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UNCERTAINTY AND STRATEGY

BitCoin/CNY 6349.755 09:00 24.01
FTSE F-MAR17 7091.500 09:00 24.01
USD/RUB 59.148 09:00 24.01
USD/NOK 8.35090 09:00 24.01
USD/CHF 0.99882 09:00 24.01
OIL-MAR17 (BRENT) 55.585 09:00 24.01
SBERBANK 168.830 09:00 24.01
GAZPROM 149.230 09:00 24.01
NZD/CHF 0.72218 09:00 24.01
CAD/CHF 0.75336 09:00 24.01
NZD/USD 0.72303 09:00 24.01
CAD/JPY 85.407 09:00 24.01
AUD/USD 0.75683 09:00 24.01
AUD/JPY 85.697 09:00 24.01
GBP/USD 1.24934 09:00 24.01
EUR/USD 1.07478 09:00 24.01
TADAWUL 7081.200 09:00 24.01
VTB BANK 0.068665 09:00 24.01
ROSNEFT' 388.950 09:00 24.01
OIL-FEB17(WTI CRUDE) 52.550 09:00 24.01
SILVER 17.145 09:00 24.01
GOLD/EUR 1129.375 09:00 24.01
USD/JPY 113.236 09:00 24.01
EUR/JPY 121.703 09:00 24.01
GOLD VS OIL 21.8394 09:00 24.01
USD/CAD 1.32582 09:00 24.01
S.BANK INDIA 255.775 09:00 24.01
AXIS BANK 448.900 09:00 24.01
TATA STEEL 464.325 09:00 24.01
TATA MOTORS 541.725 09:00 24.01
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After the initial euphoria following the Fed’s decision not to taper it’s bond buyback program, markets are coming back down to earth. Question on our minds though is why so drastic and for how long. The initial question, in terms of the binary options perspective is probably just as important as the question of time. This current downward correction across all USD based assets isn’t to be taken lightly. The fact that the markets managed a colossal gain last week on the news that QE3 was still here, for now anyway, was not enough to keep markets buoyant and this is now evident. Market investors and binary options traders are now training their focus on other targets.

 

For starters, the markets aren’t being provided the type of impetus due to a complete lack of any meaningful news that could provide markets a reason to move in a positive direction.

 

The S&P ended up losing 0.47% to 1701. The drop, while rather large for a correction as it is already coming off the heels of yet another drop, is a very interesting fall. The fact that the 1700 level maintained itself is a key insight into the coming day’s trading. Most binary options traders probably took down options as soon as 1700 broke yesterday, and rightfully so. Over the course of the last 12 months, there have been over 50 breaks recorded by the index and this is the first false break we’ve seen. Losing 1 isn’t the end of the world if you’ve been following this index, far from it.

 

But for the trading day ahead, due to this false break, we are going to be a bit hesitant about taking another down option on any initial break of the index. Instead, we recommend taking advantage of reversal strategies. For those unfamiliar with this strategy, it just means that instead of going with options in the direction of a break, you instead take opposing options on each test of the level in question.

 

For example, with the S&P today, a reversal strategy would mean that the binary options strategy would employ up options on every test of the 1700 level. So every time the market heads towards 1700, but doesn’t break below, the binary options strategy of choice would be to take up options. Obviously the risk level is much higher with this type of strategy.

 

The reason for the higher risk isn’t due to the direction of the market but rather due to the traders’ need to take numerous trades in order to make the strategy viable. The market tends to “touch and go” when there’s a reversal in play; touching the support level and then heading higher. If everything plays out according to plan, the binary options strategy can be used and used again in a rinse and repeat manner.

 

We do recommend though keeping the trades very short in expiry (no more than 30 mins) and keeping the trades as small as possible while using a binary options trading strategy of this type.

 

14:00 consumer confidence report could add some fire to the market.

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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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