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S&P with binary options 3-12-2013Binary options traders don’t always get what they want. But if they try, sometimes they get what they need. We explained in depth yesterday that a drop of thre S&P stock index, albeit a tricky situation, still looked very good. In fact, we stated flatly that a break below 1800 would allow binary options traders to take down options so long as momentum was in the direction. Sure enough, momentum piled on the pressure and the index faded, breaking below 1800 with nary a rebound in sight.

This type of price action is expressly what binary options traders need to look for. Sure, the EUR/USD is faster moving, has more expiries and certainly higher payouts due to a much higher liquidity level. However, this is not an easy asset to trade due to higher volatility levels and a propensity of the asset to record many false breaks making a trader’s life much harder.

This is precisely why we’ve been focusing our analyses on different assets, like the S&P, when they have a strong break pattern ready to be profited on. Yesterday was just that day and despite our concern of taking down options on a clearly up-trending asset, the break was just to good to pass up. Once the break hit, it was clear sailing, allowing binary traders to take down options with end-of-day expiries. We recommend that such trades utilize a larger % of your balance strictly in these cases. Reason being that the risk levels are much lower than a normal 10,15, or 60 minute trade.

The only trouble some traders faced with this asset was the gap it created at the opening. The market was already below 1800 by the time anyone had their screens ready to trade. But if you opened your daily charts, you’d have seen that momentum was generating massive price action to the downside, allowing traders to take Down options despite the uncertainty and rather wishy washy price action at the outset of trading. The day finished down to 1795, however, we are eyeing a retest of 1800 today. Binary options traders can try taking reversal strategies until a break occurs and once a break is clearly seen, obviously up options can be taken with what looks to be a very low risk scenario.

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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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