Category Archives: Binary Options Strategies

Investoo Signals

Investoo Signals Good For NADEX Traders

Investoo.com is a website with a vast library of educational trading videos, indicators and signal systems good for a variety of trading styles. The service is based in England and registered with the FCS, number 82888880. A simple registration will get you access to the introductory level training videos while a one time uprage of $100 will get you the full package. Included are over 300 hours of videos, organized into several courses targeting forex, binary options and CFD’s as well as technical aspects such as candle sticks and strategy. Also included are 3 indicators for MT4 based on PSAR, MACD and Stochastic and all capable of generating signal alerts.

NADEX Binary Options Signals

The goal of the website is to teach beginners how to trade, but they go far beyond that. Traders of any level can learn something from the videos and the indicator signals are a valuable trading tool. They produce easy to follow entry and exit signals that go hand in hand with the video lessons.

The Investoo.com indicators are suitable for trading NADEX binary options. They are MT4 indicator plug-ins based on three standard indicators; Parabolic Stop and Reverse, MACD and what they call the binary options indicator but is really stochastic. The indicators track prices and generate signals as they meet preset criteria, when used along with strategy and confirming/coincident indicators they perform pretty well. The caveat, and the website does not sugar coat it, is that false signals do occur, they offer no guarantees of wild success.
Investoo Video Courses
This is where the videos come in handy, they teach different methods of picking the good signals and weeding out false signals to help ensure win rates better than break even. At least a basic understanding of trend along with the use of support and resistance levels is what I suggest.

In order to use them with NADEX you will have to also need to use MT4, if you don’t have it it is an easy download as well. Once you download the indicators adjust to the time frame you like, the indicator will appear at the bottom and signals will generate in real time. In order to use them to their fullest potential strategy is a must, simply following them blindly will not produce good results. Expiry should be chosen based on the time frame of chart you are using. I suggest at minimum 30 minute candle sticks, I prefer one hour and one day for my trading.


Vist Investo.Com Now For Binary Options Signals

NADEX Binary Options Strategies

Why NADEX Is Best For US Traders

boomtown_loadmaster_CCASA30_wiki

Anatomy Of A Secular Bull Market

I have some pretty strong ideas about the current market environment. In fact, I think we are in the early stages of a secular bull market and can expect to see the markets continue to rise over the next 15-20 years. Seriously. This does not mean they are going straight up, far from it. But what I mean is that over the long term, with periodic corrections, consolidations and pullback, the markets are only going to go higher. I have demographic and technical analysis to back up my views but more of that in just a bit.

First, what is a secular bull market? This is a long and protracted period of economic growth that results in higher values for property, equities and other investments. This is because there are more buyers in the market than sellers. The reverse is true for a secular bear market.

  • Secular Trend – A secular trend is one that last for a long period of time, usually 5-25 years. The secular trend is the primary market trend and the strongest in terms of trend analysis.

Demographics Of The Secular Trend

It all comes down to demographics, people, to understand the secular trend. This story starts with the Baby Boomers, the largest segment of U.S. population. This generation was taught by their parents to save money, they understood the value of a dollar because it was made of silver and the environment for business was great in the post-war economy. Over time the Boomers built up portfolios of stocks, commodities and real estate as they were taught and advised by their money managers. The economy boomed during this time and America grew.

The next generation, my generation, was much smaller. For some reason the Baby Boom of the 50’s and 60’s was followed by a baby bust in the 70’s and early 80’s. As a generation we grew up with conflicting values. On the one hand we were told to save and invest by our parents, told to buy and consume by the t.v. and media and to “dam the man” by popular culture. Needless to say it was a fun time but not a time in which we, as a generation, were preparing for the future.

2010populationbyageYou may by now see where I am heading. The preceding generation was large, were savers and held a lot of what are termed “more risky” assets such as stocks and real estate. The following generation  was smaller and characterized by non-saving consumerism. When the Baby Boomers reached retirement age beginning in the early part of 2000’s they began to sell off their investments in preparation for retirement. The bad thing for them is that there are more of them than there are of us (70-80’s kids, Generation X-r’s) making a market environment where there are more sellers than buyers, a secular bear market. This is why the markets ultimately trended sideways from the 2000 until 2013. There are other things to keep in mind but demographics have the most to do with it. For example the Tech Bubble of the nineties and the market crash of 2008.

