Below is a first pass to create a working outline for using WIND and other algos to trade S&P 500 binary options:
- Use WIND to determine the direction of the Binary trade. Solid GREEN in the pre-market points to buying the binary option. Solid RED in the pre-market points to selling the binary option. If WIND is neither significantly GREEN or RED, no trade should be taken.
- User PREM to assist with the entry time of the Binary trade.
- Close out trade upon x profit. Or close out 1/2 of the trade at x profit (or if Price hits a certain ‘Price Magnet’ and let the remaining 1/2 run until HH:MM (e.g. 3:58 p.m. EST or 4:12 p.m. EST).
In the graphic below, the horizontal lines are S&P 500 Price Magnets. Day traders can use as exit targets.
In the next week or so we will be offering a version of …sceeto S&P 500 Price Magnets for NinjaTrader.
Hope this helps.
