Concrete Entry/Exit Strategies

On the short term time frames like the five minutes chart, the shortest expiration dates are preferred, and the binary options to trade can be:

  • sixty seconds options: a lot of brokers offer this option and it is appropriate to trade it based on the lower time frames, not higher than the five minutes chart;
  • options with extremely short expiration date: two minutes, five minutes, up to hourly expiration dates. Anything above should be treated on other time frames;
  • one touch options: identifying a range on the five minutes chart can be used in trading one touch options as ranges are being defined by price constantly crossing a specific level.

Based on the Ichimoku elements, the following strategies can be applied:

  • wait for the Ichimoku elements to indicate trending market conditions (cloud green, Chinkou above price and cloud, Tenkan above Kinjun and Kinjun above the cloud for bullish market; cloud red, Chinkou below price and cloud, Tenkan below Kinjun and Kinjun below the cloud for bearish markets). Once a bullish or bearish market is identified, look for the moment the Chinkou is approaching the candles in front of it and engage in buying calls if the market is trending to the upside or buying puts if the market is trending to the downside with the expiration date to be given by the distance Chinkou has to travel until actually meeting the candles in front of it. In a strong trending environment, this translates with Chinkou trying to avoid the candles in front of it and therefore a greater chance for the option to expire in the money;
  • look for Chinkou to be rejected when testing the top of the cloud in a transitory cycle after a bullish market or the base of the cloud in a transitory cycle after a bearish market. Sixty seconds options and short expiration date options are favored.