Every strategy gives off signals, that’s the whole point, but there are other signals no indicator can give. Read now to discover new ways to profit.
A Few Tips And Tricks For Binary Options
Signals, it can be such a bad word, there are so many scams on the internet it seems that the scam industry is bigger than legit binary options. The thing to remember is that we all take signals of one variety or another. Sometimes they come from our strategies, sometimes from a service, sometimes from a friend or one found in a forum. Regardless, signals are what we trade. Sometimes signals can come directly from the market itself. It doesn’t happen frequently what I am about to describe but it does happen. These signals do occur and if you are familiar with them, recognize them when they appear and make the trade when the time is right you will profit.
Opening Bell Strategy For Binary Options
One little trick I like to use is what I call the Opening Bell Strategy. Every once in a while volatility creeps into the market in a way in which there are wild swings in prices between the close and open of the next trading day. Sometimes this results in a much higher open the next day and can be tracked through the futures market. For example, S&P 500 futures trade independently of the S&p 500 but tend to track it pretty closely. Index futures also trade on the electronic market place, all night long, long before the open of the index it is based on and can indicate price direction.
If futures swing higher and indicate a much higher open for the index, at least 1% is my rule, then you can expect a strong surge in prices at the open and most likely a big up day for that market in general. There are two ways I trade this. The first is to buy a call as soon as the market opens. This can be tricky to do and works best if the trade can be placed within the first minute of trading. If so it is possible to catch the market early in its surge and profit from short term options with expiry in the range of 60 seconds to 5 minutes (take note this; is the first time I have ever recommended a 60 second option).
The second method is to wait for the initial surge to happen. This could last a few minutes but is usually followed by a pull-back to check support before moving higher. The pull back can be targeted for short term options as well as one hour or end of day, depending on your style. For best results use this when the market is moving up from support or in conjunction with other bullish technical signal.
The Risk – The biggest risk is that you won’t be able to get an entry within the first 60 seconds. This will depend on your broker and its execution and available trading times. It may be better for you to use a longer expiry, perhaps 15 to 30 minutes, in order to allow the initial surge and pull back to occur and for the market to continue its march higher.
The Reward – This is an almost guaranteed trade. Under ideal circumstances you should be able to get one of the entries as described and benefit from strong upward momentum. It took me a few tries to perfect it and have found it to be very successful.
Fading The Market With Binary Options
This next trick is well known but little used, often called Fading The Market. From time to time the market will make a wild move higher. Sometimes this is during an uptrend but not always, this tip of course is for the other times. If the market has a big upswing, at least 1% but the bigger the better, that reaches a resistance level it is likely to be followed by at least a small pull back the next day. If this happens in a down trend, at a known level of resistance, during light holiday trading or other non-trending time you can expect to see the market pull back significantly if not the next day then over the next few days. These days (the initial upswing) are great days to buy puts. The most ideal entry is at the high of the day, the next best will be at the close. If you can get in at the high of the day, above resistance levels, you can use an end of day expiry other wise I would get in near the end of the day. At that time I would use an expiry for the next day or even end of week just to be sure.
The Risk – The biggest risk is that the asset price will keep moving up. A strong up day could be what it is, a good day, and followed by more good days. This is best used at strong resistance levels, previous highs, tops of ranges and most profitably in down trends.
The Rewards – The rewards are big if you can weed out the signals. You want to focus on snap-back rallies, relief rallies, knee jerk upswings in range bound markets and other times price whipsaws above resistance. One day expiry is pretty safe and can be shortened with pinpoint entries.
These are both good techniques to know so long as you understand they are not for everyday trading. The trick to using them is to recognize the unique conditions in which they occur. The real challenge is finding a broker that has the assets, the expiry and the available trading times to use them. There is something to be said about using more than one broker and versatility is it. If one broker doesn’t have everything you want or need, two might do the job.