Forex binary options can be useful in cases of breakouts, including false ones. Here’s a possible way to utilize them, with a recent example on EUR/USD. I’ve already shown how to use binary options as an alternative to the traditional stop loss. In this case, I’m showing how to use them in the direction of the trend, and the best way is using an example: EUR/USD began a rally after the Non-Farm Payrolls, about 10 days ago. It broke above 1.2460 and continued rallying. The next significant resistance line was seen at 1.2672, which was the peak in 6 weeks. The pair gradually approached this line. The Euro didn’t have too many reasons of its own to rise, and it was merely enjoying the dollar’s weakness. Nevertheless, it eventually climbed above 1.2672 and even reached 1.2722. This 50 pip break technically looks very convincing, but the fundamentals showed that a rise to higher levels wasn’t fully justified. Two attempts to assure the break failed. Binary Options A regular forex long position would have probably hit the stop loss, as the pair fell back and closed the week much lower. And here’s where binary options can be used. A trader that would see the breakout, could place a CALL option on EUR/USD. This means that he would make about 70% on his investment if the pair closed higher within one hour. This tighter 1 hour frame is what makes the difference. In this limited time, the pair indeed continued higher. It didn’t make a long term rally, but this doesn’t matter in case one uses binary options. Such cases of false breakouts that last a few hours are very common. It happens often in GBP/USD and in USD/JPY, and also others, and these options can be a great tool for taking advantage of these cases. With real breakouts, options can be utilized with other tools as well. With false ones, this seems the best option. Do you want to learn more on binary options? Head to BO Crunch for the latest binary options setups for forex, oil and gold. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Other Forex Stuff share Read Next Forex Daily Outlook – July 13 2010 Anat Dror 12 years Forex binary options can be useful in cases of breakouts, including false ones. Here's a possible way to utilize them, with a recent example on EUR/USD. I've already shown how to use binary options as an alternative to the traditional stop loss. In this case, I'm showing how to use them in the direction of the trend, and the best way is using an example: EUR/USD began a rally after the Non-Farm Payrolls, about 10 days ago. It broke above 1.2460 and continued rallying. The next significant resistance line was seen at 1.2672, which was the peak in 6 weeks.… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.