70+% Accurate with Daily Action
So we’re looking for options trading signals in our quest to stay one step ahead of the market and we think we may have stumbled on to something over the past month or so.
We’d been noticing a strange 10 minute or so shift in the fortunes of the forex trading markets (and hence making small ripples in the equities indexes as a result). We’ve come to determine that these small ripples happen to coincide with the funding demands made by the Federal Reserve on bidders for treasury auctions. The moves have been typically taking the market from risk negative to risk positive (a.k.a weakening Yen and USD temporarily). When a binary options trade is made on this kind of shift of the nature we like to do (the hedge and double) – ultimately we end up with a tiny “win zone” as the forex market shift reverses to baseline nearly as quickly at had begun. As a result most hedge and double trades on this 1pm auction movement end up out of the money (a small loss for the hedge and double position).
Timing Early in the Hour Lends Itself to a Binary Options Trade
The new trade then is to try to take an intra-day position in the Yen or USD to try to capitalize on what we expect will be a weakening of the Yen (relative to just about all the majors), or alternatively a position on the USD expecting a weakening versus all the majors except the Yen. Should the USD be strong leading up to the auction versus AUD (for example) we might try a binary option put on the AUDUSD as the pair temporarily is strong on AUD during the auction prior to return to trend once the Fed auction funding activity dries up. The move is quick: we’ve been seeing it occur between 1:00pm and *maybe* 1:05pm with a peak somewhere around 3 minutes after the hour.
We’ll then have to hold our collective cajones for the balance of the hour as the market makes its move but we’re pretty confident the market will return to trend (whichever direction prevailed prior to auction) and leave the trade naked unless we see a real/genuine risk reversal (which we’ll hedge and double) prior to binary options lockout.
We’ll see how it works out. Trend is opposite what we’ve been looking for on this trade (ie we want strong dollar going into the auction… today we have weak dollar… sigh).
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