The Bull Is Back

I think it is easy to see how demographics affects the secular trend.  So, what does this mean now?  Well, after Gen X comes Gen Y and then the Millenials.  These two groups are larger than Gen X and make up a significantly large portion of the population. I understand that they are having a hard time with jobs at this time but we are making progress. Economic trends are up and so long as this is true the youngest and largest part of our population will continue to strengthen and invest in their and our futures. Remember, as the Millenials come on line in terms of jobs, business, investment and etc they are becoming the net force in the markets.

 The Technical Secular Picture

Looking at a chart of the Dow Jones Industrials or S&P 500 there is a technical argument for the secular bull market as well. The tech driven bull market that ended in the 1999-2000 Tech Bubble was the official end of the previous secular bull market and the beginning of the secular bear market which reigned from that time period until 2013. It is easy to see how the highs set in 2000 are the top of the range and held the U.S. markets in a sideways trend for roughly 14 years.

spx_secular_trend_analysis

During those 14 years there are some key time periods that coincide with the demographic analysis. First, in 2000 the Baby Boomers had begun to turn 60. Not all planned to retire at that time but enough did, and enough were planning to retire soon, to shift the tides in the favor of sellers and begin the secular bear market. Then, when the market was hitting bottom in 2003 the Gen X’er’s were turning 30 and taking charge of their lives. That, and a hot housing market, helped the markets to recover until 2008. At that time Boomers who had been forced to put off retirement stepped back in as sellers, popping the housing bubble and starting the global financial crisis.

The market hit bottom again in 2009 and has made a nice recovery since then. The current recovery, as was the previous, was orchestrated through QE, bail outs and financial manipulation but it has taken hold. Economic policies were a band-aid patch on the markets until the population could mature enough to bear up the burden of the Baby Boomers and still function strongly. The Gen X-er’s couldn’t do it alone, it took their younger brothers and sisters, and even their own kids in some cases, to lend a hand.

With that in mind there are some targets we can apply to the S&P 500. For one, the height of the secular bear is 750. It is reasonable to assume, using standard technical analysis, that the new secular bull would move up past the top of the range by at least that much before a major correction could be expected. This likely won’t happen in a straight line, will come with plenty of bumps and could take a year(s).

walking the dog

Stochastic Trend Following Strategy

Stochastics is one of my top indicators. It is useful for making several different types of technical analysis, the one I am going to discuss today is trend following signals.  Trend following signals are one of the best types of signals that this indicator gives and one that can be highly profitable for binary traders.  I prefer to trade trend following signals because they are more reliable. This may sound redundant as most trading educators will tell you that “the trend is your friend and you should trade with your friend”. Well, it is and it is true. The power of the trend is without equal in trading.

What Is Stochastic

Stochastic is a unique indicator in that it assumes that the shorter term movements of an asset are random and cannot be predicted.  It is based on random walk theory and Brownian motion. Whereas the short term fluctuations are random, over time those random movements can be plotted in a way that predicts overall direction. It’s like this; Imagine a man walking a dog, the dog may pull the man side to side as it moves on the leash but the man controls the over all direction the two are moving in. In this analogy the dog is the short term random day to day movement of the market where the man represents the longer term trend. No matter how strong the day to day gyrations of the market (the dog) pull against the trend (the man), the trend still leads the market higher.

  • Stochastic oscillator uses two lines, %K and %D. The %K line is calculated and then smoothed with a moving average to produce the %D line. Signals can be taken in a variety of ways including crossovers, convergences and divergences. Click here for more on using stochastic to trade binary options.

stochastic dog and man

What Is The Trend?

The trend is the general direction of the market. It will either be up, down or sideways.  Sometimes an asset will trend strongly, that is it will visibly move higher on your charts. Sometimes it will trend weakly, becoming visible as different technical analysis techniques are applied. I will describe two methods of determining trend that can be used with this strategy. First will be the visual method, for the second I will tell you how to use stochastic and time frame to determine trend.

Visual Trend Determination – Visual trend determination can be done with the naked eye. Two things that make it easier is experience and a strong trend. Otherwise you will need to use trend lines. Trend lines connect consecutive peaks and troughs on an asset chart. A series of higher peaks and troughs equals an uptrend, a series of lower peaks and troughs a downtrend.  If the peaks and troughs do not trend higher or lower then the trend is said to be sideways or range bound.  Stochastic trend following signals work better in an up or downtrend but can also be used in a sideways market.

Using Stochastic To Find Trend – Stochastic can be used to find or to confirm trends. Stochastic confirms a trend when it is making higher peaks along with an asset that is making higher peaks, or lower peaks as the case may be.  If stochastic is confirming a trend you can take a signal whenever stochastic is pointing in the direction of the trend. This is what I mean; if you have a visual up trend and stochastic is confirming it you can take a signal whenever stochastic makes a new trough and then points up.

