Binary options trading system called Neighbor

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A trading strategy using the MA ALMA

The Moving Average is the main indicator in modern technical analysis. Combining several different types of movings allows you to get different results. Almost all indicators work on the same principle – averaging readings from the last few bars of the chart. In this article, we’ll look at a trading strategy based on the Arnaud Legoux Moving Average (ALMA). This indicator works on the principle of the Moving Average, but the calculation formula is more perfect. This allows you to reduce lag, provided that the signals remain accurate.

The tool was developed by Alan Hull, a trader from Australia who is well-known in professional circles. He positions his tool as an alternative to the standard MA types Simple, Exponential, etc. The main difference in regards to conventional moving averages is its minimal lag. The classic EMA, SMA, SMMA and other Moving Average lines have a significant minus – signal lag. This disadvantage becomes less noticeable if you reduce the period of the moving. However, a second problem then arises – the accuracy of the signals is significantly reduced. The MA ALMA in this regard is more perfect. On a volatile market, this tool shows very good trading results, even without the use of auxiliary filters.

Preliminary preparation of the platform

To trade on this strategy, we will need to open a live chart. The Arnaud Legoux Moving Average is not included in the standard set of indicators, so it is not available on the trading platforms by default. So, we choose an asset from among those which offer the maximum profit percentage on the trading platform. We set the interval to 1 minute. We could put it at 5, but this would reduce the number of trading signals by several times. We add the indicator to the chart. To do this, put “ALMA” into the search line, or manually find the tool called “Arnaud Legoux Moving Average”. Leave the settings for the period at the standard values.

Trading on an increase

In this article, we will consider the indicator in its pure form. Therefore, the trading rules are as simple as possible. If the price breaks through the Moving Average downwards and the rising (green) candlestick exists upwards, you should buy the “Up” option. However, it’s not as simple as just that, there are also some nuances which will be discussed below.

Trading on a decrease

The breakdown of the MA ALMA and exiting of the bars into the area below the movings signal the beginning of a downward trend in price movement. This is not a long-term trend but a short-term correction. More stable trends can be determined by assessing the position of the line on the graph and its direction. An example of a signal to buy an option on a decrease is shown in the picture of the live chart below.

The nuances of trading on the signals of the indicator

1. Trading should only be done on an active market when the indicator line is directed at a downward or upward angle. This indicates the presence of an upward or downward trend. In conditions of low volatility, the passability of signals is sharply reduced.
2. The MA must be broken through by a candlestick with a body that is relatively long. Bars that are too short should be ignored. If the shadow is longer than the body, that is also a negative signal.
3. The ideal moment to buy an option is during the period in the last 5-10 seconds before the closing of the bar. This time is indicated in the live chart.
4. The expiration period should equal 1 candlestick with the chosen timeframe.

A practical example of trading

We will conduct one trading operation specially for this article. We chose the AUD/CAD pair, but from a strategic point of view, that is not important. The preparatory stage has been completed, the indicator has been added to the live chart, and everything is ready on the platform for a quick opening of the trade with one click.

As can be seen in the picture above, an ascending candlestick breaks through the MA going downwards. Therefore, without waiting for the closure of the bar (15 seconds left), we open a trade on an increase.

Everything was prepared in advance, so we managed to open the trade. The trade lasted 60 seconds, but the screenshot was taken 22 seconds before the transaction was closed.

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A profit of 70% of the investment is credited to our account, as seen in the pop-up notice in the terminal.

Conclusion

Using the ALMA indicator alone allows you to get a good trading result. However, the efficiency would be even higher if additional filters were added (for example, the Relative Strength Index). The use of the RSI would make it possible to enter the market only in states of overbought/oversold, which further increases the percentage of passable signals.

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

The 5-minute Blossom trading pattern for binary options

The 5-minute Blossom pattern for trading binary options

For those who love short-term options, we offer a trading system called Blossom, which can bring very impressive amounts of profit. Thanks to a fine combination of effective technical indicators, the signals of the strategy are timely and accurate and ensures 87% of trading deals close with a profit. In addition, since the system is very simple to apply, newcomers can easily work with it.

