60s Binary Options – Live Trade Example

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Welcome to the sixth lesson of the News Trading in 60 Second Option course. On this lesson we will teach you how to trade 60 second options, day in and day out. We will teach you a strategy that only uses bounces, breakouts, momentum and pure price action.

Okay, the first thing you need to know about this strategy is that we are only going to trade it with the major currency pairs. We can also trade it with stocks but stocks only trade during the New York session. If you have problem in your schedule and you cannot trade the New York session, well Forex is your better option.

As you can see here, we already have the major currency pairs on our six charts. We have the Euro/US dollar here, the GBP/USD, the Euro/GBP, the US dollar/Japanese Yen, the Aussie/US dollar, the Euro/Yen and we can also trade the US dollar/Swiss Franc with the strategy.

This strategy is based on the one minute chart. This is the most important thing of all. Because we are trading the 60 second options, we need to analyze price action and our levels on the 60 second charts or the one minute charts.

So let’s jump right into the action. This is the Aussie/US dollar one minute chart, as you can see here. This is a naked chart. The only indicators that we’re going to use are a single moving average, the 21 exponential moving average. There you go. And we are going to use an oscillator just to know when price is overbought and oversold and we might be hitting a level of reversal in the market. We are going to use the Stochastic Oscillator.

So the 21 moving average is our directional tool. If we go to past price action, just like this, you can see that actually the 21 moving average can be used as a frontier for bear and bull moves. This means that when price is trading below the 21 moving average, the direction of the market is down and when we have a crossover [inaudible 00:03:03] price starts above it, then it means that the market direction is up and we have a bullish momentum in our hands.

Let’s go to the strategy. Let’s say that we started trading at right here. This is where we started trading. I just picked up a random moment in the market so you can see that this strategy works whenever you are in front of your charts and you correctly apply it.

The first thing you want to do is grab the horizontal line tool and draw levels of important support and resistance on your charts. You don’t want to draw every single high and every single low on your chart because it will be overloaded. You might get caught up in the middle of a chop because your levels are too close to each other.

This is an important level because price was trading above it, tested it as support right here on this spike low, then when it broke down it tested it as resistance and carried on with the breakout. Then it went all the way back up here, tested it as resistance, strongly rejected it and then of course, we had some kind of a fake out and a move up. And we are right here, okay?

The second level we are going to draw is this one. Why is this level also important? Because this level was tested once here, twice here and three times before it broke and then was tested as support.

Remember that the important levels are the levels that were once resistance and now are being tested as support or vice versa. Levels that were once support and are now being tested as resistance.

Now we are going to draw this spike low because it is the low of the move. Now we just start to wait for triggers to buy our 60 second options. The oscillator will be used as an overbought and oversold market condition indicator.

In this case, let me give you this example. This is a clear example of a trade that we would have taken with this level of resistance being tested and the stochastic oscillator giving us an overbought reading. It clearly denotes indecision in the market. Then we get a red candle, meaning that we have a reversal right at resistance and we have a stochastic crossover. We can start buying 60 second put options at the end of this candle.

We would have ended up in the money once and twice, because the stochastic is pointing down and we have a strong momentum and we have room for a second trade to the downside.

This is just an example. We are now live, well not live. But we are now trading or trying to trade with this strategy. As you can see, nothing has happened yet. We have a break below the 21 moving average. When we have a break below the 21 moving average and of course we forgot to draw this level of resistance, which is important because we tested it and rejected it.

And now we broke it. When we have a breakout of this level of resistance we can buy a put option on this currency pair. But the stochastic oscillator is giving us a signal of oversold levels. Which means that even though we are below the 21 moving average and we just broke below a level of support right here, we cannot take the trade because the stochastic oscillator is giving us a signal of exhaustion in the move.

And as you can see, the next candle, let me just thicken this out for you. Let’s go back. And as you can see, the next candle is a blue candle, which means that if we would have taken this trade and bought a put option right here, we would have ended up out of the money.

Now we don’t have a trade yet. This is just choppy range. And when price comes all the way up here and tests again, this level of now resistance and then we get an engulfing candle, this is another very serious matter.

We are going to use single candlesticks patterns and double and triple candlestick patterns a lot on this strategy. So we have trade number one right here when we come back and test this level as resistance. It’s clearly rejected by the 21 moving average and this engulfing candle. So right here at the close of this candle, let me thicken out for you because we want to see actually where we are getting the trades on.

At the end of this candle, we can buy a put option, a 60 second put option, and we would have ended up in the money because we would have bought this option at the beginning of this candle, or the open of this candle. Which is this level right here. And the candle closed down here.

