Opening price
Do you have trouble predicting the direction of the market? The opening price can provide you with fast and reliable signals about what the market situation will help you make money on binary options.
Like everything in our lives, basic concepts are the most important in helping you succeed. The same happens in options. And now there are traders who do not pay enough attention to the basics of trading and start trading right away, depriving themselves of income and success in options.
One of the main elements of the market, which is also often ignored by traders, is the opening price (abbreviated: opening). For many, the opening price seems like something ordinary, but it can provide you with valuable information with which you can earn. Any trader should learn how to see the opening price and work with it correctly even before learning complex technologies (for example, candlestick strategies, Bollinger bands).
What does it really mean to trade at the opening price?
The opening price is the first price at the beginning of the trading day. For exchange markets, every day the market opens, the opening price will be different. Currencies and commodities are traded throughout the week, so they do not generate opening prices every day, but generate it every week. The opening price is especially noticeable on the daily charts (for securities) and weekly charts (for currencies and commodities).
In theory, the opening price is the price of the first trades of the day. Since it determines relatively important statistical indicators, many traders use the opening price when making decisions. That is why for the main number of statistics, the average value of the first five trades is used in order to determine the opening price.
The opening price is interesting for binary options traders, as it allows you to look into the market segments that were created while the market was closed. Sometimes a strong opening price indicates factors that will push the market movement a few days ahead. If you know these facts, you can make significant profits from it when trading. If you already know the dominant direction of the market, then you just have to find a good opportunity to enter the market, and you can win trades by trading at the opening price.
Sometimes it happens that a strong opening price for the week can be formed due to the fact that large investors buy or sell a certain asset. Mutual funds, for example, own a certain amount of assets. When traders sell or buy such a mutual fund, the fund manager must sell or acquire the assets, respectively. A large number of these orders overnight can create a significant gap in the opening price in each direction.
How to Trade Binary Options at the Open Price
In order to use the opening price when trading, you need to understand what a significant gap means for an asset. Could it be just an accident or a real indication that there will be a movement in the market?
The only way to find out is to scrutinize the asset’s past, to find out if the opening gap indicates a strong movement in a certain direction, or will it close quickly?
Depending on the answer to this question, you will be able to determine whether you should trade on the gap when opening in the direction of the gap, for example, with options above/below, or you should use the gap strategy in order to make money on closing the gap. In any case, this is an opportunity to make money.
It is also worth remembering that the gap at the opening indicates the direction of the market movement more reliably than significant assets. With assets such as Microsoft or Google, many traders will place their orders overnight, making the orders of large investors less influential.
On the other hand, there are fewer orders with insignificant assets. Banks and mutual funds can create a significant movement in the market by making only one order. As a reaction to the resulting gap, many private investors will profit from the fact that the gap will soon close. Thus, the clearance strategy is likely to yield greater results when trading smaller assets. However, the final decision on which strategy to use should depend on the historical movement of the asset’s price.
Trading at the opening price with the broker Olympus Trade
For reliable trading at the opening price, we recommend choosing the Olympus Trade broker. The company offers its user the necessary functionality for comfortable trading: a convenient personal account, detailed analytics, an expanded set of indicators for technical analysis, a choice of options and expiration (from a minute to an hour), up-to-date market reviews and an economic calendar.
You can get acquainted with the current reviews about Olympus Trade here. You can see what the terminal workspace looks like in the image below.
A detailed review of the Olymp Trade broker is here.
Go to the official website of the broker Olymp Trade here.
In order to buy a
CALL
option in the Olymp Trade trading terminal, follow these steps by going to the olymptrade.com website and preparing an option by specifying:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: UP
- Click the “buy” button and follow the results.
In order to buy a
PCI
option in the Olymp Trade trading terminal, follow these steps by going to the olymptrade.com website and preparing an option, indicating:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: DOWN
- Click the “buy” button and follow the results.
Bonuses of the broker Olymp Trade
Working with Olymp Trade is not only comfortable, but also profitable, the broker constantly holds promotions and bonuses for its clients. Thanks to such additional opportunities, the chances of earning decent money increase, while not investing personal funds in trading.
Now the broker offers to take advantage of a profitable starting bonus for newcomers to the platform, which will double the deposit. The amount of the bonus depends on the amount deposited (according to the terms of the promotion).
Tagged with: Binary Options Strategy
