The ladder option for binary trading is a newer type of trade, but what is it? It’s a type of option where the trader has a range of price levels to choose from. Those price levels are lined like a ladder at equal intervals. At the end of the trading day, the trade must finish lower or higher than the price level. Perhaps more simply, the market must rise above a particular price level during a certain period and while the trade is active.
This means there are several price levels and periods to set. The price levels are then arranged like ladder rungs, and in order for a successful trade the chosen asset must climb the ladder rungs at particular times.
A trade example would be if the EURGBP and it’s trading at 1.2789. You want to trade currency using the ladder binary option. You want to choose three price levels and you decide on 1.2750, 1.3023, and 1.3060. So how can you make sure this trade is profitable? Now that you have set your price levels you need to choose the expiration time. We’ll opt for an expiry time of 11pm. Look at your trade as this:
EURGPB above 1.2750 (pay out of 20%)
EURGPB above 1.3023 (pay out of 35%)
EURGPB above 1.3060 (pay out of 50%)
For the first trade to be successful the EURGPB must close over 1.2750 by 11pm, this will result in a pay-out of 20%.
For the second trade to be successful the EURGPB must close over 1.3023 by 11pm, this will result in a pay-out of 35%.
For the first trade to be successful the EURGPB must close over 1.3060 by 11pm, this will result in a pay-out of 50%.
In order to successfully trade ladder binary options the trader must use analysis on the EURGPBs price action and what it will look like on the day of trading.
Traders can use the pivot point strategy to ladder trade. Simply begin by plotting pivot points on the chart you prefer to use and use a pivot point calculator. You’ll see three support lines and three resistance lines. Use those points as a guide to how the price may behave throughout the day. Look for prices just over the resistance levels that have been breached.
You can keep those points in mind as you set your trades and use those levels as the benchmark to set the ladder rungs. To ensure success you should set your price levels around five pips over the required level. This gives you the greatest change of success.
Use a demo account to get some experience before diving in with real trading in ladder binary options.