In this video, Gail Mercer, shows how to use volume divergence for entering OTM binaries with less risk than the ATM strikes. Additionally, the stochastics was also showing overbought markets and all positions were to the short side based off four binary signals this morning.
Using Volume Divergence for Entering OTM Binaries
If price is reaching up, as was the case this morning, and buyers decrease instead of increase, then there is volume divergence (or if moving down and sellers decrease). In these examples, price was moving up to the ATR (which in most cases were above price) and, instead of increasing, the buyering volume decreased with the stochastics indicating an overbought market, as well. All four short positions were entered using an OTM binary option with less than $40 of risk per contract.
About 45 minutes prior to expiration, three of the trades were exited with profits and the USDJPY OTM binary had lost the risk paid on entry ($32).
When you have volume divergence with other indications that the market will move down (overbought status in this case), then the probabilities are on your side and the lower risks OTM binaries allow you to capture more in profit (increase your risk to reward ratios).