May 21, 2013
Binary Options End of Day Strategy
Alright, now that I have secured my profits for the month, I am going to test out a new strategy for the next few weeks. All the results will be documented here on this page so you don't have to search through my blog for them. The goal is to have an 80% success rate.
First, let me lay out the strategy. It involves probability and I developed this strategy while looking at the forex pair: GBP/USD. Some like to call this cable. Anyway, in order for a strategy to work, it needs to be universal. Secondly, it has to actually work with its parameters or else it won't be any good.
I was looking at this underlying asset's day high, low, and close over the past 5 days. What I noticed was the closing price each day was almost always higher than the low and lower than the high. Basically, it never ran one way for the entire day. There was always a pull back to the middle.
If you look at the daily pivot points (go to that post for full calculations) for this underlying asset, you will see that to make profit on end of day binary option expiration trades, you simply need to identify a high probability of the price being at a day's high or low and then enter your position.
Don't enter the position unless the price is above the R2 (for puts) or below the S2 (for calls). For even more extreme conservative moves, you could choose to not enter until R3 or S3 is surpassed. Those levels represent a daily pricing level of relative support and resistance points given the previous day performance. It gives you a better idea of when to enter an end of day put position or call position.
Remember that your goal is find the day high or low and enter a trade accordingly. The benefit of doing this with binary options trading is you won't have to guess where intra-day prices are headed. It makes things a little more clear and simple.
So, if the price is trading at or below your Support 2 within the pivot point levels, you would enter a call high/low option that expires end of day. If the price is near or above your Resistance 2, look for the put side. The key behind this strategy is patience. You have to be able to let the price go far enough up or down, so your end of day expiry position makes sense.
I have given you the logic behind this. Now comes the fun part. Testing! I will be using a 24Option Demo account. Switching it up from my live TradeRush account for the sake of variety. The first trade is on the GBP/USD (High volume underlying assets are recommended for this).
Day 1 May 22, 2013
Pivot Point Setup for GBP/USD: