Good Day traders,
In this article I am going to explain you a very simple but effective system from which you can make a sure profit using binary options. I use this strategy sometimes, mainly when we have news realises. Where is the problem with news realises? The market always is makes the big move some seconds after the announcement. You can know what time is the announcement but you can’t know exactly some seconds after it.You can know it about one minute later when the economic sites will post the announcement. So, what I do? Let’s assume that we have news at 11:30 AM. I use two monitors. One for the charts and another one for the orders.I was waiting to close the last candle one minute before the news, at 11:29 AM, and in the next candles, the news candle I am looking for buying or selling climax. If the candle starts to be green this means heavily buying activity some seconds after the news, the market will move up.If the candle starts to be red with selling climax this means heavily selling activity and the market will go down. Sometimes we have a correction exactly after this candle and the market goes to the opposite direction but the most of the time the first candle after the news, the news candle as I call it show us the way. To avoid unpredictable conditions like the condition I said above you can do one simple thing. Hedging the news. For doing this you can use two different financial products in the same asset. Spread Trading or Spot FX and Binary options. I take my main position usually with a Spread Trade and I am hedging this position with a binary option contract. Let’s see an example.
Look at this chart. It’s from GBPUSD currency pair. In the blue rectangle I drew we have the “news candle” (the big bullish candle). Now, let’s assume that your max loss you want for the Spread Trade or Spot FX is about 40$ and this will be your stop loss. You take a trade with 1 Lot or 10$ per pip. When the news candle starts to have buying climax the market shows us the way. You open your buying position. The same time open a binary option contract in the opposite direction, take a 50$ put. So,
Scenario 1: The price moved up about 35 pips and you made 350$ from the Spread Bet but you lost 50$ of the binary option contract. Total profit 300$.
Scenario 2: The first reaction of the market was false and it moved in the opposite direction. Your Spread Bet stopped at 40$ loss (stop Loss order) but you won the binary options (payout 70-80%) can give you about 40$ profit. Your total profit is 0$.