New Binary Option Strategy

In a previous article, the Big Ben Strategy for Spreads was presented. Darrell Martin worked closely on the development of both strategies with Ann and Joseph Rivera, and Jessie Van and Venkat Jayaraman, all traders at Apex Investing Institute. Whereas the Big Ben strategy is designed for spreads, the London Reversal is set up for binary options.

Knowing the London Stock Exchange operates from 8:00 AM - 4:30 Pm GMT, except on public and bank holidays, can prepare you for this new strategy. With the time difference, this means the opening is at 3:00 AM ET, but this strategy actually works when things slow down on the GBP/USD around 11:00 AM ET.

Rules:
This simple strategy has only a handful of rules.

• You need to use a Deep In The Money (DITM) Binary with a 3:00 PM expiration.
• A Full deviation move on the deviation tool makes it a valid trading day.
• If no black line, indicating a full deviation move, has been formed or crossed, there is no trade for that day.
• Use GBP/USD 15 Minute Candlestick charts with the Apex Sharpshooter Template.

Once you have your NinjaTrader chart set up, utilizing the Sharpshooter template available at Apex Investing, you will see such indicators as Deviation Levels, Izones, Expected Volume, Expected Range and Trend Catcher (TC) arrows. The indicators will show you where the market is expected to move and the TC arrows will signal the direction of the trade.

In the red box in the following image, it shows the movement caused by the London Opening. Look at the bottom of the chart, in the Expected Volume area you can see what Joseph calls “The Middle Finger Spike,” with volume receding around 11:30 ET.

Click HERE to view a larger image.

In the Deviation area of the chart, note that a black line formed, meaning that a full deviation move had happened sometime during the day signally a valid trading day. You are also looking at the “lava”, red or green, which indicates how far the market has retraced from the low or high of the day. Wait for the lava to be receding and not hugging the blue line before entering your trade.

The Izone is for confirmation you are taking the trade in the right direction.

Remember this is a deep in the money strategy where you want to enter around 80-85 if buying, possibly as low as 70 but definitely not an ITM strategy. As such, you can plan your profit to be between $15-20.

For the example trade, Joseph entered the trade selling the GBP/USD >1.5340 3 PM contract for 13.50, risking $86.50. It was held until expiration and settled at 1.52918 giving a profit of $13.50.

The image below shows how the trade played out.

Click HERE to view a larger image.

You can see how the signals were all there. The rules were followed and the trade was profitable.

Always try a new strategy in demo before going live. Once you are comfortable with the strategy, to increase your profit increase the number of contracts.

To learn more about any of the indicators mentioned for this strategy, go to www.apexinvesting.com. There you will find traders willing to help you perfect this and other strategies.