Using a binary option signals example generated on the AUDUSD, in this article, I am going to show new traders how to trade a signal example using a signal that was generated on the AUDUSD.
Binary Option Signals Example AUDUSD
First, let’s examine the actual twitter signal:
The binary option signals provides the following information:
- Instrument or Symbol – The forex pairs correspond directly to the forex pairs. The futures symbols are used for all indices and commodity signals (GC = Gold, CL = Crude, YM = Wall St 30, ES = US 500, NQ = US Tech 100).
- Identifies it is a 2 hour binary option
- Identifies the price where the trader should begin looking for an entry. The trader can choose to trade with ITM, ATM or OTM strikes.
- Minimum time expiration is provided. The trader can also choose to trade multiple strikes, ie 2 hour, daily, etc.
- Date and time signal is issued.
Using the binary option signals above (which was tweeted at 3:15 am New York time), the chart below shows how the trade plays out:
- Red arrows identify the bar where the signal was issued and the price given (choosing the nearest strike to this price for the ATM binary option)
- Gray arrow identifies the bar that provides an entry for less than $55 in risk (bar begins building at 3:20 am New York time) with the Stochastics in an overbought state
- The 3:20 bar is a reversal bar to the downside further confirming the move.
- Trader could also have chosen either of the strikes at the red circle as both formed reversal bars and the Stochastic was confirming price action (lower highs in both price and Stochastics)
This one binary option signal could have been generated 1 trade, 2 trades, 3 trades or even 4 trades — simply depending on how the trader wanted to trade it.
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