The accurate tactics Blossom, 5 minutes of binary options: technical parameters

The technical side of this strategy includes three automatic indicators that determine the trend and foresee its upcoming turns: moving average (exponential type), Bollinger Bands and RSI. Such a combination may seem unusual, but this approach to trading guarantees an almost 100% accuracy of determining the time and direction of market turns, allowing to enter the trade with a serious advantage. As an indicator of trend and volatility, Bollinger Bands are the first to show market turns by forming the classic signal in the form of a rebound of quotations from the channel boundaries. Following the BB, MA indicator (type Exponential) also generates a trading signal that will show the direction of the next turn. The RSI indicator will add an unambiguous confirmation of a new short-term trend, on which it is possible to conclude a deal with a 5M expiration, to the complex trading signal.

So, since this system is an indicator-based system, the main condition for its use is a professional trading terminal with a built-in set of indicators that the strategy requires with corresponding settings. On such a platform, the system will show the intended efficiency. When preparing the article, we chose the trading terminal of the Binomo broker as a perfect example of such a platform. It features all the necessary functions and tools for the most effective use of the Blossom strategy.

How to build a template

From the indicators available on the terminal we choose the following names with the necessary configuration to set on the chart:

– Bollinger Bands, standard settings;
– MA, Exponential, type; the movings periods of 3 and 5 (the color of the senior moving is blue);
– RSI, standard period, the marks of extremes are 50/50.

The timeframe of the chart is M1. We recommend to choose a basic asset with high volatility, and trade only in day time. After all the necessary settings are set, we get the following picture:

Signals of the 5-minute strategy for binary options Blossom

So, you’ve created the technical template. Now you need to wait for the main trading signal to appear: the quotes touching the channel frame of the Bollinger. Then, when the moving average lines intercross, wait for the RSI indicator to confirm the signal and then immediately enter the market — open a deal in the direction, forecasted by the three indicators.
Open an UP deal (CALL option) when:

– The quotes touch the bottom frame of the Bollinger channel and make a turn for growth;
– EMA lines intercross with an upward slope;
– Moving RSI move above the trend level 50.

Open a DOWN deal (PUT option) when:

– The quotes touch the upper frame of the Bollinger channel and make a turn for decline;
– EMA lines intercross with a downward slope;
– Moving RSI move below the trend level 50.

Expiration and Money Management

This strategy was designed for a 1-minute interval of the chart, so we do not recommend using it on timeframes of several seconds. Taking into account the actual continuity of the trading signal, the optimal expiration of deals is from 5 to 10 minutes, depending on the current level of market volatility.
To reduce the risks, it is best to follow the classical rules of risk management, limiting the amount of the option to 5% of the volume of the deposit. Trading only 1-dollar options, available at the Binomo broker’s platform, will allow to reduce the amount of risk when working with modest trading funds.

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Binary Options On NASDAQ Stocks: FB, GOOG, AMZN; Are They Good Investments?

So you’ve heard about binary options. Your dad or your neighbor told you a story about a guy their friend at work knows who made a whole bunch of money trading binary options on FB stock with a broker registered in Cyprus. Now you’ve just got to get in on the action.

Over the past few weeks you’ve seen stocks like those of Amazon.com Inc. (NASDAQ: AMZN) and Facebook, Inc. (NASDAQ: FB) rip higher and lower on earnings news and just know there must be a way to make money, you know, without actually buying the stocks.

The good news is: there totally is a way to make big money off of the moves like FB and other NASDAQ shares have made over the past weeks. The bad news is: it entails risk and it isn’t with binary options.

Binary FB Options and CBOE FB Options: A World Of Difference

Up until about 2005, no one had heard of binary options. There were options on NASDAQ stocks traded on the Chicago Board Options Exchange (CBOE) and other options exchanges, but that was about it. When FB shares were first listed in 2020, corresponding FB option contracts began trading on the CBOE.

These exchange-traded FB options are contracts between two parties, known as counter-parties, defined as follows: options give the holder the right to buy or sell a set quantity of some asset at a predetermined price (the strike price) for a predetermined length of time. FB option contracts that give the right to buy are called call options. Those that give the right to sell are known as puts.

As a result, standardized option contracts for future months for many of the more liquid shares issues, such as FB, TWTR and AMZN, trade on the CBOE.

