Five Binary Trades on the EURUSD on June 4, 2013

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Trading EUR/USD Without A Stop Loss Using Nadex Binaries

Taking a Look At Nadex Binaries

Feast your eyes on the trade below on the EUR/USD from last Friday.

The EUR/USD was bouncing in a range since about 5:00 pm ET. It also made a bit of what could be called a double bottom.

Then at 7:45 pm, it broke out of the range at the price of 1.3701.

When trading forex, you probably would have wanted to have your stop a few pips below the range. This would have put the stop about 25 pips away ($25.00 on a EUR/USD mini-lot), instead of trading EUR/USD spot and dealing with the whole stop loss, use a Nadex Binary. Then choose the EUR/USD > 1.3725 3:00 pm binary. It would have cost $25.00, the same risk amount as the spot.

In the aforementioned article, this simple trading tip was given for Nadex binaries:

“A Nadex binary will be worth approximately $50 when the underlying market is at the strike you bought or sold no matter how much time is left till expiration. Why? Because there is a 50/50 chance it will remain at that price for minutes/hours/days. This is huge in understanding how to trade Nadex binaries.” You can liken this to how the delta of an option will be at 50 when the market is trading at the strike price of the vanilla call/put option.

Therefore, traders know that if the EUR/USD reaches the strike price of 1.3725, the binary will be worth $50. This gives 19 hours and 15 minutes for the EUR/USD to move up 25 pips.

No issues were expected, but if there were, the take profit would be filled. So, after the entry order is filled, then put the take profit to sell at $50.00 and consider walking away.

The risk and profit management is in place. At 10:00 PM ET, two hours and 15 minutes after, traders got a notification that the take profit was filled without ever having to worry about getting stopped out by EUR/USD moving the wrong way.

There are multiple ways to trade Nadex binaries such as swing trading, directional, range trading, breakout trading, premium collection trading and more on Nadex binaries.

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In addition, Nadex is a US-based CFTC regulated binary exchange (the CFTC is who regulates the CME etc..). On Nadex binaries, the markets are open from as early as 6:00 pm ET to as late as 5:00 pm the next day, giving the ability to trade day and/or night on intraday, daily and weekly contracts. Traders can trade binaries on forex, US and international stock index futures, and commodities like gold and oil.

You get a free demo trading account at Nadex.com under the ‘Trading’ tab.

If you would like to learn more about trading Nadex binaries check out this 16 video course absolutely for free on Marketfy.

To see examples of trading on Nadex binaries and spreads, see these articles posted on Benzinga, click here .

EUR/USD Trading Strategy

    Quentin Dixon 4 years ago Views:

1 EUR/USD Trading Strategy TRADING SIGNALS TRADING EDUCATION TRADING STRATEGIES Kathy Lien & Boris Schlossberg TRADING SIGNALS & TRADING EDUCATION

2 Risk Disclosure BKForex LLC is a registered Introducing Broker with the NFA member # ( ) Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts. The information, including Commentary and Trade Ideas, provided on bkforex.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. BKForex LLC and bkforex.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. BKForex LLC will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on BKForex LLC. BKForex LLC do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

3 Trading the EUR/USD Like to trade the EUR/USD? So do we! At BKForex, a large part of our trading is short term and the EUR/USD is one our favorite currency pairs to trade. The EUR/USD is the world s most actively traded currency pair and for many forex traders, this activity provides opportunity. Trading Short Term can be very different from trading Long Term because short term trading usually involves getting into and out of positions quickly. Therefore when trading Short Term we try to look for: 1) Currency Pairs with greater liquidity 2) Time Zones with more activity Liquidity and activity helps to drive currency movements, which is what we want for our day trades. While liquidity can depend on the broker, most offer the greatest liquidity and tightest spreads on the EUR/USD. As for time zones, the London and U.S. trading sessions have the most activity making it an ideal time to trade short term strategies. In our experience, short term trading is the most effective between 4am to 12pm ET or 9 to 17 GMT.

4 Decline in Volatility There are many different ways to trade the EUR/USD but over the past year, the decline in volatility in the Forex market has made range trading more popular than trend following strategies. The following chart shows how much 3 month EUR/USD option volatilities have fallen over the past 5 years. At approximately 8%, the volatility in the EUR/USD dropped to its lowest level since For forex traders, lower volatility can mean tighter intraday ranges and a lower likelihood of breakout or runaway moves in a currency. This decline in volatility can be seen not only in the EUR/USD but all major currencies. Learn to Adapt to Decline in Volatility Volatility may remain low in 2020 as central banks continue to pump money into their economies and keep interest rates near zero. When the recovery gains momentum, volatility could increase, but between now and then, there may be more opportunities to pick tops and bottoms than to join a trend. For this reason, we would like to share one of our favorite short term EUR/USD trading strategies – the X-Treme Fade. Source: Bloomberg

5 Trading Strategy X-Treme Fade Day Trading Strategy Type: Mean Reversion (Picking Tops & Bottoms) Time Frame: Classification: 15 Minute Day Trading

