Whether you are a novice or experienced binary options investor the importance of having atleast one practical and reliable investment strategy can dictate whether or not you will succeed or fail in this highly-engaging and demanding investment industry known as binary options.
For those of you who have been searching relentlessly for the Holy Grail of trading strategies I will be the first to tell you that they don’t exist and if they were to exist no wise man would share it with you due to the fact that it would probably result in the end of this industry by putting all binary option brokers out of business.
With this imperative truth in mind, we will cover a simplistic and profitable trading approach that I’ve been taking advantage of the past few years and will continue to use well throughout 2018 that is gauged towards investors who work the typical 9 to 5 job and can’t invest during the New York trading session.
Now for those of you who don’t possess much of a solid technical analysis background don’t worry, this strategy is more fundamentally comprised than based on technical analysis.
Perhaps the best advantage about this strategy would be how it requires the use of zero technical indicators although having access to a charting solution such as FreeStockCharts, MT4, and MT5 is recommended so you can plot the highs and lows that we will be taking advantage of when applying this strategy during the early market hours.
Although virtually no technical analysis knowledge is not required when utilizing this strategy having a solid foundation in understanding how the market hours merge with one another along with having the innate ability to identify high and low market points will be the determining factor to whether or not you succeed or fail with this simple trading strategy.
Forex Market Hours: A Better Understanding
Perhaps the best way to obtain a better understanding of how the market hours work and merge with one another would be to visually see how these investment sessions work in tangent with one another. In the picture below you can obtain a better understanding of how the four major market hours work with one another.
The market hours presented in the image above are all reflected in Eastern Standard Time (EST). Now as you can see from the image above, every investment day (Monday through Friday), there occurs a one hour overlap between the closing of the Tokyo session and the opening of the London session.
This overlap occurs between 3 A.M. and 4 A.M. EST as seen in the image above. Now here is the interesting fact, it is estimated that over 40% of all Forex investments are executed and processed within that one overlapped hour which results in a large amount of volatility and market volume being present.
Applying Market Hour Knowledge To Strategy Concept
So while these large volumes of investments are being processed during the opening of the London trading session it oftentimes results in an indirect spike (may be bearish or bullish) in the price action of the GBP/USD (Great Britain Pound/United States Dollar) currency pair. Now if you were to take the time to plot the highs and lows of the GBP/USD currency pair you would notice how the highs or lows of this currency pair is typically obtained between 2 A.M. to 5 A.M. EST.
Whereas the next corresponding market high or low for the GBP/USD will more than likely occur throughout the duration of the New York trading session, typically from 8 A.M. to 2 P.M. EST. So if you believe that the daily high or low for the GBP/USD currency pair has been set at the open of the London trading session then you can more accurately predict the future direction of our targeted currency pair for the remainder of the investment day by placing a Buy or Sell investment in correspondence to the appointed market high or low value.
Placing High Probability Investments
Identifying market high and lows for targeted assets is about as simple as it sounds, you simply load your charting solution, look for the market high or low of your asset (in this case the GBP/USD) and determine if that is a market high or low.
If you determine that it is a market high then you can better predict that the future direction of the GBP/USD is likely to go in a downward direction (Sell trade) and vice versa for if you believe a market low has been set which would result in you placing a Buy investment.
In the case of using the Nadex trading platform, if you witness a decisive bullish or bearish direction movement from the GBP/USD you can make a more informed and concrete decision about the future direction of the GBP/USD price action.
Typically when I utilize this investment strategy I plot the GBP/USD market high or low at the time, choose an entry point that can maximize my earning potential then set my contract expiration to 3 P.M. EST that same day.
Now when your investment lands in-the-money, each of your contract settlements will expire at a value of $100 resulting in a solid profit generated.
However, if the GBP/USD isn’t cooperating and moving in your predicted direction then the option to sell your contracts early is always a great way to deduce trading losses or can even serve as a way to take a partial profit for if your investment still is in a profitable margin but you don’t think it will stay there until your original expiration time.
That is perhaps one of the greatest advantages about the Nadex trading platform, the ability to take partial profit gains and not be “locked-in” your investment or having the ability to minimize profit losses by exiting your investment early.
Having access to a simplistic yet highly accurate trading strategy for binary options is just about as good as finding the Holy Grail of investment strategies. Many of you know by first-hand experience how difficult it is to find a reliable investment strategy that will stand the test of time or simply just finding one that doesn’t involve the usage of 5 or more technical analysis indicators.
Perhaps the best advantage about this strategy would be how simple it keeps investing, K.I.S.S. (keep it simple stupid) is a well-known yet inquisitive acronym to keep in mind when taking on the binary options industry that I have abided by throughout my five years in this industry.
Now for those of you who took the time to read this strategy I would like to wish you the best of luck with your investing endeavors and if at anytime you have any questions in regards the application of this strategy or just binary options in general please feel free to leave a comment below and I’ll make sure to get back to you!