Pocket Options Trading Price Action Strategy – 44USD in 3 Minutes

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The Best Options Trading Strategy

The best options trading strategies are used primarily for speculative and hedging purposes. A virtually unlimited number of strategies can be created by incorporating various option positions resulting in a strategy designed to accomplish a specific goal. The goal may be to protect currently held assets or to speculate on the anticipated price movement of an underlying financial instrument. The investor can select from the most commonly used strategies or create a custom strategy. The best trading strategy is the one that will accomplish the financial goal of the investor.

Hedging

Hedging can be a form of insurance on an asset or portfolio. The investor who owns shares of a company may want to protect the investment against an adverse price change. Buying a put is a strategy that offers the trader the right to sell the stock at a specified strike price on or before the expiration date of the option contract. The strike price is the exercise price of the contract and is selected by the trader. Index options cover a broad range of stocks and can be used to hedge a portfolio of stocks. The investor owning shares in energy related stocks may want to protect the investment by purchasing a put on an energy index. If the value of the portfolio declines, the value of the put option will typically increase, creating a hedge.

Speculation

The investor anticipating an increase in the value of a stock can buy a call option to capitalize on the move. A long call offers the investor the right to buy an asset at the strike price on or before expiration of the option contract. A call will typically increase in value as the underlying stock increases in value. Buying a call is much less expensive than buying the stock, and the risk is limited to the premium paid for the call. Speculating on a decline in the value of an asset can be accomplished by buying a put option. Once again, the risk is limited to the premium paid and the trade is far less expensive than short selling the stock. The investor expecting a general market movement can speculate using index options.

Combinations

Complex option strategies are used for a variety of trading opportunities. Options can be bought and sold with different strike prices and expiration dates, creating limited risk strategies. These methods enable the investor to capitalize on market conditions that could not be traded using simple long and short stock positions.

Market Strategies

Some option strategies are used to trade specific market conditions such as a trending, choppy or consolidating market. Trading a volatile or erratic market is typically accomplished using complex option strategies. Market-neutral positions can be established that lower the exposure to unexpected volatility. Option trading strategies are available for nearly every type of market condition.

Price Action Trading Method – Options Strategy

I learnt about this Price Action Trading Strategy from Trade Academy . It took some time to grasp it properly but it works like a charm. My probability of profit with this strategy is 78%. I’ve optimized it further combining other technical strategies into it.

Swing Trading

Swing means fluctuations. Swing traders use technical analysis to look for stocks with short-term price momentum. Short-term generally refers to a holding period of 1 day to several weeks.

Swing High and Swing Low

The strategies on Trade Academy was based on the concept of Swing High and Swing Low. I over complicated the basic concept and it took me couple of days to figure it out.

A Swing High is a candlestick with at least two lower highs on both the left and right of itself.

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A Swing Low is a candlestick with at least two higher lows on both the left and right of itself .

This image solves it all.

There is an indicator in metatrader (an awesome trading platform) which identifies the swings automatically – it’s called fractal . But I wanted an price action indicator on meta trader which works exactly like the above image. I managed to get an indicator which you can download here which works perfect as far as I have tested for H4 chart.

The Price Action Trading Strategy

The main practical suggestion that comes of this course is the chapter named – The 15 min Option Trader . The main tagline is -” Spend 15 mins a day and trade options.”

The Strategy is simple – When a candlestick crosses the last swing high 15 mins before the market closes buy call options; if a candlestick crosses the last swing low 15 mins before the market closes then buy put options. Risk:Reward ratio is 1:1. Hence target profit and stop loss is both at 30%.

Here is my modification to it. Instead of buying call options sell the put options and instead of buying put options sell the call options. Replacing the call options with put options gives us advantage over time decay.

I personally use higher reward and lower risk manually. Also you can go for long options too. In the daily chart, follow the same and buy At-the-money call options for bullish nature and vice versa.

