This morning trading the DAX using the Nadex Binary Options. One was Deep in the Money (DIM) and the other was At The Money (ATM). The chart below has two green arrows showing where my entry was. The first trade resulted in a profit of $24 per contract at expiration. The second one I exited before the expiration with $45 per contract.
Trading the DAX Using Binary Options
The DIM binary options are based on probabilities. I correlate these to someone that is just dropping $20 bills on the sidewalk and I just stop and pick them up. In other words, the probabilities in the options are on your side plus the directional volume indicator and Trend ATR are agreeing that price will continue up. I bought the strike price of 10011 and the underlying was at 10021. In other words, the underlying would need to move down more than 11 points for me to lose.
The ATM trade was going in the direction of the higher timeframes, in this case upwards. I purchased the strike price closest to price (10020) because the directional volume showed sellers were not interested, plus it was at the Trend ATR on the 3 minute and the 12 minute also confirmed a lack of sellers. In this case, the binary options did not show a probability advantage but the THD indicators did (remember volume is leading and we can fully exploit this with the binaries).
My combined profit per contract was $69 and trading ten contracts that is $690 before the opening bell.