Two Ways to Increase the Probability on Early Morning Trades

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When trading futures, stocks, ETFs or watching indexes—directly or via a binary option—the early morning trades often present the best opportunity.

When the market opens orders flood in, creating volatility and profit potential. On the contrary, myself gap in binary options strategies forum almost every other professional trader I know makes nearly all their money near the open and close. Patterns are pronounced at the beginning of the day, because the moves are sharp, swift and often of large magnitude.

Before you can increase your probability of find a good entry, you need a strategy. Here is a very simple one. Given that we are trading the open, this is a day trade, and using a 1or 2 minute chart is recommended. Since the market rallied higher off the open in Figure 1, the price area around the previous gap in binary options strategies forum is gap in binary options strategies forum the support zone. If the market had fallen away from the previous close, then the price area around the previous close would be a resistance zone.

Figure gap in binary options strategies forum shows the support zone created by the previous close. That is where the probability enhancers come in. Look back to Figure 2. This shows that at least temporarily the support zone is holding and the price is likely to rise. Figure 3 shows a zoomed in version of the prior charts. It shows the entry occurs as the price moves back out of the zone, as the zone looks like it will cause a reversal. If the price falls right through the zone, no trade is taken.

In Figure 3 the price enters the support zone and within a couple bars it is already moving back out. While this support zone is relatively small—only gap in binary options strategies forum 1 point—some days the zone will be much bigger due to volatility near the close on the previous day remember, the zone is created based on the last few bars at the previous close.

We want the price to bounce off the support or decline off the resistance zone within several minutes of getting close to it. The sharper the reversal near the zone the better. Take Figure 3 for example. While these enhancers have been applied to a simple trading strategy for the purposes of this article, the enhancers are useful in many other strategies as well. As for enhancer one, I almost always wait for the price to begin moving in the direction I want before making a trade.

The Set-Up Before you can increase your probability of find a good entry, you need a strategy. Enhancer 2 — The Reversal Should Occur Quickly In Figure 3 the price enters the support zone and within a couple bars it is already moving back out. These Enhancers Can Be Used For Other Strategies While these enhancers have been applied to a simple trading strategy for the purposes of this article, the enhancers are useful in many other strategies as well.

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We offer to our readers another strategy to use while trading financial markets. Trading the Gap binary options strategy as well as many others, which we have already published here appertain to the advanced trading strategies.

To perform successful Trading the Gap strategy you have to follow close economic calendar and price movements on important economic events. It does not use any indicators and the trading signal occurs exclusively in the situation on the chart. Below we are going to look in details at the description, as well as the opportunities to open trades. In the first place, in order to understand the essence of how this strategy works, it is necessary to make decision on such a concept as the gap.

It is the price gap on the chart that may sometimes appear. Most often it is visible either after holidays, or at the time of important events release.

This price gap in most cases is clearly visible, but we should remember that it can only be observed on the candlestick or bar charts. For example, there is some kind of unexpected news or rumor, and the market reacts to it on Monday by the advent of the price gap. The main secret of this strategy is that the market always strives to close the gap.

Let's turn to the chart. The gap is quite visible but we have specifically noted it for further clarity. As can be seen, the price has grown up after the gap appearance, but it quickly returned and completely blocked the gap. This is a result of the fact that the price is always striving to handle this situation.

Trading the Gap binary option strategy has a small flaw. Closing the gap can occur immediately after it appears in just a few days. This binary options strategy helps to get trading signals directly from the price chart. You do not need to delve into the details of technical analysis or study any indication. They are just not there.

On a completely pure chart, you just need to notice the price gap. It is necessary to wait until the price gap unfolds and then open a trade in the opposite direction from the direction of the gap. On our chart the gap is upward. What should we do in this situation? As can be seen a few candles reversal appears. Its signal is greatly enhanced due to the fact that the price of a financial instrument will close the price gap.

In this situation, when a reversal of candlestick pattern occurs, you can buy a Put option. Trader should wait for the appearance of a candle on the chart, which would indicate that the market is ready to reverse up and buy a Call option. As the charts show, we do not use any indicators in order to get trading signals. It's really a very simple strategy and it does not require any deep knowledge of technical analysis.

Everything is very clear and visible on the chart. On the other side you need to be very experienced in fundamental analysis to easy locate price gaps on important economic events. Skip to main content. Trading the gap binary option strategy You are here Home. The market strives to close the gap. What is a price gap? Why does the gap appear on the chart? How to locate a price gap? How to open a position when the gap appears on the chart? The same applies to situations where the price gap comes down.