This might be a dumb question.But, is there ever a reason to take a trade where the risk is like 65.00 and the reward is 35.00? Maybe the underlying is so flat. that, it couldn’t hit the level in that time frame.Is, it better to change it to a 50/50 trade. Even if it might not hit?
Assuming you mean on binaries? I use those types of binaries for iron butterflies. I will sometimes do directional ITM for up to $60 but not any higher than that.
It CAN hit the level - no such thing as can’t in trading.
50/50 may be harder to fill…will not be as deep in the money if itm oat all when filled…
.so the itm binary (higher risk/lower reward) has the edge on flat, right direction, little in wrong direction - but your probability has to be higher than 60% if your risk is 60%…
“even if it might not hit” not sure what you mean?
Thanks, darrell. For example. Let’s say that oil has been trading between 90.00 and 92.00 for several hours or longer. And, a person finds a sell on 93.00 with a risk of 65.00 and a reward of 35.00 . Now, with the short time frame and several hours of oil between 90 and 92. Could there be times when this might be a decent trade in a flat market? The numbers are just hypothetical. The might not hit would mean a 65/35 ratio might not drop down to the 50/50 on a sell
would have to rise up to 93 or higher to get a sell at 50 ’ yes you could do this but the risk reward ust does not add up you would really need the probability to know over a set number of trades
