Rise/Fall: Trading Directional Predictions

Digital Options (often called Binary Options) are contracts where you predict whether a market condition will be met by a set expiry time. The simplest form is the Rise/Fall contract.

Core Concept:

• Fixed Payout: Win amount known before trade
• Fixed Risk: Loss amount known (stake only)
• All-or-Nothing: Either win fixed amount or lose stake
• No Margin Calls: Can't lose more than stake

Two Simple Predictions:

• Rise: Predict Exit Spot will be strictly higher than Entry Spot
• Fall: Predict Exit Spot will be strictly lower than Entry Spot

Key Difference from Traditional Trading:

• Fixed Outcome: Not variable profit based on distance
• Known Risk/Reward: Both known upfront
• Simple Decision: Just up or down, nothing complex

The Entry Spot is the fundamental reference point:

Entry Spot Concept:

• Price at Purchase: Market price when you buy contract
• Reference Point: All comparisons made to this price
• Locked In: Cannot change after trade execution

Exit Spot Comparison:

• At Expiry: Final market price at contract expiry
• Win/Loss Determined: By comparing Exit to Entry
• Simple Logic: Higher = Rise wins, Lower = Fall wins

Strategic Implication: Digital Options reward traders who can predict direction from a single reference point, making it the purest form of directional trading.

The Rise/Fall contract requires you to predict the market's position relative to your Entry Spot (the price at which you bought the contract).

Rise Prediction:

• You predict Exit Spot will be strictly higher than Entry Spot
• Any amount higher wins (even 0.01 difference)
• Payout is fixed regardless of distance moved

Fall Prediction:

• You predict Exit Spot will be strictly lower than Entry Spot
• Any amount lower wins (even 0.01 difference)
• Payout is fixed regardless of distance moved

Tie Condition:

• Trade is lost if Exit Spot equals Entry Spot
• Unless using specific 'Allow Equals' variant
• 'Allow Equals' offers slightly lower payout for this protection

Win Conditions:

• Rise: Exit Spot > Entry Spot (strictly higher)
• Fall: Exit Spot < Entry Spot (strictly lower)
• Payout: Receive fixed payout percentage on stake

Loss Conditions:

• Rise: Exit Spot ≤ Entry Spot (lower or equal)
• Fall: Exit Spot ≥ Entry Spot (higher or equal)
• Loss: Lose entire stake amount

Key Parameters:

• Stake: Your capital at risk (typically $1-$1000)
• Payout: Fixed percentage return (e.g., 85% profit on stake)
• Duration: Time until expiry (ticks or time-based)

✅ Rise Success

Price ends above barrier = Win

❌ Rise Failure

Price ends below barrier = Loss

Understanding Rise Predictions:

• Success: When you predict Rise and Exit Spot is higher than Entry Spot
• Failure: When you predict Rise but Exit Spot is lower than Entry Spot
• Visual Indicators: Thumbs up/down show the outcome clearly

✅ Fall Success

Price ends below barrier = Win

❌ Fall Failure

Price ends above barrier = Loss

Understanding Fall Predictions:

• Success: When you predict Fall and Exit Spot is lower than Entry Spot
• Failure: When you predict Fall but Exit Spot is higher than Entry Spot
• Visual Indicators: Thumbs up/down show the outcome clearly

Duration Flexibility:

• Tick-Based: 1 tick to 1000+ ticks
• Time-Based: Seconds to days
• Match Strategy: Align duration with prediction confidence

Payout Characteristics:

• Known Upfront: Exact payout shown before trade
• Fixed Percentage: Typically 75-95% profit on stake
• Independent of Distance: 1 point or 100 points = same payout
• Suitable For: Risk-averse directional traders

Strategic Applications:

• Trending market directional bets
• Short-term signal exploitation
• News-driven price movements
• Technical confirmation trades

Risk/Reward Clarity:

• Stake $10 = Know you risk $10
• 85% payout = Know you can win $8.50
• Total return if win = $18.50 ($10 + $8.50)

Risk Characteristics:

• Strictly Limited: Risk capped at initial Stake amount
• Known Upfront: Risk determined before trade
• No Additional Losses: Can never lose more than stake
• No Margin Calls: Fixed loss regardless of market movement

Risk Management Considerations:

• Stake Sizing: Risk only what you can afford to lose
• Win Rate Required: Need 54%+ win rate at 85% payout for profitability
• Time Sensitivity: Shorter durations = higher risk
• Tie Risk: Equal Exit/Entry = loss (unless Allow Equals)

Fixed Capped Rewards:

• Fixed Payout: Reward capped by advertised payout percentage
• Typical Range: 75-95% profit on stake
• Distance Irrelevant: Same payout whether price moves 1 or 100 points
• Suitable For: Traders wanting known outcomes

Strategic Advantages:

• Known risk/reward before entry
• Simple win/loss mechanics
• No complex calculations
• Perfect for beginners

Statistical Reality:

• Payout percentage determines required win rate
• 85% payout needs 54% win rate for profitability
• Short durations increase randomness
• Longer durations may offer better payouts

Clear Trend Continuation:

• Confident Direction: Expect clear continuation of upward or downward trend
• Breakout Confirmation: Following breakout or confirmation signal
• Immediate Momentum: Capitalize on directional momentum
• Fixed Risk: Know maximum loss on trending bet

Market Conditions:

• Strong trending markets
• Confirmed breakouts
• Clear directional momentum
• Post-signal continuation

Success Factors:

• Requires trend identification skills
• Benefits from confirmation signals
• Suitable for directional traders

Fast Technical Signals:

• Very Fast Signals: Capitalize on 5-10 tick signals
• Technical Indicators: Use indicator-based entries
• News Spikes: Trade immediate news-driven movements
• Quick Decisions: Ultra-short duration directional bets

Market Conditions:

• Clear technical signals
• News announcement moments
• Indicator-based entries
• High-probability setups

Success Factors:

• Requires signal interpretation skills
• Benefits from technical analysis
• Suitable for active traders

Strategy Overview: Wait for market to clearly move in one direction (e.g., up) and then experience small, temporary pullback (short 'Fall'). Enter 'Rise' contract at end of pullback, expecting overall trend to continue.

Execution Steps:

1. Identify clear market direction (uptrend)
2. Wait for small temporary pullback
3. Confirm pullback ending
4. Enter Rise contract at pullback end
5. Expect trend continuation above Entry Spot

Why It Works:

• Pullbacks in trends are temporary
• Trend continuation is statistically likely
• Entry at pullback end provides better price
• Fixed payout captures trend resumption

Step 1: Select Asset

• Choose your asset (e.g., Volatility 100 Index)
• Consider asset volatility and behavior
• Match asset to your strategy

Step 2: Select Contract Type

• Choose "Rise/Fall" option in trade interface
• Navigate to Digital Options section
• Select Rise/Fall contract type

Step 3: Set Duration

• Set trade duration (e.g., 5 Ticks or 1 Minute)
• Shorter duration = higher risk, potentially higher payout
• Longer duration = lower risk, potentially lower payout

Step 4: Set Stake

• Enter stake amount (e.g., $10)
• Platform displays fixed Payout instantly (e.g., $18.50 return)
• Review risk ($10 loss) vs. reward ($8.50 profit)

Step 5: Execute

• Click 'Rise' if predicting Exit Spot will be higher
• OR
• Click 'Fall' if predicting Exit Spot will be lower
• Trade now active, Entry Spot locked

Pre-Trade Analysis:

• Identify market direction
• Confirm trend or signal
• Select appropriate duration
• Calculate risk/reward

During Trade:

• Monitor price movement
• Cannot modify contract once placed
• Wait for expiry
• No action required

At Expiry:

• Automatic settlement
• Win = Receive fixed payout
• Loss = Stake deducted
• Result immediate and clear

Post-Trade Review:

• Analyze prediction accuracy
• Review duration selection
• Evaluate if tie occurred
• Refine directional strategy