This is the one of the most commonly used strategies in the binary options trading. The ladder binary options strategy is one of the most reliable due to its strict connection with the analytical approach towards the prediction of the price of the assets. Furthermore, as you will see from the description, this strategy is one of the safest, it clearly defines time when you have to switch from Put to Call and the other way around.
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Binary Options Ladder Strategy Details
The basis of this strategy is an assumption that the price over time will move by pre-defined levels going from the previous to the next, either up or down as a ladder.
So, in order to implement the binary options ladder strategy you have to construct the pivot point table for the particular instrument. Pivot points are a well-known technical analysis tool and analyzing pivot points is done via pivot point calculator. It has to be mentioned that the pivot point table is not a suitable instrument for the beginners, so be sure that you understand the risks before you start using the binary options ladder strategy.
The next action of the binary options ladder strategy implementation is the evaluation of the trend that is dominating the particular asset. If it is observed that over particular periods of time the price of the instrument is above the level calculated by the pivot point table, than the asset is in the bullish trend. Then this is the right time to Call on this instrument.
In case of the price being below the levels shown in the pivot point table – the binary options ladder strategy has to be implemented vise-versa. So Put order has to be executed. This is done due to the assumption that the asset price is in the bearish trend.
If the price of the asset does not go above or below the levels shown in the pivot point table – the ladder strategy cannot be implemented. In such situation you will have to find the other instrument or just take a break from the binary options trading and get some tea or coffee. Or, hopefully a bottle of champagne to celebrate your previous binary options trade : )
Binary Options Ladder Strategy Example
Let us assume that you currently analyze USD/JPY instrument. The current price is at the level of 121.30. The constructed pivot point table shows you that the next upper price level is 121.43. After observing the instrument, you see that the price broke the level of 121.43 in 30 minutes.
So what to do now?
The trend is bullish and using the binary options ladder trading, it is predicted that the next levels in the pivot point table of 121.56, 121.69, 121.82 will be achieved in the next 30 minutes, 1 hour and 1 hour and 30 minutes. So this is the right spot to get a call order and prepare to gain some profit.
If the price of the USD/JPY does not break the level of 121.43 in 30 minutes the binary options ladder trading should not be implemented for the next level and you should not make any orders.
But what if the price broke the level of 121.30 in the next 30 minutes? This is the perfect spot for making a Call order since the trend is bearish and it is highly likely that the price will go down by the ladder to the next low value in the pivot point table.
fa-icon You have to understand that the binary options ladder strategy is made for professionals and has to be taken with the caution. Also, Binary Options Hub recommends to get a lot of experience on a binary options demo account before engaging into binary options ladder strategy. This strategy is perfect if you know what you do and when you can afford at least 50 binary option trades.
Binary Options Ladder Trading Strategy Conclusion
This is a great binary options trading strategy and it should be adopted and tested by everyone who wants to achieve success at binary options. As this strategy requires lots of trades, it is recommended to choose a binary options broker with the highest payouts on regular options.