Lately, we have seen more and more types of binary options available for trading. Sometimes it can be confusing, especially for a new investor in binary options. Brokers tend generally do a good job explaining the differences between the types of options, but unfortunately sometimes lacking explanations simple enough, and most of the time tell us only care about how much money we will win, instead of telling us how to do it. That is why it seems appropriate to explain the main types of binary options in a simple and easy to understand, and of course, using images to it. We all know that a picture is worth a thousand words. So let the matter on track and start with the most common type of options, known as UP / DOWN (also called English UP / DOWN, HIGH / LOW, Above / Below or CALL / PUT).

Options UP / DOWN

These are simple: only need the expiration price is higher or lower than the initial purchase price of the option (the price of the asset on which the purchase agreement is based), depending on the mode you select ( up or down). It's that simple. If I select UP (UP or Call) and the expiry price is even higher pip only the price that I opened the transaction, won 100% of the specified performance. If I select DOWN (DOWN or Put) and the price of maturity, even a lower price pip with which I opened (the entry price of the option), won all the performance. Here's an image that exemplifies an operation with a type of negotiation UP (UP or Call):

The price was opened up after the negotiation and I managed to stay above at the time of maturity: Cling! Let's box!

Binary Options "UP / DOWN" Conclusion in 50 words

I will not discuss whether this type of negotiation is terrible because you should know when to use it, so you will avoid unpleasant surprises and to meet the "smelly" factor that can have this type of transacciones.Todos types of binary operations have a certain market condition and work best with options UP / DOWN, the market trend is the best. Look at the picture above, the UP option was used in an uptrend. If you trade with the trend, you will be on the safe side and the likelihood that the operation is a success will increase dramatically. If the market is oscillating, use another type of option.

UP / DOWN summary:

ABOVE: wins if the expiration price is higher than the opening price
DOWN: wins if the expiration price is lower than the opening price

When to use:
in a market trend

Options ONE TOUCH / NOT TOUCH

When ONE TOUCH option (in Spanish, a touch) bet that the price will touch a certain level before maturity is used. We just need the price range (touch) the level once, until maturity, and no matter where the price go once you've reached our marked price, because our operation has already resulted winner. For NOT TOUCH option (in Spanish, Lockers), the opposite applies: we will receive 100% return if the price does not touch the predetermined level. Here we can see the picture:

My target price (the red line) was hit (touched) before the end so I get paid performance. For a negotiation NOT TOUCH I need the price section is maintained and never reach my default until maturity level. Although ONE TOUCH operation do not have to wait at maturity (if the target price is reached before the negotiation is over for me as I have gained in the operation), in a negotiation NOT TOUCH I expect the maturity to see if the target price will be reached or not.

Binary Options "ONE TOUCH / NOT TOUCH" Conclusion in 50 words
Such options are not a bad choice when you are unsure about the sustainability of a given level. For example, if you think that is forming a potential Double Top (two consecutive peaks of similar height), then you can use a choice of ONE TOUCH. When volatility is low, you can use an option NOT TOUCH, when it is assumed that the price will not reach the target price. However, do not use options NOT TOUCH after prolonged periods of low volatility, because a sudden and sharp movement may occur after periods of this type. We all know that the Asian session is fairly quiet so a choice NOT TOUCH probably will not be a bad choice.

ONE TOUCH / NOT TOUCH summary:

ONE TOUCH: wins if the price hits the target price before maturity.
DO NOT TOUCH: wins if the price does not touch the target price before maturity.

When to use:
Use ONE TOUCH if you think a certain level will be reached, but is not sure if the price will remain above / below that level.

Use NOT TOUCH in quiet market conditions (the Asian session is known to be slow motion). You can also use the NOT TOUCH option to the short side in a strong uptrend or the long side, in a downtrend. The idea behind this use of the option is that the price will not move against a clear trend enough to touch our price range.

IN / OUT or BOUNDARY (limit or range)
When the "IN" option is used, the trader expects the price to move between an upper and lower (fixed limit) level within the maturity. Let me give you an example: EUR / USD is currently trading at 1.2000. Assume that the upper limit is set at 1.2050 and the lower limit is set at 1.1950 and chose "IN". If at the expiry, the EUR / USD is trading at anywhere between 1.1950 and 1.2050, we received performance by this operation.

For a "OUT" negotiation, we need the close price, of course, outside the limits marcados.Eche out the image below to see an operation range (or Boundary limits). Note that this is an example of negotiation "IN" (we need the price is within the limits when the expiration occurs):

We see that even sweating, when the price went lower limit just before maturity, and then return to the limits, finally we got the much-needed performance. The "OUT" negotiation requires that the price is out of bounds to win. Such options IN / OUT are presented under different names, such as Boundary (in Spanish, limit), Range (range) or Zone (zone).

Binary Options "IN / OUT" / limit / range. Conclusion in 50 words
The most important skill for binary options, currencies, commodities or any type of operation is to correctly identify the type of market that trades in a given time. A "IN" option will be terrible on a fast market, but at the same time, a "OUT" will not be a bad choice in such markets. The opposite occurs with slow or oscillating market.

IN / OUT summary:
"IN" wins: at the time of maturity, the price is within the limits
"OUT" wins: at the time of maturity, the price is out of bounds

When to use:
Use an "IN" swing trading during periods without clear trends or during quiet session.

Use an "OUT" negotiation with strong trends, after a setback and during periods of high volatility. In these periods it is unlikely that the price remains confined within limits.