Identifying Price Targets for One Touch Binary Option Trades

When trading long term, using One Touch binary options, it is essential to identify early, before even making the trade, a realistic price target. It is difficult to be accurate all the time, but the payout of these trades is substantially high, and just one winning trade can cover the cost of as many as 10 losing ones. There are several ways to anticipate and predict price targets but none of them gives you a more accurate price target than the indicator described below.

The One Indicator you need for Figuring Out Price Targets

One simple indicator that can help you identify potential price targets is the Bollinger Bands indicator. The market will often bounce from one band to the other, maybe in a smooth trend or maybe in a more volatile trend. But when the trend is smooth there's no time being wasted and every day works in your favor. For example on the chart below, if one was to trade the rally starting from the low green arrow, they would have to set a price target of around 1.3700 - 1.3750. Since that was the price target suggested by the upper blue band line at the time. And they would have to approximately work out the number of days required. Once that is done, the trader can set their one touch binary options and maybe even split their risk capital over 2 or 3 trades. These trades should all have the same price target of 1.3700 to 1.3750 maximum. But they can have different expiry dates, one for example having the exact number of days that the rally was expected to take, another trade with few more days in expiry time and one more trade with an even longer expiry date. This way, if things were to go wrong time wise, and the rally took more days to reach the price target, one of the three trades would not end up in the money (even though it would still be closed at significant profit in the early days). But at least one of the other two trades would end up in the money, and would have yielded maximum payout!

You need to realize though, that the Bollinger Bands indicator cannot be used as a stand alone indicator. Just because price touches one of the band lines, it doesn't necessarily mean that the market has to reverse there! You will have to use your own research and more indicators, to determine possible market direction. What the Bollinger Bands indicator tells you is that if the market does make a move, away from the band line it has just touched, it is very likely to reach the other band line. And this helps you identify potential price targets! This comes with a great amount of accuracy in terms of market price. You don't have this advantage with momentum indicators that are simply giving you a meaningless overbought or oversold reading, without any future price hints.

For traders who wish to carry out One Touch type trades, but also want to be able to hedge those using the same or a different broker, please read our articles on hedging techniques. Whatever you choose to do with the Bollinger Bands indicator, it is going to be very helpful to you. Because you will have an exact price target, or a narrow price target zone which once reached or approached, tells you that you should take profits and get out. When the target is reached on One Touch options you automatically win the maximum payout and the trade is closed. When the target is only approached but you are still off by a small margin, you will be in partial but still big profit. It is worth closing the trade early and locking in that profit. It is not worth waiting out few more days because if your expiry date is tight, and the market makes a time consuming correction (which usually happens) before finally hitting the target, you risk giving back much of those profits or losing it all.