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REVERSAL STRATEGIES: THE WINNING WAY

EUR/USD 1.06062 00:30 21.02
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NZD/JPY 81.332 23:30 20.02
AUD/USD 0.76855 23:30 20.02
AUD/JPY 87.028 23:30 20.02
EUR/JPY 120.162 23:30 20.02
EUR/USD 1.06119 23:30 20.02
USD/JPY 113.238 23:30 20.02
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By: Adam Stone
May 14th 2014 6:35am GMT, London UK
 

Binary options who’ve missed out on the opportunity to take the S&P with reversal trades due to its inability to forge past the resistance at 1900 may have another incredible chance today. Yesterday, as we explained, the 1900 level was a tough one to break for the Standard & Poor’s stock index in the US. Despite a day ending positively, up 0.04% to 1897.45, the 1900 was not breached and binary options traders will hope for another crack at the level today. Whether with reversal strategies or with a complete break, both situations look equally likely. There might be a slightly better chance of a break if some positive news is to be released during the day. However, as things stand, it looks just about equal. So what should binary options traders do ?

Until a break occurs, which again looks quite possible considering the proximity to 1900, reversal strategies will rules the roost. Binary options traders will be quick to launch Put after Put option on each and every test of the 1895-1900 level. On each new test, binary traders will be able to take down (Put) options with what looks to be a very low risk trade. However, as we always recommend, using reversal strategies should always be used with a very small trade with an equally short duration. For this particular trade strategy, we see 300 second options as possibly the best choice. Seeing as how the risk of an actual break is quite high, the possibility of a false signal runs just as high. As such, be careful when the tests come about. Don’t go all in on the reversal. Trade sparingly, waiting for an actual test each time.

Once the market decides to trend in one or another direction though, then going bigger is the key. This is where you earn the real profit. Once the market breaks to the upside, the more preferable of the 2 directions today, then take Up options with what will likely be a low risk trade. There isn’t much to do in terms of strategic thinking here. It’s just action. Hit the market as the break is clear and showing momentum on the charts and don’t look back. The likelihood of a false break, as things appear at the moment, looks remote. As such, the risk levels across this entire strategy for the US session looks like the most promising one for binary options traders.

In forex trading news, we recommended yesterday to take down options on a break of the support and this is exactly what occurred. Binary and forex traders keeping an eye for that support, at 1.3745 reaped in great profits and volume on the EUR/USD shot up to a month’s high yesterday. We are looking for more similar opportunities and the one calling our name is certainly another break of the stronger support level at 1.3694. A break of the level will constitute a break of the 1.37 long term support band and will likely provide a great deal of follow-through momentum for binary options trades to take down options. Forex traders too will be able to take advantage in similar fashion.

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Adam Stone
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Adam Stone

As COO of GOptions, my first and foremost goal is to provide traders with the most up to date info from the markets. I have been trading the markets since 2004 and have been involved with stocks, binary options, and forex trading since then. I have had no formal market education and pride myself on a self taught approach to everything related to trading. I try to focus though on both the technical and fundamental aspects related to each trading day and bring forward the most important aspects of risk/reward in the market.
Adam Stone
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