The Momentum strategy is a binary options trading strategy that uses the Momentum indicator on the forex MT4 trading platform to determine when a currency has an upward momentum (buy signal) or a downward momentum (sell signal). The Momentum indicator is an oscillator located on the indicator tab of the MT4 platform. The critical point in the Momentum indicator that is used as the reference point in determining whether the momentum is in an upward or downward direction is the 100 point. The indicator window has a signal line. When this signal line moves in an upward direction to cross above 100, the momentum for the asset is upward and this is a buy signal. Conversely, when the signal line moves in a downward direction to cross below 100, this is a downward momentum and it is a sell signal. In order to support the entries, candlestick patterns that favour the signal’s move are used.

Why does the Momentum Strategy Suck? My Opinion

The signal line is never enough to determine the accuracy of the signal. Even though candlesticks are used to support the entries, this is also not very accurate. High probability candlestick patterns are made up of 2 or 3 candles. Patterns with only one candle are not reliable. The Momentum strategy uses only one candlestick as the signal candle, which in my opinion, is not very reliable.

In addition, oscillators are known to lag. This means that by the time they provide a clear-cut signal, the market move may already have been far gone and an entry by the trader at this time may be dangerous; a retracement may already be under way and this will send the binary options trade based on the original signal into an out-of-the-money position.

Conclusion

This Strategy is not fit with Binary Options, in my opinion. Firstly, this strategy should not be used for the short term expiry trades, and that’s what Binary Options is all about. The trader should allow enough time for the trade to move in the expected direction

Second, I haven’t seen any Binary Options broker supported by MT4 Trading platform, which is used by Forex traders.

Last, The Momentum strategy is a tricky system to deploy. It is very easy to generate a false signal (or a delayed signal) with this strategy. As such, it is advised that traders actually take time to get the confirmation that they need from the Momentum indicator and the candlesticks, as well as pivot point calculators before engaging in any trades. To cap it all up, this strategy can be used to trade the Touch/No Touch as well as the boundary trades in the binary options market.

The straddle strategy is a popular trading strategy in the options market. In order to understand the straddle trade, one must understand what the term “straddle” means. When referencing human activity, to “straddle” means to stand on two legs, with each leg on opposite sides of a reference point. So in setting up a straddle trade, the trader must two positions (the put and the call), setup strike prices for each position and also set the expiry date/time. In essence, this strategy involves buying a put option at the top and a call option at the bottom. This is illustrated this way:

Buy 1 ABC AUG 50 Put @ $2.00/share or $200/contract
Buy 1 ABC AUG 50 Call @ $2.00/share or $200/contract

• where 1 represents the number of option contracts. 1 option contract = 100 shares
• XY is the underlying asset purchased (which could be a stock, ETF or commodity)
• 50 and 55 are the strike prices of the of the put and call option respectively

The Straddle Does Not Suck…IT ROCKS!

I love the straddle. This is because the profit potential is unlimited. Indeed, the farther away the price of the asset on expiry is from the market price at the time of purchasing the option, the greater the profit that the trader will make. It does not matter if the asset price goes up or down; the trader will make money. I cannot think of a better kind of trade to make in the options market.

Trading Scenarios
Profit: The profit potential in a straddle trade is unlimited. This is because no matter where the price is headed, the long positions for both call and put options will provide the necessary cover for profitable trades. All that is needed is for the price of the asset to move away from the market price at the time the straddle trade was setup.

a) If ABC is at $60 on expiration, the call option will be in the money while the put will expire out-of-the-money. The value of the straddle is calculated as follows:
Profit from call option= New asset price on expiry – Strike price of call option = (60 – 50) X 100 = $1000
Value of put option = $0
Cost of trade = cost of call + cost of put = 200 + 200 = $400
Earnings = $1000 – $400 = $600

b) If ABC is at $35 on expiration, the put option will be in the money and the call option will be out-of-the-money. The value of the straddle is calculated as follows:
Profit from put option = New asset price on expiry – Strike price of put option = (50 – 35) X 100 = $1500
Value of put = $0
Cost of trade = cost of call + cost of put = 200 + 200 = $400
Earnings = $1500 – $400 = $1100

Loss:
This is restricted to the cost of the trade, which in our example is $400. Losses occur when the price of the asset is unchanged at expiry, or has not changed sufficiently to surpass the trade costs.

