What exactly is a digital option?
Quote from peterfigliozzi:
Good Market Calls, Bad Market Timing
You Trade 15 Minute Movements, But Also Have A 2-Month View
EUR/USD now: 1.0300
I think: EUR/USD will be above 1.0700 in 2 months
"Sample Option: Buy 2 Month EUR call / USD put Digital Option with $5000 payoff for $800
2 Months From Now:
EUR/USD > 1.0700 = Earn $5,000 (minus the premium paid)
EUR/USD < 1.0700 = Option Expires Worthless, lose $800
Digital options are simple and inexpensive. If you believe that the EUR/USD will be above 1.0700 at the end of two months, but you are not exactly sure when this decline will occur, a digital option is perfect for you. You would simply buy a 2-month EUR call /USD put digital option with a 1.0700 strike. If after 2 months, the EUR/USD rate is equal or greater to 1.0700 at expiry, you would automatically earn your predetermined payoff. If not, your option would simply expire worthless. With low option premiums, your predetermined return can be in excess of 100%."
Yes of course trading should be done through proper trading plan and strategies and trading become easy for the trader and reasonable profit can be earned from trading.Quote from FX_Gigi:
The key principle of my Price Action Strategy is to keep things simple. I am against over complicating trading. In my opinion, the simpler your method is, the more effective you will be.