Binary options are an easy and popular method to trade the markets, without the difficulties of normal trading. Plus, you don’t need tens of thousands of dollars to get started. You may achieve returns of 60% to 500% in less than an hour!

We will concentrate on the simple, fixed-payout binary options provided by binary options brokers like AnyOption, StartBrokers, Binarix and others. We will use AnyOption binary options platform in our example, as they’ve the best payouts of any fixed-payout binary options broker we have found. You could trade stocks, indexes and commodities with binary options, but we’ll concentrate on the forex market, due to the ready availability of free charting packages and technical analysis resources for currency traders.

In a standard fixed-payout binary options trade, a profitable trade pays out between 60-70%, while a loss will result in a return of 15% of your investment. This means a total loss of 85% of your investment. A possible gain of 60-70% versus a possible loss of 85% doesn’t put the probabilities into your favor.

But, I will share with you a powerful hedging strategy that creates a “profit zone” with an overall positive expectation. By placing a Put (sell) option over a Call (buy) option, it’s practically guaranteed that at least one trade will be profitable. Because of our negative profit expectation, a simultaneous win and loss will result in a loss of 15%, while a win will result in a profit of 60-70%!

A possible gain of 70% versus a possible loss of 15% is a lot better than a possible loss of 85%! Here’s an example of how we could do this. Let us say we’re placing a Call option in an uptrend. As long as the uptrend continues, we will realize a profit at the expiration time.

But what if the trend reverses? This is the perfect opportunity to place our profit zone trade. Simply place a Put option in the course of the trend reversal. As long as the expiration price is more than our Call option strike price, but below our Put option strike price, we will receive an overall profit of 60-70% of our investment.

If among the trades finishes out of the money, we will see a loss of 15%, assuming that both trades are the same size. With these chances, we just require to win about 25% of our trades to make a profit. Without this strategy, we would need to win well over half of our trades.

This setup won’t happen all the time, but as long as you always trade into a strong trend, and keep aware for possible reversals, you should see a in general profit trading foreign currency binary options.

You may find out more about binary options platform here to help you with your forex binary options trading.