  • A series of higher peaks and troughs, or lower peaks and troughs, indicates trend the same as they would if presented on the price chart itself. Notice on the right hand chart below how the %D line makes a series of higher troughs coincident with the asset.
Using stochastic to find trend.

Using stochastic to find trend.

Using Time Frames For Trend – You can also use different time frames to determine trends with stochastic.  To do this you will need to use two different time frame charts, I like to use the weekly/daily or daily/hourly combination depending on the asset. Weekly/daily works well with stocks and indices while I prefer the shorter time frame for currency and commodities. This is how it works; stochastic on the longer term chart sets trend, stochastic on the shorter term chart gives the signal. If, on the weekly chart, stochastic is pointing up then you would trade bullish signals on the daily charts. Or if using the daily/hourly combo the stochastic on the daily would set trend while signals would come from the hourly chart.

  • Match stochastic in different time frames to determine trend. If stochastic is pointing or trending up in a longer time frame then bullish stochastic signals can be taken in a shorter time frame. Look at the chart above. On the left hand side, weekly data, the asset formed a bottom between November-February with a bullish stochastic crossover setting the trend. On the right hand side, daily data, bullish signals are taken for short term trades.

Stochastic Trend Following Signals

Weak Signal/Strong Signal – This technique will give off at least three signals that I regularly follow. The weak signal, the strong signal and the continuation signal. The weak signal is always the first one you will see. It takes a lot of practice to be able to capture this signal and profit consistently but the good news is, it is almost always followed by the strong signal. The weak signal is when the indicator first changes direction to return to the underlying trend.  This signal usually takes longer to develop into profits so I use longer expiry with this one. A signal on the daily charts may take 1-3 weeks to move into the money whereas a signal on the hourly charts may take a few days or a week. For the daily signal, use a one month expiry, for the hourly use one week.

usd-jpy strong stochastic signal

The Strong Signal – The strong signal comes after the weak signal, in fact, there is no strong signal without the weak signal. This is good news because if you did not catch the weak signal you can still get in with the strong one. The strong signal occurs after the market moves on the weak signal, retests support and then moves higher again. This causes a comparable dip/retest on the indicator as shown in the picture below.  Strong signals usually develop into profitability much faster so I use a much shorter expiry. For signals on the daily charts one week is usually perfect while on the hourly charts end of day or end of tomorrow works very well.

strong stochastic signal

  • The strong signal always happens after the weak signal. The strong signal confirms support and is usually accompanied by a coincident signal in the asset. Look at the chart above. At point 1 the weak signal is given. At point 2 the strong signal is given, notice how at point 2A the asset is making a similar confirmation of support and then moves higher.

The Continuation Signal – Once the asset is trending on the strong signal it is time to look out for possible continuation signals. This will be a dip or ripple in the stochastic indicator similar to the strong signal but occurring after the move has begun.  It could also occur after a near term pullback. Look at the chart above.  After the strong signal has fired the asset moves higher until it reaches over bought status. The asset keeps trending higher but the %D crosses below and then back above the %K line forming a continuation signal.

  • Once the strong signal has been given and the asset is moving higher any time that the %D dips or crosses below the %K line and then points back up can be considered a continuation signal. If both lines are pointing in the same direction (up in an uptrend, down in a downtrend) the signal is stronger than if not. Look at the chart above. At point 3 the asset has dipped below the %D and then crossed back above creating a continuation signal.

Support and Resistance With Stochastic

Support and resistance are great additions to this strategy. For one, if your signal is developing while the asset is testing or confirming either support or resistance it is a much strong signal than if not. For another, if your signal fires and there is a resistance level close by it may adversely affect your trade. Knowing where these areas are in relation to the asset price and stochastic is a really good way to weed out false signals and potentially bad trades.

  • I use support and resistance with stochastic to create strong signals. I draw my own lines and also use the Fibonacci Tool available with most charting packages. If my stochastic signal forms and confirms a support or resistance it is a stronger signal than if it forms on its own. Likewise, it takes more than an asset to reach or even bounce off a support or resistance line to create a strong signal.  If you look back at all of the charts I have presented here today you will notice that each of the strong signals was confirming support of some kind. Support could be a moving average, support line, trend line, Fibonacci, Bollinger Band or many many other forms of technical analysis.

I have another article about using support and resistance in trading. It is a great addition to this technique and one I highly recommend.