Olymp Trade

[Deanna]

Can you please explain if further what did you mean by saying “If you keep exploring it further, you’ll find more details worth attention”? I do have some suggestions but would love to hear your opinion first.

 

[2iquelo]

OK, why not? This is commonly known that the so-called range is the balance of price. Neither buyers, nor sellers reveal themselves yet. But once the price goes out of the range, this is when all the fun starts. The huge volume was built up in a range. It’s like a tight spring. The longer is the range, the more potential is built up there. Do you understand what I mean so far?

 

[Poinwan]

I think I do. You mean that once buyers or sellers reveal themselves and price leaves the range, it has a greater potential than the price that is simply moving along with the trend. I don’t know how to use it in options trading. This is good that Olymp has got forex platform as well, so I can check how it works there. I understand that this idea can help us get better risk:reward of a trade ratio. But I have no idea yet how to enter such trades and where the stop loss should be.

 

[Deanna]

Exactly. But what you described there can be used on a forex market only. As long as we are talking about Olymp Trade in this thread it will be wrong to omit other details important for options trading. As it was said already, the first and the most obvious usage or range moves is to place pending orders to buy options on the boundaries of the range, hoping that the price will bounce of them and return in a range.
But the price does not always bounce back to range. So what if we instead try working in the direction of a breakthrough? It's been mentioned that such a setup can offer a great potential of forex market. I agree. But I think it can be used for options trading as well.

 

[Poinwan]

Good point! But if on forex market I have an idea how to do the entry and where to place stop in case of a breakthrough scenario, for options trading I'm lost in guessess. Which is a pity, cause after trading a while on Olymp's demo account I got used to options trading and find it to be easier and less stressful to trade options.

 

[2iquelo]

Hmm, I'm not a big fan of options trading and neither a big specialist. But from what I've learnt Olymp has got pending by price order feature for options. So what we need to do is to after a breakthrough, we need to place such an order to the price value where after-breakthrough retracement will stop. Something like this:

 

[Poinwan]

Do I understand this correctly, that you've marked the potential retracement extremum at the top of a little range, from where this breakthrough started?

 

[2iquelo]

Exactly! 10 out of 10 guess

 

[Deanna]

Looks like a great strategy for options trading. I'm not sure of the rest of the market context, for the trade that you've shown, but look, there was another similar trade on the same screenshot. And again profitable if you trade options (would have probably ended up as a loss if we used forex).
See, I've marked another breakthrough on your screenshot with white. If we enter sell trade at the bottom of consolidation from where the breakthrough started, by the end of the next bar we will get profit!

Now I feel very sorry that my broker does not allow pending orders for options. It will be rather annoying to test and trade this manually, waiting for the retracement ot happen. It takes time, I guess. If the strategy turns out to be really good, I might need to open an account with Olymp Trade.

 

[Majind]

What an interesting find! It's worth reading numerous forum messages to run into such discoveries. Myself I use some indicators, but I agree that levels of support and resistance can really be considered a cornerstone of technical analysis. If you could share some of your statistics regarding this pattern, I'd highly appreciate that!