Hidden divergence calls Gold long prior to the FOMC announcements this afternoon. Of course, to limit any potential downside, binary options were used to trade the position.
Hidden Divergence Calls Gold Long Prior to FOMC
As the TradeStation charts below show, on the 45 minute chart price makes a higher low yet the TradersHelpDesk Stochastic makes an equal low. The 12 minute price makes a higher low and the Stochastics makes a lower low. Both indicate that price will more than likely go up. A low risk weekly binary option (only $34.25 per contract) was entered.
Now with the 4 announcements with the FOMC, a move in Gold could be quite deadly if trading the futures but with binaries there was no way to lose more than the $34.25 per contract that was paid on entry.
After the Feds raised interest rates Gold surged and a nice profit was realized on the long position.
A profit target was set at $80 and it was achieved.