While
support is nothing more than a price level that is opposed to the continuation
of a downward trend resistance is a price level, which hinders the continuation
of an upward trend.
These
two levels can be exploited very efficiently when you decide to open a position
with binary options.
Take
for example the investment made two days ago due at the end of the week, and
weekend mean the trading week, so until Friday. '
The
first resistance of USD/JPY was identified at 78.80 so the advice was to
invest 2% of the capital with a PUT option (down)
As
we put the deadline to Friday '19 we were monitoring the investment and we see
that during the night USD/JPY has passed the first resistance going to land
on the second resistance, identified in 79.00
In
this case, how do you act?
Very
simple, you have to open another location in fall with the same maturity but
with twice the capital, then, before we used 2%, now let's say 4%.
This
will allow us' to go to earn at least the second position by covering the
losses of the first and closing in profit.
I
take a practical example that always helps. Newcomers to the world of binary
options are self-explanatory clear and concise, but they learn fast!
- First investment: $ 1,000 Discount
- Second investment: $ 2,000 Discount
- Total invested: $ 3,000
Assuming
only the second investment will go 'successful 85% of $ 2,000 = $ 1,700
$
1,700 minus $ 1,000 loss (worst case) = $ 700 profit.
Here
you can see from the graph that the investment is going well and that the trend
is following the rules of the resistance.
The
next resistance is spotted at 79.21 so if it goes up follow the same strategy,
open a Put with long term expiration, we put 19 of October to be safe, using a
money management of 8%.
If
you also want to receive the advice on which investments to make just subscribe
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Good luck and see you on the next trade!
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