Which means that our put option would have ended up in the money. This is the first trade that this strategy triggered for us. We are going to put on a rectangle here because we are going to count how many trades we made, how many trades ended up in the money and how many trades ended up out of the money.

Because, yes, this is not a fool-proof strategy. We will have trades that end up out of the money. And remember, the 60 second options is not a type of binary options that you want to take lightly. You need to have solid setups in order for you to trade them profitably.

Now we have a continuation of price and then price makes this dodgy. It’s not dodgy, but it’s a candle that shows indecision in the move. Why? Because the open price and the closing price are very close to each other. The weak low denotes that even though bears pushed price all the way down here, they couldn’t actually continue with the move because the bull pressure that was around this level of support was strong enough to make the candle close all the way down here.

So this is a dodgy one. This is a signal of reversal, so we might be thinking that this is a good spot to buy a call option. Of course we buy a call option and we end up in the money. Why wind up in the money? Because this signal of exhaustion of this move down is giving us an entry at the start of this candle. This candle ends up or closes all the way up here giving us a second trade that ends up in the money.

As you can see, this is not a systematical trading strategy. It cannot be like that. You have to put a little bit of effort if you want to trade the 60 second option.

We have this level of resistance that was tested then as support right here. Now price action continues and then these candles are untradeable. This is a non-tradeable candle because price is in such a tight range that it’s not profitable for us to buy any kind of options here.

But then we get this huge candle down. This huge candle down means that if you can see here, we are trading below the 21 moving average. We have a move down, then we have a correction to this area of support. We tested it as resistance and we bought the first put option.

Now we went all the way down here and tested this area of support as support. And after this [inaudible 00:12:48] dodgy, we bought a call option that ended up in the money. Price moved all the way up here to test the 21 moving average again as resistance. We have this huge engulfing candle and we have a stochastic crossover right here. Which means that we can buy a put option even though we have this level of support right here. This move is so strong that a continuation is due.

We buy a put option at the end of this candle and this candle closes right here, giving us a third winning trade with a strategy that simply follows price action.

This is untradeable. Well, this is where we get the first fake signal. We might get caught out on it. We bought the put option that ended up in the money and then we have a bullish engulfing candle. Meaning that here we can actually think of buying a call option because of a rejection of this level of support.

But the thing is that if you look closely to the stochastic oscillator, we don’t have a crossover and the stochastic oscillator is not giving us a signal to buy call options. So we pass on this one.

Here we had a crossover. Here we don’t have a crossover, in fact the two moving average of the stochastic are very far away, giving us a signal not to take this trigger. And then price action starts to chop all the way down here.

Here we have a bearish candle that closes below this low, meaning that we could have a condition of a continuation of the down trend, but the stochastic is not giving us a signal.

The stochastic has a crossover right here. Right here we have an inverted hammer. This is another candlestick that denotes a change in the price direction. You can actually read the candlestick. This candlestick means that the bear pressure was not enough to push price down. Price closed all the way down here. This weak denotes a strong momentum in bull pressure.

So this candle might give us a signal of reversal of this main move down. We have a stochastic crossover right here, which means that after this second bull candle, we can buy a call option on the 60 second that would have ended up in the money.

Remember, stochastic crossover and level being broken. Let’s continue. We have our fourth 60 second option that ends up in the money. Right now we have a momentum to the upside.

The thing about this is that here we have an indecisive a red candle, but the stochastic oscillator is pointing up very strongly which means that we have momentum to the upside. When we have a bull candle after this indecisive bear candle, we can again buy a call option that would have ended up in the money. Because the stochastic is pointing up even though we have an indecisive bear candle right at the 21 moving average.

The thing about this is that this is a fake setup. If we’re only focusing on the candles and this missed completely, the stochastic, you can see that we could have actually thought that this was just a correction and a continuation of the move down.

But by using the stochastic we know that the momentum to the upside is very strong. But we can’t buy a call option when this candle appears. We can definitely not buy a call option at the start of this candle. We need a close above these highs to know that in fact we have a continuation of the move north. And we buy a call option that would have ended up in the money right here.

Then price continues to move to the upside. Right now we are looking to buy put options. Why? Because we are in an area of overbought conditions.

When we get this hammer candle, we can actually buy a put option at the close of it. Because we have a stochastic crossover, the fast moving average of the stochastic crosses below the slow moving average. This would have ended up in the money too.

As you can see, this is how you actually trade the 60 second options. There’s no magic behind it. You have to work out your reading abilities. By using the 21 moving average as a directional tool and the stochastic oscillator as a confirmation of the setups, and of course by using candlestick patterns, you can have a very, very profitable 60 second option experience.


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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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