6 Trading Strategy X-Treme Fade Strategy Tools Indicators: Bollinger Bands Average Directional Index (ADX)

7 Indicators Why Bollinger Bands? Bollinger Bands is a technical analysis indicator created by John Bollinger in the 1980s. The bands consist of a moving average and a standard deviation above and below the moving average. Typically, Bollinger Bands are set at 20 period, 2 standard deviations which means that the value of the upper band is 2 standard deviations above the moving average. The lower band would be 2 standard deviations below the 20 period moving average. In the X-Treme Fade strategy, we use 2 sets of Bollinger Bands: 20 period, 2 standard deviation 20 period, 3 standard deviation In statistics, 95.45% of values are suppose to lie within 2 standard deviations of the average while 99.73% of all values are suppose to lie within 3 standard deviations of the mean. In plain english, this means that a move to the 2nd standard deviation Bollinger Band is rare but a move to the 3rd Bollinger Band is even rarer. Our X-Treme Fade strategy looks for the EUR/USD to make an extreme move on a short term time frame (15 minute chart) by hitting the 3rd standard deviation Bollinger Band. BUT THAT S NOT ALL! Before picking a top or bottom, we want to wait for the EUR/USD to close above the 2nd standard deviation Bollinger Band for a long trade and below it for a short trade – this is important because it confirms that the previous move in the EUR/USD is losing momentum. Why Average Directional Index (ADX)? The Average Directional Index or ADX measures strength of trend and when picking tops and bottoms, we do not want the strength of the trend to be overly strong. Therefore, we want the ADX smoothing line which is set at 14 to be less than 25. ADX setting = 14 Look for ADX 8 X-Treme Fade Strategy Long Trade Guidelines *Only look for setups between 4am to 12pm ET (9-17 GMT) 1. Look for EUR/USD to close at or BELOW the 3rd standard deviation Bollinger Band 2. Wait for EUR/USD to rally and close ABOVE the 2nd standard deviation Bollinger Band 3. Check to see if ADX 9 Long Example #1 Here s an example of a successful long trade in the EUR/USD

10 Long Example #2 Here s another example of a successful long trade in the EUR/USD

11 Long Example #3 Not all trades will work out which is why it is important to have a stop. Here s an example of a failed EUR/USD long trade. *Stops are subject to slippage by broker

12 X-Treme Fade Strategy Short Trade Guidelines *Only look for setups between 4am to 12pm ET (9-17 GMT) 1. Look for EUR/USD to close at or ABOVE the 3rd standard deviation Bollinger Band 2. Wait for EUR/USD to fall and close BELOW the 2nd standard deviation Bollinger Band 3. Check to see if ADX 13 Short Example #1 Here s an example of a successful short trade in the EUR/USD

14 Short Example #2 Here s another example of a successful short trade in the EUR/USD

15 Short Example #3 Not all trades will work out which is why it is important to have a stop. Here s an example of a failed EUR/USD long trade. *Stops are subject to slippage by broker

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Binary Strategies for Riding the EUR/USD to Parity

With Draghi spending nearly $67 billion per month, bond yields have fallen leaving the EURUSD with no fundamental reasons to

One can almost hear the sound of the EUR/USD sliding. The peak of April 30th, 2020 at 1.3867 looks like an ancient landmark, before the great flood of Quantitative Easing (QE). Only one year later, within sight is the EUR/USD parity with the US dollar.

The last time the EUR/USD was at parity with the dollar was in October 2002. With the EU’s Draghi spending nearly $67 billion per month on buying bonds, bond yields have fallen leaving the EUR/USD with no fundamental reasons to strengthen (see chart below).

The question now before us is: How can the forex trader join the ride down to parity? Let’s explore several ways.

First, we can consider participating in the spot forex market. It is not too late to take a position trade and enter a sell on the EUR/USD. The question is timing. Perfection here is the enemy of the good. The rule of 3 is a reasonable approach. In other words, whatever amount one decides to put on a trade, divide that amount into three parts.

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  • One-third could be used to enter the market on a short.
  • The second third can be triggered by a swing failure, where the EUR/USD retraces back, perhaps 100 pips and then starts resuming the ride down.
  • A final third, just leave on the side for future entry.

While this is not a precise approach, it avoids an all-or-nothing approach. There is a lot of time to be right on the 900 pips distance to parity.

Another approach that adds some risk management to trading the slide in the EUR/USD is to place a weekly binary option on the EUR/USD. This can be done at any binary option platform that offers longer-term durations. For example, the NoaFX binary platform offers 5 day durations, which is essentially an end-of-week play on an underlying market.

In the image below, we see a real “Down” binary trade with 4 days 23 Hours and 59 seconds, which I had put on. Putting on every Monday morning such a trade will provide the opportunity to ride the EUR/USD down to parity, with limited risk.

Let’s briefly review some further facts about binaries. The Weekly binaries are fixed payouts and the trader gets a fixed return. In the above example, the return is $17.50 on a risk of $25, or 70%. If the price of the underlying market settles as a winner, the risk is the amount paid. The binaries that provide an opportunity to bet whether the underlying market will be higher or lower are, in effect, At-the-Money (ATM) binary trades.

An advantage of this approach is that there is a known and maximum risk and it allows a trader to not miss a downside move by simply putting on a trade on a Monday morning and letting it work. Of course, one can always get out of the way if a bullish move occurs. The bottom-line is that there is a unique opportunity of using binaries and playing the EUR/USD to parity. Don’t miss out on it!

MT5.com – EUR/USD analysis for June 04,2020

EUR/USD analysis for June 04,2020

EUR/USD has been trading sideways in past 24 hours. The price tested the level of 1.1233. We are expecting more upside on the EUR/UD, key support is set at the price of 1.1215.

Yellow rectangle – Swing high acting like support 1.1215

Blue rectangle – Upward target 1.1320

White rising line – Support

Our advice is to watch for potential buying opportunities on the EUR but near the support at 1.1215. If you see potential test and reject from the support, you should watc for long positions. The MACD is still rising and it is in positive teritory, which is positive sign for EUR. Also, the upward trendline is still holding and that is another sign of EUR strength. Support levels are seen at 1.1215 and 1.1115. Resistance is set at 1.1320.

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