Touch/No Touch: Trading Target Contact

Touch/No Touch is a Path-Dependent Digital Option that relies on a single, custom-set price level called the Barrier. The outcome is determined by whether the market price makes contact with this Barrier at any point during the contract's duration.

Two Contract Types:

• Touch: You predict the market price will touch or cross the Barrier at least once before the contract expires
• No Touch: You predict the market price will never touch or cross the Barrier at any time before the contract expires

Key Difference from Range Contracts:

• Single Barrier: Uses only one price level instead of two
• Path-Dependent: Monitors price movement throughout the entire contract duration
• Instant Settlement: Touch contracts settle immediately upon barrier contact

The instant settlement feature creates unique trading opportunities:

For Touch Contracts:

• Win instantly when price touches the barrier
• No need to wait for expiry
• Immediate profit realization allows for faster capital turnover
• Perfect for momentum-based trading strategies

For No Touch Contracts:

• Lose instantly if price touches the barrier
• Forces you to be extremely selective about market conditions
• Requires accurate volatility prediction
• Provides instant risk management

Strategic Implication: This contract type rewards traders who can accurately predict not just direction, but the timing and magnitude of price movements to specific target levels.

The trader defines a single Barrier using a numerical offset (positive for a Barrier above the current price, negative for a Barrier below).

Touch Win Condition:

• If the market price reaches the Barrier, the contract results in an immediate win
• Trade settles early upon barrier contact
• No need to wait for expiry

No Touch Win Condition:

• Price remains strictly on one side of the Barrier for the entire contract duration
• Trade wins only upon expiry
• Requires perfect price containment

Loss Conditions:

• Touch: Loss if Barrier is not reached by expiry
• No Touch: Immediate loss the moment Barrier is touched

Path-Dependent Monitoring:

• System continuously monitors price against the single barrier
• No waiting for specific time intervals
• Instant reaction to barrier contact

Settlement Logic:

• Touch Win: Contract closes immediately with full payout
• No Touch Loss: Contract closes immediately with total loss
• No Settlement: Contract continues until expiry if barrier isn't touched

Strategic Timing:

• Touch benefits from longer durations (more time to reach barrier)
• No Touch benefits from shorter durations (less time for price to wander)
• Both benefit from accurate barrier placement

Duration Strategy:

• Touch: Longer durations give market more time to reach the barrier
• No Touch: Shorter durations reduce exposure to unexpected volatility

Touch Payouts:

• Can offer high payouts for distant, hard-to-reach targets
• Benefit is early settlement, locking in profits instantly
• Suitable for momentum-based trading strategies

No Touch Payouts:

• Can offer high payouts for very close barriers (high risk)
• Offers lower, safer payouts when barrier is set far away
• Suitable for low-volatility market conditions

Barrier Distance Impact:

• Closer barriers = Higher probability, lower payout
• Distant barriers = Lower probability, higher payout
• Optimal placement balances risk and reward

Risk Characteristics:

• Limited Risk: Loss is strictly limited to your initial Stake amount
• Instant Loss: No Touch contracts lose immediately upon barrier touch
• Path Sensitivity: Even brief barrier contact results in total loss

Risk Management Considerations:

• Touch requires accurate momentum prediction
• No Touch requires near-perfect volatility prediction
• Early termination can work for or against you

Touch Rewards:

• Can offer high payouts for distant, hard-to-reach targets
• Early settlement locks in profits instantly
• Suitable for momentum-based trading strategies

No Touch Rewards:

• Can offer high payouts for very close barriers (high risk)
• Offers lower, safer payouts when barrier is set far away
• Suitable for low-volatility market conditions

Early Settlement Advantage:

• Instant profit realization for Touch winners
• Faster capital turnover increases overall profitability
• Reduced time exposure to market risk

High Momentum Scenarios:

• Strong Directional Surge: When you anticipate a strong move that will hit a specific technical target
• Technical Targets: Daily Pivot points, Support/Resistance levels, Fibonacci extensions
• Momentum Uncertainty: When you're uncertain if momentum will sustain until expiry
• Breakout Trading: When expecting price to break through key levels

Market Conditions:

• High volatility periods
• Strong trending markets
• Technical breakout scenarios
• News-driven momentum

Success Factors:

• Requires accurate momentum prediction
• Benefits from strong directional moves
• Early settlement provides instant profit

Market Avoidance Scenarios:

• Extreme Low Volatility: Predicting extreme lack of volatility
• Technical Obstacles: Trading against key, proven technical obstacles
• Support/Resistance: Massive resistance levels unlikely to be breached
• Range-Bound Markets: When price is expected to stay within boundaries

Market Conditions:

• Low volatility periods
• Range-bound markets
• Strong support/resistance levels
• Consolidation patterns

Success Factors:

• Requires accurate volatility prediction
• Benefits from stable market conditions
• Instant loss protection through early termination

Strategy Overview: Identify an asset that has tested a strong, long-term support level multiple times and failed to break it. Set a No Touch Barrier just below this support line, betting that the support will hold.

