Option Levels. Making Money on the Stock Exchange without Investment

Option Levels at Premium Signal

When talking about the Option Levels, it is necessary to clarify some concepts. Option – is the right to buy an asset at a certain period in order to sell it at the best possible price. The assets are the shares or other commodities. When Forex appeared to the world, speculations with exchange differences of currency pairs became popular, including in option markets. Over time, appeared a new tool called Binary Options (BO), which incorporates qualities of Classical Exchange Market and Forex, but at the same time it is not received at the trading system. BO requires fulfilment of specific conditions in order to get a fixed profit during specific time. More often – you should correctly predict the asset price direction. The absence of direct relation with price indexes significantly eased traders’ way to profit.
BO trading are carried out on gaming platforms – one of the positive examples is Prime Signals. A good platform is not just a terminal, chart is also a large selection of technical means such as indicators, trading signals, and most importantly – the theoretical material. Before mastering BO trading, you must know the answers to the following questions: How they are traded on Stock Exchange, on Forex, how the assets are actually used?

Types of BO
BO are divided into:

  • Call increasing – which are purchased when price goes up – a signal to Buy anticipate them in technical systems;
  • Put lowering – are purchased when price goes down – a signal to Sell anticipate them;
  • One Touch – when price achieves a certain level for the option period;
  • No Touch – as opposed to the previous one, achievinh the indicator is not expected;
  • Corridor (In; Out) – forecast – whether the asset price remains in the range of its fluctuations or goes out of it;
  • Below – rarely purchased option with reference to specific indicators.

Binary options have appeared in the Chicago Stock Exchange, US, which regulates the option levels on the market today.
In the network there is a misconception that not only alienates BO from the Exchange and classic option, but also equates BO to roulette. In fact, these tools interact perfectly, as the BO uses assets inherent in the stock exchange. The only significant difference is that broadcast operations does not affect the global trading system.
A trader Alexander Gerchik has found many similarities between BO and other trading systems. Currently, he is managing assets, but he started with Forex, and has developed successful strategies that can be used at BO market. Thanks to his experience and knowledge, Gerchik became a well-known figure in the world of trading.


Optional Levels – a Tool of Successful Strategies

Option Levels Indicator is a classic tool that is available at any trading platform, analyzing option levels in accordance with the data of the Chicago Stock Exchange.
Alexander Gerchik assumes that the option levels used in forecast provide a high fulfilment probability, backed mathematically. From his point of view, the strongest effect on the market has a trend break or reversal, which starts the movement, and the premise of using a trailing stop.
A Trailing Stop is a signal stated in advance to stop trading at a certain point. It can be fulfilled even when a trader is absent. Gerchik focuses on the physics laws, which are also reflected in the market. In this case – it is inertia: the price after reversal get a strong push, with visible period of future movement – you are advised to fulfil a deal there and set a pre-stop.


Trend-following Trading

During the seminars Gerchik formed a lot of principles that can be the base for both the beginner and for the trader with some experience. Among them there are two to pay attention to:

  • Thorough preparation should be preliminary to every bid – you should draw the desirable situation on the paper, including pre-mark and option levels;
  • Pay attention to other assets – not only to the currency, but for example, to the stock market, which can be much more profitable, and with skilful analysis one can easily find the necessary items.

If it is difficult for you to understand everything offered by Gerchik – spend some time studying his views  and at this time you can do nothing but follow the trend. Gerchik says that in a trend should be simple, with the correct solutions supported by indicators, signals and strategies. After all, the trnd-following trading is not just for beginners, but also way for experienced players have a steady income, reducing risks to a minimum.


Trading from the Support and Resistance Levels

Support and resistance levels clearly appear on the market with strong buyer or seller. The phenomenon is a frequent turnover in the period of active shares.
Support level – means that the price is under the control of the buyer (the Bulls). Resistance level – the sellers (the Bears) control the price. When the price is impenetrable – the situation on the market is called Intraday Horizontal Trade (Localization). At this point, the seller – deliberately or involuntarily – keeps the price – the Bear trend. When there is limited buyer to buy assets at the same, mutually beneficial, price – it is the Bull trend.
During localization Gerchik recommends pay attention to the option levels. Position above the level shows that we should buy assets, below – sell – it concerns the stock market. When adapting on the BO market Call and Put forecasts should be done at the appropriate positions.
Nota Bene: Sooner or later the price breaks the limit and the support level turns into resistance level and vice versa.


The above situation in the stock market, where trade fulfilled on the support and resistance levels, can be characterized as a bunch of: a long position – a short position. Long and Short.
A short position is located at the bottom level, it means price fall and suggests an interesting sequence of actions. The trader borrows shares from a broker at the current price. When the fall reaches the extreme point, he buys an asset at the lowest cost to recover the debt with the difference is his profit.
A long position is located above the level. It implies a price increase, and, therefore, the asset purchase of an asset for subsequent resale.


Trading Volumes

Today, trading volume and levels gaining popularity among traders. When they develop their mechanism they are more likely to identify profitable trades positions.
The main idea of the trading volumes is that strong players are coming to market not by chance, but for a specific purpose, simultaneously or gradually growing trading volumes. Players can trigger the upward, downward trend, the reversals. In any case, it is a call to action for a trader. Anyone learns to react to changes and in this case it is important to be able to make the correct forecast on volumes, that will depend on direction, as well as reversal followed by inertia, mentioned by Gerchik A.
Trading volumes and levels means:

  • Horizontal cut – optional levels formed by the prices movement and corresponding to amount of time, for example, the volume of the day;
  • Vertical cut – forms a candle. The long part forms tails or shades, the short – body. Shadows are the strong levels of support, fixing the market liveliness on the tip, where you should use Trailing Stops.


Gerchik Algorithm

We mentioned Alexander Gerchik in this article – a trading guru. His trading mechanism is worth mentioning too. In the original, it is tied to the stock market, but the main points will suit any trading system.
The work involves the night life: the working hours from 2am to 4:30pm, with a long break from 4 to 7am. Do not be frightened: all transactions take place at home at the personal computer, rather than at the factory with a sledgehammer or in the office – anyone can deal with it.
Here is a general picture: The process begins with checking the latest deals, identifying errors. Then there is an analysis of the current situation and the selection of stocks or futures. Shares should be filtered with the terminal using two timeframes:

  • M1- five-minute, without the use of indicators;
  • D-1 – full-time, with indicators.

Gerchik recommends not to avoid the weak stocks, which can give a good reversal on growth. Just as a strong asset can broke on the fall. In both cases we get the opportunity to play at the breakdown-rebound.
After a pause from 7:30am, you should make the final selection of shares. Then analyze the market information. The trading session begins at 9:30am, when the market trend is finally set and you can see the share price in real time. At 4am you should make the primary analysis of the activities, collect charts screens – you will need it to form homework and error analysis.


Making Money in the Trading Systems without Investment

Many people, before entering the trading system for the first time, fear of financial loss. Nowadays trading on the stock exchange without investment become a reality. In order to do this, you should find online gaming platform, where a new trader gets a small bonus for registration of $10 or less. Thus, a person does not spend money, and uses provided means for testing the platform and their own abilities. It is a good chance to make money on options without investment, as this trading system requires a minimum amount of the contract: you can buy 10 options for $10 that is enough to decide on a strategy. This suggestion is just an example: each trading system, as well as a platform, offers its ways to attract customers in order to minimize or eliminate their upfront costs. You should remember one thing – the thorough preparation and good theoretical basis is the key to successful deals.
 By Artem Sviridov, Education, January 25, 2016