Double Touch Binary Options Strategy- a Complete Analysis

Double Touch Binary Options Strategy- a Complete Analysis

There are numerous types of binary options strategies, that are offered by different trading platforms. Double touch option strategy is a commonly implemented binary option strategy. It is also called double one touch strategy, and is offered by most of the renowned platforms.

What is Double touch Binary options strategy

Double touch strategy is like one touch strategies, but with two prices. In case of one touch you need to select one price level, if the price change touches that level the trade ends up in a win. Similarly, this option allows you to select two different levels, both in opposite directions. This increases the probability of getting wins for the trader, since the trader gets to select two prices rather than one.

Framework of the strategy

In double touch binary options strategy, the person gets to predict two different levels. It is suitable when the trader cannot predict the direction of the change of prices. After due fundamental and technical analysis, the buyer can select two different price levels. The analysis allows him to determine the price ranges, and choose the correct range. The motive behind is that the price should touch one of the two levels selected by the trader. If the price crosses one of the two levels before he expiry time ends, the trader makes a profit. On the other hand, if the price does not cross the two points, then a loss is incurred by the trader.

Types of levels

In double one touch binary options strategy, there are two price levels or barriers. These are:

  • High barrier/ Upside barrier– this is the price level that is above the current price of the asset. It is expected that if the price increases, it will be at least on that level or higher than it.
  • Low barrier/ downside barrier– this is the price level selected below the current price. The trader expects that if the price of the asset declines, it will be at that level or below it.

Example of Double touch Binary options strategy

A better understanding of this can be achieved with the help of an example. Let us take the pair of Dollar vs Euro, and assume that the rate at which both are traded is 1.5. After analysis of the pair, it is expected that the prices will change in the next week, but the direction of the change is unpredictable. In such a case, a trader can opt for double touch strategy. If the trader expects that the change in price will be above 1.6 or below 1.45, he can select these two rates as his upper and lower barrier; with an expiry time of a week. If the asset price crosses either the 1.6 or 1.45 level, anytime before the expiry time is over, he earns a profit. If the price remains between two levels, then the trader loses his investment.

When to use Double touch Strategy

Although, double touch option strategy is a useful method of trading, which increases your probability of you winning; but this occurs under certain circumstances. This strategy should be made use of when the following three things occur:

  1. Fundamental and technical analysis skills: The trader has enough knowledge, skills and data to know that the price will change, but the price might shift at any time. He should have researched and knowledge to make correct predictions about an asset based on fundamental and technical data.
  2. Expected price breakout: This strategy is highly effective if it is expected that the price will not remain stable and will keep on increasing, or decreasing. The price might cross any level at any unexpected time.
  3. Market volatility: If the market is unstable then even minor changes in the environment can have great effects on the price of the asset. This makes the price unstable and unpredictable. The double touch neutralizes the effect of this to some extent.

2 Responses to “Double Touch Binary Options Strategy- a Complete Analysis”

  1. Excellent website. A lot of useful info here. I am sending it to a few buddies ans also sharing in delicious.
    And of course, thanks in your sweat!

  2. steve says:

    Do you know of any broker that offers this instrument please? All the major ones seem to have scrapped it.

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