Tip from the Geek – Top 5 Binary Options Trading Tips 04/14-21/2014

What Ever You Do, Don’t Panic

These are important words for anyone and prominent in one of my favorite books, “The Hitch Hikers Guide To The Galaxy”. Those words, and always having a towel with you, are perhaps the most important things the guide has to offer. Not panicking at least helped me out this week. What happened you may ask? I had a catastrophic computer malfunction. Not catastrophic in the sense that I lost all my data but catastrophic enough that buying a new rig to type and trade on was a better option than spending a hundred bucks on a new battery that may have not solved the problem. The question before me now though is what to do about trading this week? Keep on trading, and not panicking. In hindsight it may have been a good thing that the computer failed because I was seriously considering a short term bearish stance on the markets.

 

The correction may be over, at least from looking at the chart of the S&P 500. That index for one is making a strong bounce from the long term trend line that could result in several hundred points of advance. What happened this week that didn’t happen last week? Not only did prices retreat to the trend line and a major area of support the markets also entered full earnings season and got some good data from around the world. So far, and I know that it is still early in the reporting season, 57% of companies have beaten estimates, 17% have been in line with estimates and only 26% are below estimates. Pretty good even with the low low expectations that are built into the market. Not only that economic earnings are gaining the tail wind of improving economic data in the form of higher than expected retail sales, CPI only a tenth above expectations, better than expected industrial production and from China; higher than expected GDP.

 

 

 

1. Rally On, Rally On

S&P 500

Call/Put = Call (s)

Entry = at market open

Expiration = Three Days

 

My Trading Advice

Writing tips this week is tough for more reasons than one. Of course I am two days past when I typically make my picks but this weeks I may have been a loser. I really was thinking about a short term put, the fall in equity prices last week was that impressive. However, this week the nature of the bounce, the ever changing economic picture and earnings have all reaffirmed my long term bullish stance. Also, because of the way the rally has unfolded this week and the indicators I am going to make a shorter term trade than a normally do.

 

This week the index made a sharp bounce from the long term trend line. The bounce is accompanied by some strongly bullish candles with a lot of near term momentum. I think the momentum will carry the index higher into the end of the week based on my analysis of the hourly charts. To capture this move I am going to trade a 3 day call with an entry targeted at tomorrows open. If the market opens lower I will buy on the open, if not then I will look for entry within the first half hour of trading. I will be trading a full size $200 position.

 

 

 

2. Gold Crumbles

Gold

Call/Put = Put

Entry = Above $1300

Expiration = One Week

 

My Trading Advice

I have said it before and I will say it again, there really isn’t a reason to get bullish on gold as an investment. It may have a short term rally but the long term trend is down and this weeks data isn’t helping. A stronger U.S. Economy, coupled with rising inflation, makes a stronger case for higher interest rates from the FOMC which is not good for gold prices. As the data unfolds, and the taper continues, and Janet Yellen keeps talking about raising rates gold prices will get hit just like they did this week. This week gold prices broke $1300, even though they are hovering above that line now I expect Monday trading to carry it lower. I am trading a put on Gold with a one week expiry (expires next Thursday).

 

 

 

3. Yen Moving Up From Bottom Of Range

USD/JPY

Call/Put = Call

Entry = Below 102.25

Expiry = 3 Days

 

My Trading Advice

The yen has been a tricky trade over the past month or so. First the flight to safety on Ukraine fears, then a rally on BOJ expectations and then a sell-off on BOJ disappointment. Now the pair is trading near the bottom of a trading range and indicated higher. There is not much on the horizon to impact the pair until the next BOJ and FOMC meetings which are both still a couple of weeks away. Until then economic data will drive the pair within the range. I am trading a call this week with a three day expiry to make sure it closes before Monday morning. 

 

 

 

4. Oil Topping On Ukraine

USO-Oil ETF

Call/Put = Put

Entry = Above $37.50

Expiry = 3 Day

 

My Trading Advice

Oil prices got another big boost this week from Putin and the Ukraine situation. However, there are signs that prices are at their top, at least in the near term. Sellers began to step while oil was above the $104 level resulting in a bearish candle for the USO. I am trading a put with a three day expiry to make sure it closes before the start of next week.

 

 

 

5. China GDP Good For EU

DAX

Call/Put = Call

Entry = Below 9300

Expiry = One Month

 

My Trading Advice

Better than expected GDP from China is good news for the EU and Germany, China’s largest trading partners. This news helped to drive EU indices higher today despite increased conflict in the Ukraine. While still a problem in the near term the EU, and Germany, are in position to grow so I am trading a call on the DAX with an entry below 9300 and one month until expiry. 

 

 

More Tips by the Geek – 04/14-21/2014 Trading Tips On Forum.

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That’s it for this week; Michael will be here next week with fresh trading tips. Meanwhile, we will be testing Michael’s tips to see what kind of an “expert” he really is. All trading assets and expiry times featured in Michael’s trading tips are based on CommuniTraders Binary Options Trading Platform.

 

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