Strategy › Option Sniper

Option Sniper

Options sniper for Binary Options


The binary options type of trading is focused on making predictions for the direction of the underlying asset, and payouts do not depend on the price difference in pips. Thus most of the traders prefer using ultra-short timeframes to maximize profits. The main idea is that binary options traders could open a larger number of deals in one direction with shorter expiration time. However, short periods might bring a lot of market noise in terms of false trading signals from technical indicators. Therefore, a reliable combination of technical tools is required to maintain high efficiency of the trading system. Option sniper was designed exactly for trading binary options on ultra-short timeframes.

What is Option Sniper?


The option_sniper is based on three technical indicators to supplement each other’s strength and smooth weaknesses. The profitability of any trading system depends on profitable entries. It’s essential to determine a perfect moment when to start buying CALL or PUT options. The aim is to change the direction of trading rarely but effectively instead of switching from call to put options like a machine gun.

How does Option Sniper work?


Options sniper is a modification of Commodity Channel Index and it’s similar to an oscillator as it has overbought and oversold thresholds, and its value is rangebound. The ADX and DI indicator measures the trend’s momentum as well as points to the current market’s sentiment. Parabolic SAR is represented by dots above or below the price, showing the current direction of the trend.

A screenshot below shows how the Sniper strategy looks like:

Option Sniper

What are the best settings for indicators?


For the binary sniper, Parabolic SAR has three parameters:

  1. Start;
  2. Increment;
  3. Max Value.

It’s recommended to leave the default settings for this indicator. CCI has a default period of 20 bars, and it influences the speed of the oscillator. Traders could change the period in the range of 13-34 bars, testing the indicator’s efficiency. The ADX and DI indicators best settings are 13 bars for the period and 20 for the threshold measuring momentum.

Parabolic SAR Settings
Charting packages by default will set the α value to 0.02

How does option Sniper work?


The CCI oscillator acts as a leading indicator, pointing to a moment when a trading signal could occur; ADX and DI measure current trend momentum and shows the direction of the asset price; Parabolic SAR acts as a lagging indicator to confirm the previous trading signal. Binary options Sniper does not suggest many entries, while traders should monitor market conditions and wait for a moment when all of the three technical tools match required conditions to pull the trigger.

Conditions to buy call options:
  • CCI line crosses the oversold level of -100 from below;
  • ADX histogram is green and rising (+DI line is above the -DI line);
  • Parabolic SAR dots jump below the price.

Option Sniper

Conditions to buy put options:
  • CCI line is falling below the overbought level of +100;
  • ADX histogram turns red or declines (+DI and -DI lines cross each other);
  • Parabolic SAR dots appear above the price.

Option Sniper

Conditions to stop the trading cycle


It’s also important to exit the trading activity in time, a perfect moment to stop trading comes when at least one of the indicators contradicts the conditions described above. For example, CCI crosses the oversold/overbought threshold, or Parabolic SAR changes the sentiment, or an opposite trading signal occurs.

Results with Binary Snipers


The Binary Sniper is a 60 seconds strategy designed to trade on currency pairs only. Effective results are usually achieved on most liquid pairs during a strong trend or high volatility. A test of the system on EUR/USD shows profitability in the range of 75/85% of profitable positions.

Examples of profitable trades


Here are several examples of profitable trading cycles, showing when to enter the market and when to stop buying options as a binary snipers.

Buying CALL options for USD/CAD with M1 Strategy:

Option Sniper

Buying PUT options for USD/JPY on 15M timeframe:

Option Sniper


If you like Sniper Binary, you might also be interested in this Keltner Channel Strategy

Pros and Cons


Pros:

  • Multi-purpose strategy with many currency pairs;
  • Fast trading system designed for short expiration time;
  • Reliable trading signals during strong trends and active periods;
  • The Effectiveness is more than 75%.

Cons:

  • Rare signals;
  • False signals when the market is quiet.

Conclusions


As long as there is too much noise on ultra-short timeframes, the efficiency of the binary snipers might fluctuate. Therefore, it’s recommended to monitor larger timeframes in terms of possible strong trends to happen, as well as choose the time for trading during active periods as technical indicators could give false signals when the market is quiet.


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