The power of congestion areas and 20 minute binaries was evident this morning on the indices. The 180 and 45 charts showed congestion areas. The 12 minute chart showed that price tested the Pivot line but could not break it. Instead, price was going to play within the congestion area.
Power of Congestion Areas and 20 Minute Binaries
The TradeStation charts shows the entries (red arrows for shorts and blue arrows for longs).
The three 20-minute binaries produced over $2,000 in profits and a risk to reward ratio of 1 to 2.5 meaning for every dollar of risk the reward was $2.50.
Between the Pivot Line resisting price and the congestion area developing, traders just needed to wait for price to approach one of these areas with timing the 20-minute binary option for entry. Then the trader simply makes sure he is not risking more than $30 per contract so the profit potential is at least double the risk. If any weakness is revealed then the trade is exited early to prevent losing profits (as the Dow Jones early exit).
Although the market did not move very much the first hour, using the 20-minute binaries allowed the trader to take advantage of the power of congestion areas and still make profits. Of course, the TradersHelpDesk indicator easily identifies the congestion areas because both a white dot and the plus sign highlights the congestion area. Then the trader can only enter a trade if price is at one of these areas. Very simple and specific entry rules. Then incorporating a low risk methodology ensures that profits outweigh any potential losses because the trader doubles his risk on the trade using OTM binaries.
The 20-minute indices binaries are really great for trading the power of congestion areas provided the trader can implement these easy rules and risk parameters.