My Conclusion

It is necessary to determine a correct timing for entering into a transaction. You should not only make a timely entrance into the put and call options: an essential decision on whether to start such a transaction under prevailing market conditions has to be made. Only when you are aware of the market bias for the traded asset and the calendar of news releases, can you afford to play the straddle strategy.
You need the asset price to change in order to profit from the straddle strategy. Under quiet market conditions, the price of the asset will not move enough for your earnings to exceed your trade costs. On the other hand, high volatility and an uncertainty in the market encourage the straddle strategy. Accordingly, important news releases and fundamental data announcements favour the strategy as unexpected positive or negative surprises could significantly affect prices over a short period of time.

The double red strategy is a binary options trading strategy that aims to catch a short-term bearish movement on an asset; usually in a matter of minutes. This can then be used to trade the Rise/Fall or High/Low binary options trade, with a very short expiry that should not exceed 15 minutes.

Why the Double Red Does Not Suck: My Opinion

I usually like to run away from the ultra-short term expiry trades in the binary options market because of the extreme uncertainty of those trades, but this is one strategy that can be used successfully to trade these ultra-short expiry binary options. Personally, I like this strategy because it is quick and pretty straightforward – to make a decision you simply have to identify two consecutive candles in red. If the setup occurs very well, you may even use it to target the high-end payout trades that offer up to 300% returns on trades.

The simplicity of the Double Red is what catches the eye.  There are two sequential bearish candles on your chart. The close of the first candle in the pattern is lower than that of the previous bull candle. The second candle opens above the low of the first candle and closes below it, and there goes your double red. Once you get the formation, head over to your binary options platform and execute a short expiry trade. That’s it. The chart used in identifying the pattern is a 5-minute chart, so your expiry should be opened when the third candle has retraced slightly upwards into the body of Candle 2. Bias is bearish, so select Fall (Rise/Fall) or Low (High/Low) and set your expiry to between 5 to 15 minutes.

Hold It! The Double Red May Still Suck If You Are Careless!

If you try trading the Double Red during a news release, you should prepare for a day of redness and sadness because the unpredictability of the news will take the trade out and you will lose your money. If you cannot identify candlesticks properly, then this trade is also not for you. If your expiry is too short or too long, prepare to see double red on your account. If you are the nervy type who cannot execute trades quickly and smartly before prices change, the trade will show you a double red card.

Conclusion

At the time of the news, unstable price actions are the norm as the price will lurch around in an unpredictable manner. Under such conditions you cannot make a decision and execute a trade at the same time. You are better served trading this strategy when there is no major news event taking place. In addition, try to do your analysis and take the trade when the trading time zones overlap. This is what guarantees the required volatility that is just enough to keep you profitable, but not too unpredictable as to destabilize the trade.

Finally, practice the Double Red on the demo platform of a Binary Options broker. That is the only way you will master the trade.

Equity markets in the US saw a second straight week of declines, and this led to the largest weekly loss so far in 2012.  Most of the negative sentiment has been created by political uncertainties in Greece, which is bringing the focus once again to the debt crisis in the Eurozone and is leading to analyst speculation that the country will be forced to abandon the Euro currency.

In addition to this, there was plenty of negative news in the financial sector, with JP Morgan reporting trading losses in excess of $2 billion.  JP Morgan stock was down more than 11 percent on the week, helping push the S&P 500 down 1.7 percent during the same period.  Other negative stock headlines in the US were generated by Macy and Fossil, which disappointed earnings forecasts, while Disney was one bright point during the week, rising more than 6 percent after its latest movie release “The Avengers” hit record sales numbers in its opening weekend box office numbers.

The main story, however, will be whether this year’s rally in the major stock indices will be sustainable, as last week’s price activity saw a drop in the S&P 500 of 1.2 percent to trade just above 1350.  This of course equates to a 7.6 percent gain for the year so far and options traders will now start to focus on the possibility that equity markets have posted their highs for 2012.

