The Two Most Profitable Trade Options – Learn To Apply Them
Although binary options offer us multiple different trading options it’s important to know when and how to apply each. This is highly dependent on market condition in combination with the DTFL trading strategy. Sticking to the traditional Call/Put option will certainly be the most profitable, using different expiration times to stack the odds in your favour! As we all know there is no guarantee in any form of trading. Thus I cannot emphasize enough on the importance of only selecting high probability trade setups. This is where the magic of DTFL meets binary options trading, allowing you to trade with the flow of the market, instead of against it.
A tough task for some…
We are going to shed some light into knowing when to and how to apply the best trading option to each possible setup. It all comes down to a little bit of patience whiles keeping things simple.
Call/Put – Using The 60 Second Option Expiry Time
A fairly new option introduced to the industry used with much success. Only used in extreme volatile (fast moving) market conditions after something we call a Stop Hunt took place. This causes wide spread candles, pushing the market into a bearish or bullish direction. We can then use this to capitalize from the sharp movement in price.
What Is Stop Hunting?
Stop Hunting is when “Smart Money” pushes price in one direction, forming a pin bar through a significant or key level. Price must break the level by at least 3 – 5 pips. To be a valid signal we require price to close above/below the level of interest.
How To Go About Entering The Trade
- Our area of interest is marked in red and thus where we are looking for the Stop Hunt to take place before the market turns. The significant level is in this case the Asian range low. As soon as priced reached the target area you can also notice the increase in volume indicated by the green bars at the bottom of the chart.
- After we see the break of the previous candle we can then jump into the 60 second trade. Also note that the Stop Run candle closed without a wick to the upside. Our second trading opportunity thus occurs once the next candle opens.
Trading Tip: Don’t be greedy. After taking your second trade it’s time to sit back and relax. If your first trade happens to end up expiring up out-the-money, it might not have been a valid Stop Hunt.
Call/Put – Using The 15&30 minute Option Expiry Times
This feature has been available for trading since the very start, allowing traders to profit from longer expiry times. Although even longer expiries are available, the 15&30 minute stands out above the rest for obvious reasons. This allows us to limit our time exposed to the market yet offering the opportunity to trade A+ setups. One can use the “M” or “W” candle formation at a level of interest. When used in conjunction with the previously explained Stop Hunt one can further increases the probability of the selected trade. This option can be used in moderate to high volatility markets commonly associated with these candle formations at key levels.
What Is The “M” & “W” Formation?
These candle formations can also be seen as double tops (M) and double bottoms (W). This can occur when Smart Money traps traders long or short before moving price in the opposite direction. They do this by testing an important level of interest twice, attempting to Stop Hunt. This is also a way SM induce buying and selling. Taking these formations at a key level is a must and is otherwise meaningless.
How To Go About Entering The Trade
- We can identify a clear “M” formation indicated by the arrows in the example above. Our level of interest is the previous day high, shown by the light blue dashed line. Also note that there is a wick to the upside that took out possible traders that were long further inducing buying. Smart Money thus sells into the buying pressure causing the “M” pattern to complete. The volume spiked significantly when this occurred; giving us a clue that SM is involved.
- As soon as we see the second leg of the “M” pass through our previous day high we can then enter into our 2 trades. We always try and execute both the 15&30 minute expiry times at more or less the same strike price. This enables us to take full advantage of this powerful setup, increasing the odds of winning the second trade if the first should fail.
Trading Tip: Placing 2 trades at the same time can be risky. Always be picky, only selecting the clear and obvious formation. Keep in mind that it’s the level that makes the setup so powerful. The same formation at an insignificant level means absolutely nothing!
Getting to the point
Patience and discipline plays a major role in executing these setups correctly. Remember, Rome was not built in a day. Practice and screen time will benefit you greatly, allowing you to spot these profitable setups with ease. This just once again proofs that the DTFL strategy not only gives you the edge in Forex but binary options trading to!
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