Identifying Profit Return Potential in Binary Trading Strategies

There are many reasons to participate in binary option trading.It doesn’t matter what background or profession you may have,binary option trading levels the playing field to all who seek to master it. This may be disappointing to some traders who have had great success in their own fields, only to find that the market doesn’t care at all. 

Whether you are a doctor, lawyer, engineer, homemaker, truck driver, pilot, soldier, and so on,binary option trading will demand all of your skills, as well as your emotional intelligence. It is also exciting, as it provides quick feedback on whether your trades are right or wrong. Yet, the dominant reason is that binary option trading offers profitable trading opportunities at frequencies and magnitudes rarely seen in other markets. This chapter provides a review of what the profit potential can be in the laddered binary option trading. Expected Probabilities

We can start from a basic description of the unique property of the laddered binary option. It is a fixed payoff of $100 per unit. This means that at any point in time, the value of the ask price would never be more than $100.As a result, we can derive the important outcome that is referred to as an expected probability. The easiest way to derive at an expected probability is

to look at the ask price. The ask price can be seen as an approximate measure of what the market believes is the probability of success. A $50 USD ask price translates into an expected probability of 50 percent that the binary will settle above the strike price associated with the binary. An $80 USD ask price can be interpreted as an 80 percent expected probability. Whether one is trading a weekly Binary Trading Strategies or an intraday option, at any given moment, the bid/ask range signals can be considered expectations of the market. 

The bid and ask prices represent a kind of crowd-mind that expresses the emotions of the market. It becomes a probability barometer measuring market opinion. These emotions become translated into the premiums paid for different strike prices. This aspect of the binary option market is perhaps its most profound feature.