New Binary Option Strategy

In a previous article, the Big Ben Strategy for Spreads was presented. Darrell Martin worked closely on the development of both strategies with Ann and Joseph Rivera, and Jessie Van and Venkat Jayaraman, all traders at Apex Investing Institute. Whereas the Big Ben strategy is designed for spreads, the London Reversal is set up for binary options.

Knowing the London Stock Exchange operates from 8:00 AM - 4:30 Pm GMT, except on public and bank holidays, can prepare you for this new strategy. With the time difference, this means the opening is at 3:00 AM ET, but this strategy actually works when things slow down on the GBP/USD around 11:00 AM ET.

Rules:
This simple strategy has only a handful of rules.

  • You need to use a Deep In The Money (DITM) Binary with a 3:00 PM expiration.
  • A Full deviation move on the deviation tool makes it a valid trading day.
  • If no black line, indicating a full deviation move, has been formed or crossed, there is no trade for that day.
  • Use GBP/USD 15 Minute Candlestick charts with the Apex Sharpshooter Template.

Once you have your NinjaTrader chart set up, utilizing the Sharpshooter template available at Apex Investing, you will see such indicators as Deviation Levels, Izones, Expected Volume, Expected Range and Trend Catcher (TC) arrows. The indicators will show you where the market is expected to move and the TC arrows will signal the direction of the trade.

In the red box in the following image, it shows the movement caused by the London Opening. Look at the bottom of the chart, in the Expected Volume area you can see what Joseph calls “The Middle Finger Spike,” with volume receding around 11:30 ET.

Click HERE to view a larger image.

In the Deviation area of the chart, note that a black line formed, meaning that a full deviation move had happened sometime during the day signally a valid trading day. You are also looking at the “lava”, red or green, which indicates how far the market has retraced from the low or high of the day. Wait for the lava to be receding and not hugging the blue line before entering your trade.

The Izone is for confirmation you are taking the trade in the right direction.

Remember this is a deep in the money strategy where you want to enter around 80-85 if buying, possibly as low as 70 but definitely not an ITM strategy. As such, you can plan your profit to be between $15-20.

For the example trade, Joseph entered the trade selling the GBP/USD >1.5340 3 PM contract for 13.50, risking $86.50. It was held until expiration and settled at 1.52918 giving a profit of $13.50.

The image below shows how the trade played out.

Click HERE to view a larger image.


You can see how the signals were all there. The rules were followed and the trade was profitable.

Always try a new strategy in demo before going live. Once you are comfortable with the strategy, to increase your profit increase the number of contracts.

To learn more about any of the indicators mentioned for this strategy, go to www.apexinvesting.com. There you will find traders willing to help you perfect this and other strategies.

Posted In: apexinvestingbinarybinary chartsbinary optionsbinary scannerbinary signalsdarrell martinday tradinghow to tradenadex binariesnews release tradesnews trading ideasnorth american derivative exchangepost newspremium collectionprenewsscalpingspike strikerspread optionsspread scannerThe Better Betweekly optionsBinary OptionsEducationEurozoneFuturesCommoditiesOptionsForexMarketsGeneral

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.