Yesterday, The Federal Reserve, the US Central Bank, decided not to change the interest rate but did signal a reason for optimism. Ben Bernanke, the bank’s chairman, provided some insight into the state of the US economy and binary traders were probably able to capitalize on the optimism in the US stock markets. The DOW was up 0.69% and the S&P was up 1.36%. More importantly, our trading signals on the Nasdaq proved correct as the stock index headed past 3000 and finished at 3029, a rise of a huge 2.3%. On days where the market goes up that fast and that high, we sometime wish we were futures traders, but we can’t complain. Our trading strategy is based on a simple ability to get the direction correct, not the depth. What this means is that we know our limitations. We know that the market has a probability to move in one of 3 ways (up, down, or remain in a range). Based on each probability, we create a trading signal.
So, the real issue here is once a trader knows in what conditions he trades best, he should try to focus at least 80-90% of his trades on that specific market dynamic. Yes, this could get boring and systematic, but that’s exactly what we want as traders; a method.
So looking at a market like yesterday, where everything went higher and fast, it was easy to be right. But most traders would have had a hard time deciding when was the right time to exit the trade. With digital options, that decision is not necessary and as such, our method stood the test of the market forces and we came out with profits.
With commodities and forex trading very difficult these days with binary options, as they are firmly entrenched in a range, it is simply easier for traders using binary options to focus on stocks and stock indices. Trending markets are easier to focus on for binary traders and as a result, our trading signals have focused almost solely on these asset classes.
The only news today of any significance is the US initial jobless claims at 13:30 GMT. It’s not the type of economic indicator that can really move markets, but we do recommend staying alert at that hour so as to avoid unnecessary trading losses.
Yesterday, we told our readers to keep focused on Exxon Mobile, which is nearing the 87.5 level. Well, it did get close yesterday but we warned that it would take a day or so to break 87.5 and so today looks to be the day. The market has had a very hard time breaking this level but it could be today or possibly tomorrow so keep this stock on your watch list. Any break of 87.5, which is a very strong resistance that may be tested 2-3 times before breaking, will warrant a BUY signal and allow binary traders to take an Above option with a low-risk trade.
We couldn’t open a trade on APPL at the level we wanted as due to the strong Q1 data from Apple, the stock opened with a large gap that eliminated our trading signal on the stock. So, today, if you want to trade APPL, focus on the 622.5 level which is a day trading resistance. Any break will allow Above options