Execution Steps:

1. Identify a strong, tested support level
2. Set No Touch Barrier just below the support line
3. Choose appropriate duration (not too long)
4. Execute No Touch contract
5. Wait for support to hold and avoid barrier contact

Why It Works:

• Support levels provide psychological barriers
• Multiple tests strengthen the level
• No Touch captures the avoidance behavior
• Early termination protects against unexpected breaks

Step 1: Select Contract Type

• Navigate to Trade → Options → Digital Options
• In contract type dropdown, select "Highs/Lows"
• Then select "Touch/No Touch"

Step 2: Define the Barrier

• Locate "Barrier offset" input field
• Enter positive value (e.g., +1.8 for target above current price)
• OR enter negative value (e.g., -1.5 for target below current price)
• Platform calculates: Barrier = Current Price + Offset

Step 3: Choose Duration and Stake

• Select expiry time (e.g., 30 Ticks or 10 Minutes)
• Enter your stake amount
• Review the payout percentage displayed

Step 4: Execute Contract

• Click "Buy Touch" (if you expect price to hit the target)
• OR
• Click "Buy No Touch" (if you expect price to avoid the target)

Step 5: Monitor for Early Settlement

• Watch for instant termination if barrier is touched
• Touch wins terminate immediately upon barrier contact
• No Touch losses terminate immediately upon barrier contact

Real-Time Monitoring:

• Contract status updates instantly when barrier is touched
• No need to wait for expiry time
• Immediate profit/loss realization

Touch Early Win:

• Contract closes immediately with full payout
• Capital becomes available for next trade
• Faster position turnover increases efficiency

No Touch Early Loss:

• Contract closes immediately with total loss
• Risk management: Limit position size accordingly
• Learn from barrier touch patterns

Strategic Advantage:

• Early settlement provides immediate feedback
• Allows for faster strategy adjustment
• Reduces overnight risk exposure

Common Mistake: Placing a Touch Barrier too close

Why It Happens:

• Seeking higher probability of success
• Not understanding payout sensitivity
• Focusing on win rate rather than risk/reward

How to Avoid:

• Target barriers that offer fair risk/reward ratio
• Consider payout percentage vs. probability
• Test different barrier distances on demo account
• Balance probability with profitability

Common Mistake: Forgetting about sudden, random volume spikes

Why It Happens:

• Underestimating market volatility
• Not accounting for news events
• Setting barriers too close to current price

How to Avoid:

• Execute No Touch contracts on assets with demonstrably low, consistent volatility
• Set barriers at appropriate distance from current price
• Avoid trading during high-impact news events
• Use longer durations for distant barriers

Key Differences:

• Single vs. Dual Barriers: Touch/No Touch uses one barrier, others use one or two
• Path vs. Expiry: Touch/No Touch monitors entire path, Higher/Lower only checks at expiry
• Settlement Timing: Instant vs. fixed expiry timing

Objective: Experience the instant settlement mechanism of Touch contracts.

Step-by-Step Challenge:

1. Switch to Demo Account and select a Volatility 50 Index

2. Place Touch Contract:

   • Set reasonably reachable Barrier (e.g., +/- 1.0 points)
   • Choose 10-minute expiry
   • Use small stake amount

3. Observe Early Settlement:

   • Wait for price to move
   • If price hits Barrier within 3 minutes, contract should settle immediately with full payout
   • Note the instant settlement time

4. Reflection Questions:

   • How does immediate payout feature make Touch superior to Higher/Lower for short-term momentum trading?
   • What are the advantages of instant profit realization?
   • How can you use this for faster position turnover?

Variation 1: No Touch Test

• Set barrier close to current price during low volatility
• Experience instant loss on barrier touch
• Understand the sensitivity of No Touch contracts

Variation 2: Barrier Distance Impact

• Test different barrier distances
• Observe payout percentage changes
• Understand risk/reward relationship

Variation 3: Duration Optimization

• Test shorter vs. longer durations
• Find optimal timeframes for your strategy
• Balance between opportunity and risk