BACKGROUND: In our LIVE trading chat room, we discussed the ECB press conference and concluded the EURUSD pair would be unchanged at the end of the conference but the pair would likely experience some minor ups and down (volatility) during the conference.
DETAILS: ECB President Mario Draghi was not expected to announce any major changes to the ECB’s current monetary policy. If that’s the case, the minority anticipating major policy changes would need to buy EURUSD to close their trades. It’s likely the buying would drive the EURUSD higher but unlikely the gains would be sustained. Also, Draghi could make minor changes to the current monetary policy that could cause some downside EURUSD price action but once again any losses were unlikely to be sustained
CHALLENGE: Identifying a stress free, low risk EURUSD trade strategy to profit from the fact we expect the EURUSD pair to move up and down during the press conference but not sustain any of the gains or losses.
TRADE TAKEN: At 8:28am Eastern Time we made a 1:1 bet that at exactly 9am Eastern Time (32 minutes later) the EURUSD pair would not be more than 36 pips above or not be more than 36 points below the 8:28am price. At 9am the EURUSD price was not more 30 points different than the 8:28am price and so we won the bet.
HOW IS THIS POSSIBLE?: Binary options; we placed two trades. Our maximum loss was known; no change of slippage or getting stopped out. Our maximum profit was known; it equaled exactly the amount as our possible maximum loss. Bottom line; we make or loss the exact same amount: 1:1 risk reward. Stress free
NOT FAMILIAR WITH BINARY OPTIONS?: Simple and straightforward. Takes minutes to understand and start using
CUT AND PASTE FROM THE LIVE TRADING CHAT ROOM:
Note: At the time these trades were placed EURUSD was trading at 1.1013: