340 (worst case scenario when the market is at minus 24 which is extremely unlikely) and $10 if the market ends at +9. As you can see the potential loss is limited while the potential profit is unlimited. If the market moves down more than 25 pips you don't win or lose anything.
Now remember that this strategy is recommended to be used at news releases or in very volatile moments. In this type of situations it is very unlikely to have market movements of less than $25. The higher the market moves, the better the strategy is. To see exactly how profitable this strategy can be, you should check the profitability chart.
Now that you have read our strategy disclaimer, we will describe how this simple strategy works. This is a betting strategy that is based on the fact that the market cannot move in the same direction in too many consecutive periods. As you know, the market goes up and down, and this is why this strategy is very effective on binary options. Using this strategy, you will start from an initial investment amount and increase it every time your option expires out of the money. You will continue to buy the same option on the same asset one after another, at a higher value. This way, you are certain to win after maximum 3 to 5 options, and because of the value increase you will recover all previous losses and generate profit as well. Here is an example, of how this strategy works. You buy a Call option on Gold with the payout of 85% and no refund. You invest $100 in this option. If you win you get a profit of $85 and immediately purchase a Put option on the same asset (gold in this case), right after the expiry. If the market goes down and you win again, you buy a Call option. If the market goes up and down all the time you win $85 at every cycle. If the market moves against you when you bought a Call option and you lose, you immediately buy another Call option worth $250 (2.5 times the initial value, if your initial option has a different value). If you win, you will get $212 profit that will compensate for the initial $100 loss and still give you a $112 total profit. After your win, you start again with the value of $100 in the opposite direction. In the unlucky event where you have two losses in a row, you continue in the same direction with a value worth 2 times the previous one ($500 if your initial option was $100). If the option is a winner, you will get $425 in profit that will cover for the initial losses of $100 and $250 generating an overall profit of $75. After every win, you start again on the opposite direction with the initial value. Since markets cannot move in the same direction too many times in a row, you are sure to win with a few tries. This is why this strategy it is called grinding: because every time you win an amount proportional to your initial investment. Whenever you lose, you increase the bet amount by 2.5 or by 2, depending on the sequence. As you can see this strategy cannot fail. The only thing you should worry about is your total capital, that must be large enough compared to the initial investment in order to be able to cover a few consecutive losses. Other things you should consider when using this strategy is the maximum value allowed by the broker, and the time the market stops. Make sure you have at least 8 sequences before the market takes a break. If you trade using 30 minutes options, you should make sure there are at least 4 hours of trading ahead.
For more information about the capital needed and the maximum drawdown using this strategy, check our tables below: Round Investment 1 2 3 4 5 6 7 20 50 100 250 500 1,250 2,500 Loss (20) (50) (100) (250) (500) (1,250) (2,500) Win 17 43 85 213 425 1,063 2,125 Total if loss Total if win (20) (70) (170) (420) (920) (2,170) (4,670) 17 23 15 43 5 143 (45) Round Investment 1 2 3 4 5 100 250 500 1,250 2,500 Loss (100) (250) (500) (1,250) (2,500) Win 85 213 425 1,063 2,125 Total if loss (100) (350) (850) (2,100) (4,600) Total if win 85 113 75 213 25
Profit table when the first option is bought at the price of $100
Profit table when the first option is bought at the price of $20
Whether or not youre a beginner investor, you can gain much profit from this strategy if youre quick with your wits and are capable of noticing small details. These small details may help you in the end. Investing isnt really about all the luck you have or need. Its about how much practice and experience youve had when it comes to making split second decisions. If youre not accustomed to making split second decisio ns, perhaps investing isnt for you. If learn how to invest properly, you may be rewarded with more profits than you know what to do with. However, be very careful that you set limits.
investing, you may be tempted to invest it into something bigger and better. Avoid this temptation and only use a small percentage of the payout to do this. After all, assets and commodities are only predictable to a certain extent. No one strategy is going to be a hundred percent accurate. Take this into account and save yourself the trouble and the potential financial loss.
Who Is The Method For?: If youre just starting out with investing, you should probably pick a simpler strategy to follow. While the Straddle strategy may seem appealing because of the potential, it will not be as rewarding if you dont understand the strategy completely. Beginner investors should do everything they can to learn more about the various investing strategies that are available to them. If an experienced investor wants to utilize this method for their best potential, they will have the know-how that it takes to find the best setup to utilize this clever strategy. What Can I Expect If I Utilize This Strategy?: One of the things that makes the Straddle Strategy so popular and respected is because of its reputation of taking ordinary investors into wealthy investors in a short amount of time. The profits are literally unlimited and the loss is limited. What more could you possibly ask for?
If youre unsure of whether or not the Straddle Strategy will work for you, consider trying it out on a demo account. If you get yourself into a mess, the losses will be minimal and easy to recover from. If you know a few investor friends, consider asking them for advice on how to use this method to your advantage. You may be lucky enough to learn a thing or two. The technique isnt new. Its been used successfully for man y years to help advanced investors obtain the income of their dreams. The top leading experts who use the technique have suggested to use it often. If you want better success, be sure to set your price to reflect the current market.