Tunneling trading strategy in forex cfds and binary options
This is not the volume of the asset in total; it is the quantity of an asset which is being moved between people. An asset which has one hundred units and ten of them are being traded does not suggest a market which expects something to happen to the value of the asset.
However, in contrast if ninety or the entire one hundred units are being moved then there is something worth looking at.
It is important to remember that the volume of an asset is across the entire market, not just the amount being traded by your binary options broker. If you believe you have located an asset which is being traded in volume across the market then you may want to join in and make your own trade.
The first step is to locate an hourly chart which shows your specific asset. You will then be able to see the candles on the chart, showing the highs and lows of the asset. The last candle for a bear and bull market should be looked at more closely. You will need to calculate the average for the peaks and the troughs of the asset. Once you have completed this draw a horizontal line through the lows of your candle and the highs of your candle.
You will then have created your boundaries, the majority of assets will not move outside of these lines. If the asset you are looking at is very close to one of the boundary lines you should consider placing a trade which is the opposite of the current trend. Alternatively, if it currently near the middle but moving in one direction you could place a trade with the asset movement.
Volume is an important technique to confirm the way you are reading the chart and your gut instinct. If there is a large amount of movement on the market then many traders have picked up n the upward or downward trend of an asset and are attempting to make a good return trading its trend.
By combining the volume with the highs and lows on the average price candle you should be able to predict the turning point. Once you understand this theory you will be able to locate assets which move in this way, there are a number of currencies which generally move in the same direction and precious metals will also often display this trend.
The best way to trade with this strategy is to place two trades at the same time, one on each of the correlating assets. The trades should be viewed as separate transactions; each one will provide a return or a loss. Ideally they will both move in the expected direction but if only one does you will either minimize a potential loss or still manage to make a profit.
It is this approach that can make it a very successful strategy. Perhaps the greatest benefit of this approach to binary options trading is that the tactic can be used on any type of asset. Some experts even recommend that you use two different accounts as this then becomes a more efficient and effective strategy. Of course, as with any strategy there will be some risks or disadvantages. The biggest issue is that this cannot be used as your main trading option.
It is an excellent way of supporting your investments and minimizing risk, but it will always need to be part of a bigger strategy. This should not put you off using the strategy, it can be used to help reduce losses or to extend your investments at just the right time without overstretching yourself.
It will take a little practice to get the technique right, but once you have mastered it you will find it an invaluable help; done correctly this tactic will increase your return on investment. Subscribe To Trading Secrets. Tunneling Binary Options Trading: