It should be noted that the strategy of Two chairs is available for trading only in broker systems, which allow the early closing of the option. This option is applicable to transactions, during which you understand that the price of an asset has gone in the opposite direction from your forecast price. Here, the most acceptable option is to close the deal ahead of time, selling the option back to the broker. The price of the option will be noticeably lower, however you will lose only part of your money. Let’s take a closer look at what strategy is. Two chairs.
Trading Binary Options with Strategy Two Stools
There are several varieties of this strategy, but the main idea is that you simultaneously open two options — one for purchase, another for sale for the same period of time. Next, you should closely monitor the price schedule.
If by the time the option is closed, the price has gone in one direction, you close the option in the direction of the opposite side ahead of schedule. Thus, you make a profit from the correct forecast, plus you return some of the money from the wrong rate. In case of early closure you will lose 10% -20% of the investment made.
Double investment strategy Two chairs
This strategy is a more complex transaction scheme, but it is understandable for implementation in practice. After you sold an unprofitable option that is open in the opposite direction from the movement of the real market price of the asset, you are not just waiting for the end of the deal, but buying one more option in the right direction.
Thus, you not only minimize the risk of erroneous investing, but also profit from the adjusted shake. This approach to investment is used by both beginners and experienced traders. Because this is a real chance to minimize risks when trading binary options.
The most significant factor in applying the trading strategy Two chairs is the ability to predict the correct direction of the movement of the price of the asset. Therefore, many traders prefer to conclude transaction data for currency pairs, or for indices. However, here no one gives a guarantee on the behavior of the price of the asset, so only a preliminary analysis will allow you to make more profitable and accurate transactions.
Despite its simplicity in theory, the Two Stool strategy has a number of pitfalls in practical application. That is why be careful when choosing an asset for trading and making forecasts, because this way of trading carries a certain risk. However, like all strategies and transactions of binary options.