The One Touch trade is the binary option trade that gives traders the most lucrative profit opportunities. The point with this type of trade is to accurately make a forecast whether the value of an asset will reach or go beyond a certain price level. The level of risk depends on the margin between the current asset price and the determined target price of the trade. Regardless, you can minimize the risk by utilizing a proper strategy that fits these type of trades.

One Touch Trades can give a stunningly high return rates, but they usually require a large asset movement in order to be profitable. For that reason, the best time to engage into One Touch trading is when it`s possible to forecast an upcoming price trend with some level of certainty. The strategy that we`ll describe below will help you to minimize any potential losses and simultaneously increase your prospects for profit.

Hedging Strategy for One Touch Trades

In regular type of trading, hedging is frequently used along with future contracts in order to keep safe from drastic drops in asset values. In binary options, hedging is made by opening a second trade. By doing so, you can significantly minimize any losses and even increase profits at the same time. Note that you should make sure to hedge properly, otherwise you might end up with a double loss.

To be able to do hedging, you should first conduct proper analysis and then prepare to open the One Touch trade. To illustrate, imagine that analysis shows that the value of the underlying asset is most likely going to go up in the coming week. Additionally to opening a One Touch Trade, you should also engage in a regular Put/Call trade with the same asset and buy a “Call” option, as you are expecting the price to go up. The expiration time for the regular option should be aligned with the analysis results regarding the expected increase in value.

There are three probable outcomes that should be considered. The first one is that the asset price follows the prediction. It hits the target price for the One Touch trade and goes higher than the initial value of the standard trade. Then you`d have a double win. The second outcome is that the asset value goes up, but it`s not sufficient to reach the target. In this case the Touch trade will result in a loss, but the standard one would result in a win. The last one is the one where the price goes down and leads to a double loss.

All of those outcomes might happen, but have in mind that you also conduct analysis and make a forecast. On most platforms, One Touch trades open with the markets on Monday and close with them on Friday. Make sure to match your research and analysis with this timeframe. If the “touch” happens during the working period, it`s considered as a successful one. Remember though, that your hedging standard trade should reach its expiration time, unless you decide to sell it before that.

Go Back

scroll_top
banner_bancdebinary