Trading 60-second options on the EUR/USD: 6/10 ITM (6 ITM, 3 OTM, 1 ATM)

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Like last Monday, I decided to trade some second options. For second options posts, I do my commentary a bit differently than usual. Due to the higher than normal volume of trades, I label each trade by number in the screenshot and describe them individually below it.

When I began trading around 2: Itm and otm binary strategies price hit the support 1 line I decided to wait and avoid the call option set-up given the When a market is near an important Fibonacci level, it almost always tests it. This is especially important during normal market hours i. When the market touched the Price went through a bit before the Fib level expectedly acted as a level of support and sixty seconds from my entry I had a winner.

I took a put option this time looking at the 1. Three wicks had formed at the level and the trend, although pretty much a non-factor thus far, seemed to have a predilection to the downside at this point. So I entered a put option and this trade went in my favor almost the entire time, although it crept back up to an at-the-money trade by expiration i. This trade followed the same resistance level as trade 2.

After a brief dip, price came back up to 1. This trade worked very similarly to the last one, going in favor most of the time before a climb back up just before expiration. But fortunately, this trade finished in-the-money by a tenth of a pip. This trade, quite simply, was a itm and otm binary strategies option using the But the sellers clearly won out at this level and a morning downtrend was confirmed.

Although this trade lost, at least the breach of the This certainly helped in making further trading decisions, where I had a clear bias for put options going forward. Since the trend was down, I wanted to remain partial toward put options. However, in a downtrend and price only retracing slightly above these areas, I preferred to bypass these call option set-ups. This trade used the 1. Within a downtrend, retracements back up to resistance levels become higher probability trades.

I itm and otm binary strategies have taken the first itm and otm binary strategies of the level on the 3: But I was still able to get into the put option on the 3: This call option on the 4: Also note that the whole number of 1.

But when it comes to daily pivot points, the market has a strong tendency to show some reactivity to these since so many buy and sell orders revolve around pivot points.

This trade ended up a winner. I at least expected there to be another touch of support 2 and perhaps even a move below it if the downtrend was going to sustain itself.

But the fact that the market stopped short of support 2 suggested to me that a move back up was likely. This was especially true given that an extremely weak retracement had just occurred right itm and otm binary strategies the re-touch of 1. So no put options were taken at 1. My price feed temporarily froze on that occurrence anyway. I took the put option on a touch of the resistance level that had been formed around the 1. This trade lost by a tenth of a pip.

Those type of losses might seem like morale killers, but on second trades outcomes of less than a pip are rather normal. First of all, the support level was formed after a three-pip down move from support at 1. Even so, when that support level came back into play on the 5: So that itm and otm binary strategies never materialized. This trade was simply another call option at the touch of support 2 1. The fact that this trade failed immediately does not surprise me as the trend was down and support 2 had already seen itm and otm binary strategies touch earlier in the day.

I actually itm and otm binary strategies down on paper the flaws in this type of set-up so I can possibly avoid it should similar market scenarios arise in the future.

For beginning traders, I would always recommend trading in the direction of the ongoing trend as much as possible. Finding high-probability reversals or counter-trend opportunities can be difficult. Even many professional traders choose to never go against the trend on principle. This was a simple trend-following trade using the 1. This trade finished in-the-money. I took a put option here on the touch of support 2 1. Itm and otm binary strategies was my favorite set-up of the day as it went with the prevailing downtrend and was based on a strong level of resistance given it was a pivot level and had seen previous price history earlier in the day.

These are my favorite type of trade set-ups in general. Overall, this was still a profitable day. Where Do I trade?

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There are several trading strategies for the binary options market. Some are suitable for the US style of binary options found on NADEX or Cantor Exchange, while others are better suited to the online trading platforms which are regulated. When it comes to US exchange traded options, there are basically five major binary option trading strategies available:. It is an uncontestable fact that any trader who trades on the NADEX or Cantor Exchange platform must understand these strategies, and exactly what situations would warrant playing one strategy over another.

The goal of this article is to demystify these strategies and enable traders understand exactly when to use these strategies. We now take our time to explore these strategies one after the other. The strategies to be covered here are the core strategies. Other more exotic strategies will be covered in a subsequent article. The definition for an in-the-money option on NADEX is a bit different from what traders who trade European style binary options have been used to.

An in-the-money option is not necessarily used to define an option that is profitable. It only refers to a binary option that is worthy of being exercised. The in-the-money binary options strategy is a trend-following approach. This strategy is used when the trader expects the asset to maintain a strong trend for some time to come.

Such a trend is obviously as a result of market fundamentals, pushing an asset in a particular direction. This was a fundamental factor that pushed prices towards a particular direction, resulting in a very strong trend which lasted for some time.

The first step towards deciding if the in-the-money strategy is the right one to use is to check the news headlines and then scan the graphs of the asset to see if the trend in the asset is strong and in the direction that the news headlines are pointing to.

A good way to gauge this is to see if the trend makes a to degree angle to the horizontal, or whether the price action has broken through its day moving average.

Usually the trend is confirmed by the price action making a sequence of new daily highs and new daily lows.

If a determination has been made that the asset is trending and this is backed up by strong fundamentals, then it would make sense to do an in-the-money or deep-in-the-money strategy. Another point that must be noted is that the trend direction must remain strong for a reasonable amount of time. Usually, deep-in-the-money trades attract higher commissions because the expected outcome of the trade is that it will be settled in profit territory.

The deep-in-the-money trader is essentially a trend trader and is joining the herd. When the trader examines the charts and the trend of the asset is starting to table out in a plateau, then it may be a safer play to go for an at-the-money ATM strategy. At- or near-the-money options contracts usually attract a higher premium than out-of-the-money binary options, but they are usually cheaper than in-the-money binary options. Generally speaking, options in which the difference between the strike price and market value is less than 50 cents are considered to be near the money.

In this chart above, we see the price action testing the support line many times. When the price action is doing this, then a range will tend to form because price action will not be swinging too wildly from one end to the other.

In this situation, you can use an at-the-money strategy to trade the binary option on this asset. The out-of-the-money OTM binary option trade is mostly used to take advantage of very high trade volatility. Out of the money binary options trade usually attract very low premiums. Trades taken with deep-out-of-the-money DOOM binary trades are usually considered trades with improbable outcomes, but if the outcome works out as the trader predicted, the payout can be quite huge.

Most times, it is not always recommended to use one strategy exclusively, and the reason is not far-fetched. Markets and price action can be unpredictable, and it is good to use a strategy which can put this unpredictability in your favour.

This is where combination strategies come in. Combination strategies typically make use of two or three different strategies to as to enable the trader to benefit from a variety of market conditions within a typical trading week. Regardless of the combination, option strategies should match market conditions. The following combinations can be used:. In a subsequent article, we will show you what days of the week these strategies will come in handy.

Meantime, you can study these setups to know exactly when to use them in the binary options market.