Results

Here are the back testing result of Price Action Trading Strategy mentioned there on July-September trades of Reliance –

Reliance June Trades:

  • 1st June – Bought 900 CE @ ₹ 22.85 – Stop loss – ₹ 16.00 – Target – ₹ 29.70
    Target hit on 2nd June with Profit +30%
  • 11th June – Bought 880 PE @ ₹ 28 – Stop loss – ₹ 19.6 – Target – 36.4
    Stops hit on 12th June with Loss -30%
  • 17th June – B ought 920 CE @ ₹ 39 – Stop loss – ₹ 27.3 – Target – 50.7
    Target hit on 18th June with Profit +30%

Reliance July Trades:

  • 15th July – Bought 1000 CE @ ₹ 27.85 – Stop loss – ₹ 19.5 – Target – 36.2
    Target hit on 21st July with Profit +30%
  • 22nd July – Bought 1040 CE @ ₹ 28.30 – Stop Loss – ₹ 19.8 – Target – 36.8
    Target hit on 22nd July with Profit +30%

Reliance August Trades:

  • 4th August – Bought 1000 PE @ ₹ 26.35 – Stop Loss – ₹ 18.45 – Target – 34.25
    Target hit on 10th August with Profit +30%
  • 20th August – Bought 920 PE @ ₹ 13.65 – Stop Loss – ₹ 9.55 – Target – ₹ 17.75
    Target Hit on 21st August with Profit +30%

Reliance September Trades:

4th Sept – Bought 840 PE @ 28.05 – Stop Loss – ₹ 19.64 – Target – ₹ 36.45
Stops hit on 8th Sept with Loss -30%

Though if you do not understand what is option, swing high or swing low; I strongly recommend you must sign up there and learn the whole course. It will take you couples of night to gallop all the videos up there.

Here is what I have made recently with NIFTY OCT 8700 CE.
I made one Zerodha account just to make money using this Price Action Trading strategy. It ran pretty well. But I’ve made my own modifications to the take profit and stop loss. You can make it to a trailing profit if you’re greedy like me.

The Best Options Trading Strategy

The best options trading strategies are used primarily for speculative and hedging purposes. A virtually unlimited number of strategies can be created by incorporating various option positions resulting in a strategy designed to accomplish a specific goal. The goal may be to protect currently held assets or to speculate on the anticipated price movement of an underlying financial instrument. The investor can select from the most commonly used strategies or create a custom strategy. The best trading strategy is the one that will accomplish the financial goal of the investor.

Hedging

Hedging can be a form of insurance on an asset or portfolio. The investor who owns shares of a company may want to protect the investment against an adverse price change. Buying a put is a strategy that offers the trader the right to sell the stock at a specified strike price on or before the expiration date of the option contract. The strike price is the exercise price of the contract and is selected by the trader. Index options cover a broad range of stocks and can be used to hedge a portfolio of stocks. The investor owning shares in energy related stocks may want to protect the investment by purchasing a put on an energy index. If the value of the portfolio declines, the value of the put option will typically increase, creating a hedge.

Speculation

The investor anticipating an increase in the value of a stock can buy a call option to capitalize on the move. A long call offers the investor the right to buy an asset at the strike price on or before expiration of the option contract. A call will typically increase in value as the underlying stock increases in value. Buying a call is much less expensive than buying the stock, and the risk is limited to the premium paid for the call. Speculating on a decline in the value of an asset can be accomplished by buying a put option. Once again, the risk is limited to the premium paid and the trade is far less expensive than short selling the stock. The investor expecting a general market movement can speculate using index options.

Combinations

Complex option strategies are used for a variety of trading opportunities. Options can be bought and sold with different strike prices and expiration dates, creating limited risk strategies. These methods enable the investor to capitalize on market conditions that could not be traded using simple long and short stock positions.

Market Strategies

Some option strategies are used to trade specific market conditions such as a trending, choppy or consolidating market. Trading a volatile or erratic market is typically accomplished using complex option strategies. Market-neutral positions can be established that lower the exposure to unexpected volatility. Option trading strategies are available for nearly every type of market condition.

Os melhores corretores de opcoes binarias 2020:
  • FinMax
    FinMax

    O melhor corretor!
    Conta demo gratuita e treinamento para iniciantes!
    Inscreva-se bonus!

  • Binomo
    Binomo

    Corretor de opcoes binarias confiavel! Boa resposta!

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