Market moving headlines in the coming week might be difficult to interpret for some new traders.  Most of the attention is likely to focus on Greece’s ability to form a majority government and the willingness of that government to enact austerity measures that were agreed upon previously.  These measures will be required from the rest of the EU in order for additional bailout funds to be disbursed to Greek bond holders.  Any suggestion that there are political disagreements could lead to bailout funds being delayed, and create risk that Greece will miss some of its treasury repayment deadlines (in effect, a debt default).

The headlines in Greece have taken precedence over economic data releases during the past two weeks but some of the most significant reports to watch next week will be the minutes from the Reserve Bank of Australian’s May monetary policy meeting as well as the first quarter GDP figures from the Eurozone on Tuesday.

My Trading Recommendation in 50 Words:

With risk sentiment seen widely negative and weakness coming into Gold prices in recent sessions, I will be looking to enter into a one month 1550 call option in Gold, as prices are likely to be contained by the double bottom seen near 1520 in the coming month.  Upside targets include a rise to at least 1665 first before seeing initial resistance but a break here would target a significant run higher to 1790.

Why does the Rainbow Strategy Suck? My Opinion

Personally, I do not take extremely short-term positions in the forex or binary options market because I find them to be too speculative. Speculation is a tool that has never suited retail traders well, and this strategy is no different. For this strategy, there are times when the retracing price goes beyond the expected bounce point at the 14EMA. Inexperienced traders may not be able to handle this.

Why this Rainbow Strategy May Not Suck After All

This strategy is adaptable to other time frames aside from the 5-minute time frame, so a longer time frame can be used to make the trades more manageable and less speculative.

Traders sometimes get confused as to what position to take in the binary options market where charts and indicators for technical analysis are lacking. However traders can draw some succor from the fact that currencies form the bulk of the binary options trade assets, hence analysis of currencies in the forex market can be used to generate trading signals in the binary options market. Breakouts and pullbacks are an integral part of the markets. When to re-enter after the price of an asset has pulled back from a period of trend movement is a usual dilemma for traders. By employing the Exponential Moving Average Rainbow strategy, traders can get a rough idea of when to re-enter in the direction of the previous trend, and take the corresponding position in the binary options market.

In my opinion, the strategy solves the problem of when to buy after a bearish pullback, or when to sell after a bounce retracement. It is also easy to identify and simple to use, since it makes use of only one indicator. It can also be used on several time frames to generate binary options signals, depending on the expiry time the trader has in mind. However it has its draw backs. Sometimes, the price retracement exceeds the 14EMA point, producing some confusion in traders as to when to pull the trigger. Another point is that when it is used on the short-term time charts, the signal’s reliability could be endangered by the choppiness of the price action on these charts.

My Conclusion in 50 words

Like other systems in the market, the trader has to make some concerted effort in studying how this strategy works using a demo platform along with simultaneous order placement on the demo platforms of binary options brokers. When this is done, then traders can look onto the Exponential Moving Average rainbow system as another trading tool in the arsenal.

Investors have been pushing up prices in equity markets recently, on the assumption that the jobs market is recovering.  The employment report from March shows that the economy added 154,000 jobs during the month of March, but this latest figure is throwing some of those previous assumptions into question.  The consensus estimate for April was 130,000 jobs, according to the latest Bloomberg survey and the downside surprise also brought selling pressure into the high yielding currencies such as the Australian and New Zealand Dollar.

Private sector payrolls saw an increase of 130,000 for April (from 166,000 the previous month), with the manufacturing sector seeing the biggest decline, creating only 16,000 jobs (from 41,000 previously).  In total, gains were seen in retail trade, health care and business services, while declines were seen in the transportation and warehousing industries.  On the positive side, the unemployment rate did manage fall to the lowest level we have seen since the beginning of this year, dropping from 8.2 percent to 8.1 percent for the month.  But markets were less than excited about this, as it came mostly from a reduction in the participation rate, as fewer job seekers are recorded.

Next Week’s Reaction

Looking forward, the main question will be how this report in interpreted by markets.  Looking at the initial reaction in the US Dollar, we can see that markets first viewed the currency unfavorably but toward the end of the session, major gains were seen against most of the Dollar’s main counterparts.  With this in mind, establishing currency trades next week will be riskier than stock positions, as we could easily see two way trading activity once again.  Poor jobs data is a much clearer negative for equity markets so we will see next week whether the latest bear move can sustain itself.

