I know its not wise to trade DITM binaries since they don’t give you the risk reward ratio your looking for but I have been doing it and have had a lot of success and I believe I have found a way to use them by Hedging. Lets say for example each day you buy a daily DITM binary that expires at some point of the day and you have a streak of winning days in a row and then one day an half hour or hour before the DITM binary expires you find that you are going to lose the trade which is where you would be giving back a lot of money to the market since the risk reward ratio of DITM binaries is 1-4 or 1-3 or worse, which is the reason why its not wise to trade DITM binaries. However lets say you then choose to put on another DITM trade except on the other side of the market and you buy up a whole lot of contracts to not only cover your original loss but make some money on the trade and since the market of the asset you originally took a position on(The first DITM trade which is now a losing trade) is already deep out of the money with only a little time to go you are almost certain to win the hedging DITM trade using a lot of contracts on the other side of the market and recover your losses and make even more money. I have not had to do this on my live account yet but I have thought about it a lot and a lot and it seems to make great sense. I wanted to know what some of you other traders thought about using this strategy and is it a good idea to us it if you have too?
You would be massively expanding your risk. ie 3x+ as much as you don’t know that the hedge itself will not lose and due to the time decay the DITM will not be near as far away.
I use ITM binaries all the time. the wisdome comes down to your Profitability (how much you make when you win versus when you lose) and your probatilty. How often you win versus how often you lose. Are you taking stops or just holding out to see what happens or??
