Trading 20 minute binaries with divergence on the Nasdaq futures allows traders to limit their risk in these volatile markets.
Trading 20 Minute Binaries with Divergence
The NinjaTrader 8 three minute chart shows both stochastics and volume divergence on the last high. Additionally, an ADX magenta peak forms (which typically will send price back down to the ATR to test for support).
Timing this technical analysis pattern with the 20 minute binaries requires patience. In this case, the 20 minute binaries had just opened the new strikes. An entry for trading 20 minute binary options with divergence was valid because the binary option had sufficient time to work and the risk was low $26 per contract.
Immediately a profit target was set for $25. This is done because the 20 minute binary premiums can move very quickly. Having the target in place can be the key to getting filled quicker versus trying to click and close the position.
In this trade example, trading 20 minute binaries with divergence to limit risk, provided a profit of $49 per contract. Plus the binary options are cheaper to trade — the exchange fee for trading the binaries is only $2 roundtrip.
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