My Trading Recommendation in 50 words:

The latest down move in equity markets has pushed prices into some significant medium term support levels that are likely to contain prices for most of next week.  Because of this, I am looking to buy a one week call option in the S&P 500 at 1355.  This is a contrarian play, however, and the momentum is clearly on the downside at the moment.  But the move so far has been extreme, and I am looking for a bounce at some point next week back into the 1390 region.

After lots of research and many chats with Binary Options Brokers, we finally came up with some proper answers for one of the biggest rumors/half true’s in Binary Options industry – Free Binary Options Demo Accounts. Bots.com has received hundreds of Mails from traders regarding that matter. Many rumors have been flying around about binary options brokers who provide free demo accounts for costumers or even potential customers. Some of them are true, other are just marketing promotions or just untrue. Binaryoptionsthatsuck.com is happy to present our readers with some answers for those questions and even more, you just have to read and understand for yourselves.

Basic Facts about Demo Accounts

When talking about demo accounts, most people refer to virtual cash account. Virtual cash account is basically trading real assets in real expiry times but with real money, “virtual cash” it is. Some brokers claim to have a demo, but it’s actually a movie or any other kind of Demonstration on how to trade binary options. When I come across a broker who claim to have a demo but all he’s have is a 5 min movie, I usually start looking for another broker. I don’t think it’s fair to mislead costumers like that. This article would only discuss “real” demo accounts, and “free” demo accounts.

“Real” Demo Account – Trade virtual cash

Most binary options brokers don’t provide their customers with demo accounts. Some say it’s unnecessary and would only increase the pressure on the website; hence it could harm real cash trading. Other brokers explained that it could mislead people into thinking that their decisions are the same when trading real and virtual money. A few brokers even told me that I can actually do it myself without any help – just pick an asset, set your expiry time and then check your trade on the assets expiries history.

On the other hand, some binary options brokers do provide a demo account. Virtual account is being set by the broker at the moment a trader asks for it, usually not before. Brokers don’t just hand them out. Each broker will provide you with a different sum. Another important issue is the expiry of demo accounts – some brokers would offer you a free demo account but only for one day, or one week tops. So if you intend to open such an account, make sure you a little about trading because you may want to trade a little before the broker will close your virtual account and it’s usually a time offer.

“Free” Demo Account – Do I need to deposit first?

99% of Binary Options brokers require an initial deposit before setting up a Binary Options demo account. There are no free demo accounts, only demo accounts. The answer to that question is more or less the same explanation written above – brokers don’t want to hand out demo accounts randomly, for the same reasons mentioned above. Another reason why initial deposit is required is the unwritten contract between costumers and brokers. By saying contract I suggest that making a deposit shows commitment by the costumers, therefore the broker has a good reason to provide the costumer with a demo account. Some may say it’s a catch, I partly agree. It may be quite a drag, but you can actually deposit, use the virtual cash account and then request for a withdrawal. So if you are really interested in a demo account without trading for real, try my suggestion.

]]> http://www.binaryoptionsthatsuck.com/free-binary-options-demo-account/feed/ 1 http://www.binaryoptionsthatsuck.com/market-attention-to-turn-back-to-macro-data-releases-in-coming-week-looking-to-buy-gold-call-options-at-current-levels/ http://www.binaryoptionsthatsuck.com/market-attention-to-turn-back-to-macro-data-releases-in-coming-week-looking-to-buy-gold-call-options-at-current-levels/#comments Sun, 29 Apr 2012 20:40:38 +0000 Richard Cox http://www.binaryoptionsthatsuck.com/?p=635 Safe haven assets were broadly lower on the week, with the US Dollar losing ground against most of the major currencies and Gold dropping to the ... more

]]> Binary Options Weekly Briefing 30.4-3.5

Safe haven assets were broadly lower on the week, with the US Dollar losing ground against most of the major currencies and Gold dropping to the bottom of its recent trading ranges.  The major macro economic data release of the week came on Friday, as the first quarter GDP report out of the US disappointed market expectations, showing a rise of only 2.2 percent on a yearly basis.

