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Averaging Down and Scaling Up at Option Exchange! The Safe Option Strategy Rescue Bad Positions!

Averaging Down and Scaling Up at Option Exchange! The Safe Option Strategy Rescue Bad Positions!
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The Impossible Is Nothing!

Greetings, friends! It’s John Foster, and today I will tell you about the safe option strategy rescuing bad positions at binary option exchange. Thinkit’s impossible? You are wrong! Everything is possible at the exchange, and even more, if you know some key rules and some nuances. Right now, I am telling you about these nuances, which, believe me, will significantly increase your profits.

This principle is called averaging down among traders, and it works at forex. Nevertheless, it may be used at binary options exchange, having modified and adjusted it a bit. I’ve spend more than a half-year for that, creating rules, testing them and checking via different brokers at demo- and real accounts. And now, I can say for sure that averaging down really works, and after publishing this very article, it will become available for all my subscribers and readers.

The Instruction for Averaging Down!

  1. Firstly, buy an option. Do it according to the strategy you’ve chosen for you. Averaging down is not the full-value trading system, and it’s most efficient in case when your strategy fails and the options becomes unprofitable.
  2. So, you’ve bought the option, but the chart goes against you to the significant amount of pips. But don’t fall into despair – we are using averaging down now, a safe option strategy rescuing bad positions.
  3. When the chart goes reasonably far from you, open a double order in the same direction, like the first one. Let’s make it clear with an example. You’ve bought a Call option of 25 $, but the chart went down. After it’s gone too far, buy another Call, but for 50 $ now. Experience shows the price will be likely to turn and go up, but not far enough to close the first order with profits. So, we lose the first bet, but gain with the second one, which is doubled. In total, loss is 25 $, and profits are a bit less than 50 $, though, the order has been bad initially.safe- option-strategies-3

Magic or Calculation?

But there’s the last question: why should the price go toward our position when the second order is opened? The reason for this lies in drawbacks and corrections. The chart moves not in the same direction in 90% cases – it draws back periodically, displaying corrections from the trend. But such corrections are not continual, and soon the direction changes to the opposite one. If the first order is opened toward the trend but goes to the losses, then, the correction takes place, and it will not live for too long. If the order is made against the tendency and goes to the losses, then the correction doesn’t take place – the price still moves with the trend. But the drawback will surely happen, with 90% chance. And we’ll gain with it via the doubled order, having covered losses and gained some profits.

Thus, no matter which direction your order has to the trend, averaging down works with 90% chance anyway. The principle described above is called the corrections theory, and it’s the base for most professional technical strategies at forex. Novices don’t use it, because don’t even now it exists. So, if the certain trading strategy gives 30% profits per month, it’s supposed to make more than 60%, if goes with averaging down.

Scaling Up as the Antipode of Averaging Down!

But I’ve told not of all nuances. And here is the most interesting part. Averaging can relieve us from 90% losses, but so-called scaling up (deposit boosting) lets make 90% more. They are used by forex traders, but only by professional and experienced ones. Beginners can use it at options, having realized and learned the following instruction:

  1. Initially, you buy an option according to your trading strategy. The scaling will be used only in case when the chart goes far in our direction.
  2. Let’s suppose that the chart goes toward a trader. Get ready to engage scaling up.
  3. We open a doubled order against the opened one, and the chart must turn and let us gain with the correction. Again, let’s make it clear with an instance for better understanding. A trader’s bought a Call option for 25 $, and the chart went up quite far from the opened position. Then, a trader buys a Put option for 50 $ and waits for the correction, which is 90% likely to emerge.

safe- option-strategies-2

Scaling up works with the same principle as averagind down does, but it doesn’t stand for rescuing a bad order, but for making yet more profitable from a good one.

In the case of the example, the total profit will be slightly less than 75 $, against 25 $ supposed to be gained initially, without using scaling.

When to Engage Averaging and Scaling?

I want you to pay attention that one may not use averaging and scaling with every single order. The chart must go reasonably far from the price of buying an option. If it fluctuates around the line of purchase, moving the option to profits and then to losses, corrections theory doesn’t work and it’s impossible to use either averaging or scaling.

Best Strategies for Averaging and Scaling!

You’d better engage averaging or scaling at strong levels, such as Fibonacci lines, impulse levels, support or resistance lines. With that, the chance of successful outcome increases. It’s an optional conditional, but if it’s met, profits increase well. Herearestrategieswhichsuitthismost:

  1. Trading with Fibonacci lines. This strategy is used by forex trading, and to engage it at option exchange, one will need MetaTrader trading terminal. The essence of it is in drawing the tool called “Fibonacci Lines”.
  2. Trading against the trend. I’ve described this strategy personally in one of the previous articles. Support and resistance lines will be strong levels there.

safe- option-strategies-1

  1. News trading. This strategy has also been described by me. There are no certain levels from which one should engage scaling, but they’re not needed. Almost once the price starts moving towards the news, there is a drawback in 30-60 seconds. For instance, if German GDP rises, euro-dollar chart will abruptly go up firstly, then will decrease its speed and stop. Just then you must engage scaling, because the price is very likely to come down influenced by the drawback.

Finishing

Actually, scaling up and averaging down may be always used, with any asset and strategy – either technical or fundamental. The main point is to realize its essence, simple rules of trading mentioned above. Using of this principle will let you significantly reduce risks and increase profits. It hasn’t been commonly used at option exchange, but those pro-traders who trade at forex with this tool, gain 3-4 times more than any other trader with the same system but without scaling and averaging. Remember: corrections theory is the essential part of most traders’ trading systems. In some measure, there is the secret of their successful trading. Now, you are known about it – so, start trading and use it in practice!

Get lucky and gain much!

Best Regards, John Foster.

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Technical Summary

Timeframe 2018-01-22 13:48:47 GMT
EUR/USD
1.2250 +0.0027 (+0.22%)
Summary Strong Buy
Moving Averages: Buy (7) Sell (5)
Indicators: Buy (8) Sell (2)
EUR/USD 1.2250 Strong Buy
EUR/RUB 69.2826 Strong Sell
USD/RUB 56.5730 Strong Sell
GBP/USD 1.3921 Strong Buy
USD/JPY 110.77 Neutral
EUR/JPY 135.69 Strong Buy
AUD/USD 0.8017 Strong Buy
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