Currency in Focus: Big Market Swings That Could Lead to Giant Binary Wins
The biggest binary profits come from big moves in the markets. But how often do we see big market moves?
The answer is, more often than you think.
This lets us see which markets have a tendency to make the biggest moves. And that information can help guide us to winning binary plays.
Today let’s take a look at how often big weekly swings occur in some of our favorite markets, along with some general thoughts on how to use this information.
Between Aug. 6, 2010 and Aug. 26, 2011, the S&P 500 has seen a weekly move of 1% in either direction a total of 17 times. It moved 2% in either direction nine times. It moved 3% in either direction four times. And the biggest moves, jumping or losing 4-5% in a week, occurred just four times in total.
That means we can generally expect 1% moves to happen frequently, which favors at-the-money binary options. On the other hand, it also shows that bigger swings aren’t out of the questions, which can make deep-out-of-the-money binaries smart bets.
The weekly closes support the sentiment that gold can move big in either direction. From Aug. 6, 2010, to Aug. 26, 2011, gold had 11 weeks where it closed up more than 1%; 12 weeks where it closed up more than 2%; six weeks where it closed 7%; one week where it had a close of 4%; and two weeks it had a close of 5%.
So in general, you’d be better off buying deep-out-of-the-money binaries than selling near- or out-of-the-money gold binaries.
West Texas crude oil is one of the most interesting in this bunch. It really shows a capability for big moves. There were nine weeks where it closed 1% in either direction; nine weeks where it closed 2% or more; 10 weeks where it closed 3% or more; three weeks of 4% moves; and an extraordinary 11 weeks where it closed 5% or more
That is movement! And it proves that crude oil binaries can have some of the most surprising outcomes of all!
Perfect Conditions for Trading Binary Options
The implications behind this data are huge. It shows we have market conditions where we can “expect” big moves during the business week. The Monday through Friday life of binary options fit perfectly with these market conditions.
If you haven’t already, I urge you to try a Nadex demo account. It’s an easy and risk-free way to get a real-world feel for binary options.
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