Equity markets were focused on other factors, however, as strength in corporate earnings helped push the S&P 500 to its highest levels in three weeks.  Some of the main headlines came from Apple, Boeing, Microsoft and Amazon, all of which released strong quarterly earnings that surpassed analyst estimates and kept markets supported despite continued negative headlines out of Spain.  The Dow Jones finished the week higher by 1.5 percent, with the S&P 500 gaining 1.8 percent and the Nasdaq gaining by 2.3 percent by Friday’s close.

US Non Farm Payrolls to Drive Risk Sentiment

This trend is unlikely to continue this week, however, as most blue chip earnings reports have already been made public and so market direction will be more heavily influenced by macro economic data as it points (or fails to suggest) a continued economic recovery around the globe.  Last week did see some positive releases, with housing data and consumer confidence coming in better than expectations but most of the attention this week will be focused on employment data.  The major release of the week will be the US Non Farm Payrolls report but before this we will also have manufacturing and consumer spending numbers to generate some short term volatility earlier in the week.

Last month’s Non Farm Payrolls disappointed markets and showed a rise of only 120,000 jobs for the month of March, which was roughly half of the three month average at the time of release, so it appears as though the strong momentum in the labor markets seen early in the year is starting to wane.  Because of this, Friday’s data could be a key indication for how markets will perform in May as investors have a harder time finding credible reasons to put money back into equity markets and high yielding currencies.

A weaker jobs number will likely generate more volatility than a positive number as many traders will open long positions will be forced to close out and reverse to the short side.  The big winners, if this scenario does wind up being the case, will be the safe haven assets, with gold and the US likely to reverse the losses seen during the previous week.

My Trading Recommendation in 50 words:

With the latest declines seen in Gold prices, I will be looking to enter into a one week 1640 call option in Gold, as prices are likely to be contained by the triple bottom seen at 1625 in the coming week.  Upside targets include a rise to at least 1700 before any meeting resistance but a break here could easily send prices $100 higher.

Depositing money into any Binary Options Broker is easy. There’s almost no one who will deny taking your money away. Just like it works in most business, the first step, depositing your money, is always easy and efficient. The problem usually arises when you want to withdraw your profits back, or at least what’s left there. There are a few main reasons why withdrawal is usually more complicated then depositing, some are related to the global economy restrictions, some related to the broker itself and other a related to the human factor. This article will provide you with some explanations and instructions to issue related to withdrawal. Read more about withdrawal and other issues in our Binary Options Articels center.

Basic withdrawal information

In today’s global economy, binary options brokers are located in one country, while the traders are based all over the world. Costumers have many deposit options, C.C., MoneyBookers, Wire Transfer, etc. Usually the same methods are available to withdrawal. Withdrawals are slightly more complicated because costumers are required to submit forms to adhere to the laws regarding anti-money laundering. It’s not something that any broker could skip, since it’s required by law. So don’t be so frustrated when the binary options broker wants you to provide identifications, it’s for your protection.

It is possible to withdraw the initial deposit via the same methods that are used for deposits; profits are usually withdrawn via wire transfers. Some binary options broker allow other electronic billing methods, you should check it before even depositing. Another issue related to the amounts which could be withdrawn is the maximum amount. Some brokers allow high maximum amount (over K10$) and better maximum withdraw via C.C, while other limit the trades to lower a max and even lower limit for C.C. withdrawal. Traders who invest between 200-1000$ shouldn’t be too worried, those who invest more 2000-3000$ should be aware and check their broker before depositing.

What do we need?

The following identifications and forms are usually required by all binary options brokers in order to perform a withdrawal:

• Official ID(with picture)
• Proof of Address- which can be utility bill, bank statement, credit card statement, etc
• If credit card used to deposit funds: Front and back copies only shows last 4 digits

lots of traders are waiting a lot of time thinking that they a victim of scams when they receive those requests, Remember this is how it works and will work in the future, for all binary options brokers, it’s a Must , but now when you aware you can prepare the documents .

And Remember “Even The Best Brokers Suck Sometimes!”