Recent FB Volatility Presents Trading Opportunities

With today’s volatility in FB shares, there was a great deal of activity in the corresponding FB option market. Let’s take a look at some FB calls and puts on the CBOE and look at what kind of money could have been made, and lost, and then compare with binary options.

We’ll look at the FB July 31, $99.50 put option. This gives the holder the right to sell 100 FB shares at $99.50 until expiration tomorrow afternoon.

Yesterday this contract closed at $5.50. Today it traded as high as $6.55: a gain of 19 percent. A quoted option price of $5.50 equates to $550 because there are 100 shares in most contracts. Plus, the current bid is $4.35, meaning that holders could liquidate their positions with a 21 percent loss. Most binary FB options do not allow this luxury.

If FB shares had really plummeted last night, like Twitter, Inc. (NYSE: TWTR) or Yelp Inc. (NYSE: YELP), shares earlier this week, the FB put contract could have increased by significantly more.

What about traders who bought call options, or the right to buy, and got the trade wrong? The corresponding FB $99.50 call option that expires tomorrow is trading down $2.82 with a bid of $0.03: pretty much a 100 percent loss.

Losses like this are common with all options: investors who can’t afford to take 100 percent losses from time to time should not trade them. A very limited portion of any portfolio should be allocated to options.

FB options traded on the CBOE allow traders to buy or sell their contracts at any time the market is open in an open and transparent market. Further, in some cases, holders of call options on stocks like FB, AMZN, or those of Google, Inc. (NASDAQ: GOOG, GOOGL) have earned many thousands of times their initial investment.

FB and other options are zero-sum games. For every winner, there is an equal loser: options are for knowledgeable investors only.

Binary FB Options: Roulette May Give Better Odds

Binary FB options aren’t traded on regulated and transparent exchanges like the CBOE. They are private contracts between individuals and foreign corporations. That is worth repeating, they are contracts made with foreign corporations: good luck receiving support from the judicial system, law enforcement, the SEC, FINRA or anyone else if you get ripped-off.

A binary FB option doesn’t give the holder the right to buy or sell anything. Binary FB calls are bets that FB stock will go up over the next 20 minutes and binary FB puts are bets that the stock will go down.

Most binary options “brokers” (counter-party would be a more apt description) pay 85 percent when customers are right. Customers lose 100 percent when wrong.

For the most part, a customer who bought a FB binary option can’t get out of a trade, even with a loss, before the agreed upon expiration. FB stock has to be lower or higher at the precise moment of expiration. Some binary option brokers who offer FB allow customers to opt for a buyout, giving them the right to exit trades early. The most common scheme sees profits reduced by corresponding buyout amounts. This means that if a customer chooses to have a buyout of 20 percent available, they would only earn 65 percent when correct.

Betting on red in European roulette gives a 1:1 payout and has a 48.6 percent chance of winning. Betting on FB stock to rise in the next 20 minutes with the average binary option broker has a 1:0.85 payout and has a 50.0 percent chance of winning: you be the judge. Is it worth giving up 15 percent of payout for a random event that only occurs 1.4 percent more often?

Lastly, those multi-thousand percent returns that are at least possible, if not uncommon, with exchange-traded options? There is absolutely no way to earn similar returns in the binary option game. With profits limited to 85 percent or thereabouts, binary brokers are pocketing the sweetest part of the option deal for the contract-holder.

Commissions On FB Options: CBOE Versus Binary

To buy and sell FB options on the CBOE, investors will need an account with a member firm and to pay commissions on trades. In 2020, $5 for an online option trade would probably be seen as expensive. Exchange-traded option commissions are very affordable.

Binary FB option brokers don’t charge commissions on each trade. Where they get customers is if they attempt to withdrawal profits, which despite terrible odds, may occur from time to time. Binary option brokers charge commissions when customers withdrawal profits. The amount charged varies greatly by broker and the individual situation.

In short, you’re going to be charged an unknown, sliding amount, arbitrarily imposed by a foreign corporation if you ever manage to profit against the terrible odds given.

In closing, to answer, “Are binary options on NASDAQ stocks like FB good investments?” The answer is that roulette probably offers investors better and more stable returns.

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