Making a Living with 15M Expirations Options


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Video Transcription:

Hello, traders. Welcome to the Pro Trading Course and the ninth module, Professional Binary Options Trading. In this lesson we are going to learn how to make a living with 15-minute expiration options. Now, binary option is very different from FX and CFD trading. We are trading the same instruments, but you need to understand that we don’t have targets. What we have is expirations on our position. So what we need are big moves and big momentum for us to be able to make the money at least 70% of the time, okay?

Now, we are going to go to the charts, and I’m going to show you how you’re going to be able to beat the markets with 15-minute expiration options. Now, the first thing you need to understand when you’re trading 15-minute expiration options, you are going to be trading the lower time frames. In this case, you are going to be trading the five-minute time frame. We are here looking at the US dollar/Canadian dollar five-minute chart, okay? Now, I know it looks kind of complicated what we’re going to do here, but I’m going to show you two setups that you need to understand in order for you to be able to make money with this.

Making a Living with 15M Expirations Options

Now, first of all, I’m going to tell you a couple of things. To be able to make money trading binary options, you have to be even more disciplined than when you’re trading forex or CFDs or futures or stocks for that matter. And the reason is that you need the perfect entry. If you don’t get the perfect entry, it’s very possible that price is going to go against you and you are going to be…or the option is going to expire out of the money before it moves in your favor. So we need a perfect entry. We are going to use the five-minute chart, fractals, the pivot points, and the RSI. And the reason we are going to use this is also because I want to show you how you can migrate a very good forex and CFD strategy into binary options trading.

So, let’s go to a GBP/USD, and I already have a few setups that I want to share with you. And these are the setups that we are going to be looking at. We are going to look for breakouts and we are going to look for reversals, and that’s it. We are not going to be trading anything else in order to be profitable. Remember that trading is not about your ego, but trading is about only trading the best setups out there. Now, let me just erase these two vertical lines, and I’m going to show you what we’re going to do.

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First of all, you need to look at the market direction. You can use the fractals or you can use your pivot point. In this case we have…well, we started the session on the bear side of the pivot point, but then an up fractal got broken and we break with the daily pivot so now we are looking for another breakout to the upside, all right? What is going to happen is that we are going to use the same setup that we used on the FX and see if the strategy that we just developed for trading binary options.

When fractals are printing right at the pivot levels, you are going to wait for that breakout. So you need to have your charts in one screen, and of course, you need to have your brokerage page on the other. But if you have the investu.com plugin you can trade right from the charts. In any case, I am going to show you what you are going to be looking for. First of all, we need our fractals to start printing right here at the pivot level, just as in this case. Then we are going to look at the RSI, and the RSI is in bullish territory.

We are not going to look at overbought or oversold but at the sentiment of the RSI. Bullish territory is above the 50 level and bearish territory is below the 50 level. Right here we are in bullish territory. Then we are going to wait for the breakout, the breakout of the fractal and the level. And when that happens we are going to buy, in this case, a call option with a 15-minute expiration, and one, two, three candles later, this option expires in the morning. It’s as simple as that. Every time you see a move to the upside of fractals printing on a pivot point, you are going to wait for the break to the upside. If you are looking at down fractals for a break to the downside, the RSI needs to be in bearish territory.

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Now, that is one of the setups that you are going to be using. The other one are reversals, because momentum doesn’t always come from breakouts but it also comes when price consolidates at a pivot level and then reverses. Now, what we are going to look for is this. Let me just get rid of these two rectangles because I’m going to use them to show you what we’re going to look for. First of all, we need direction.

In this case, we are moving up. So what we are going to do here is we are going to wait for a test of a pivot point and then a break of the down fractal. But not only we need a break of the down fractal, we need a solid move. This means that you have to have at least three fractals printing higher. If this doesn’t happen, you don’t have a setup. And if you start trading setups where fractals are not printing higher, well, you’re going to start to lose money because you need to be very disciplined in this case.

Because fractals are printing…well, because down fractals are printing higher in an up move, and up fractals are printing lower in a down move, you are going to find yourself with an RSI on the other side of the market. This means that, for example, in this up move where we have found three fractals printing higher, you can see that the RSI is on the bull side of the market.

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But what we need is this. We need a break from the fractal, from the last fractal, in this case right here, you can see that this candle breaks with the fractal, so right here we have a possible setup, but we need the RSI to move lower, to move to the bear side of the market, all right? If the other side moves from bull to bear, this reversal and this break of the last fractal is admissible for a trade. And we take the trade right here, and as you can see, one, two, three candles later, this option expires in the morning.

So, to recapitulate, breakouts happen when the last fractal prints at the pivot level and price breaks with the pivot level and the last fractal. And reversals happen when we have three fractals printing on the direction of the trend, but then the last fractal breaks after a test of a pivot level and the RSI moving to the opposite side of the market.

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