Deviation Level Radar

S6 - Study - Apex Indicators deviations and deviation levels
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Master the probabilities behind Implied Deviation Levels! Originated by Darrell R Martin Jr of Apex Investing for intraday trading application.

One of the first strategies I ever learned for binaries and still one of my favorites! I have a couple Ninjatrader work-spaces that show me the Deviation levels on all the major markets I like to trade. I can easily spot a Deviation trade opportunity in minutes. Today, one of those many opportunities was on the US Tech 100 (NQ). I found a very high probability strike at 4496, sold it and never looked back.

I use the Apex stop trigger to manage my risk and let these expire ITM. You can get deviation levels for free from Apex and they are automatically plotted on about 22,000 different underlying’s. They work on Forex, Stocks, Futures, Indices and commodities. Don’t settle for the copycats and imitators, get the most accurate and easy to use forward looking indicator out there!

I like to target strikes that are at least a 1.5 deviation total move or beyond, that gives me roughly an 86% probability of expiring in the money.

Thanks to @Ronin50 for working together with me and putting this together on this training :slight_smile:

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Thanks Darrell! Still one of my favorites! These days’s If I grab an end of day expiration I just let the probability play out and use a wider stop or no stop at all. shorter term expiration I will set at stop right about my strike price, maybe a tick behind. Its important to try and target strikes that have deviation levels in the way of your strike. Also read the expected volume. if you have ton’s of exceeding volume look to fill deep in the money strikes with working orders when the market is testing a 1 deviation or 1.5 deviation level. All of this becomes part of the “style” as you learn to trade them more. :slight_smile:

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Hi How much is the actual risk on the trade if you use stop loss and whats the maximum amount you willing to pay for the contract is it 70, 80? Can you please show the example of the trade?

Thanks

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The risk would be based on the price you entered and the price you exited x the value per tick x the contract size. Its not a set amount. Always base your entries and stops on the charts not on “$” your contract size should be based on “$” not your stops.

ie if my stop based on the chart is $50 and I’m willing to risk $100 then I can do 2 contracts. If I’m only willing to risk $50 then I can only do 1 contract.

Your risk tolerance does not impact the chart movement so it should not impact where you stop is placed simply how many contracts you trade.

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Ok lets say I sold eurusd itm binary with a strike 1.1343 when the current market price was 1.1336 and my sl is at strike so Im risking 7 pips so $7, but there is also spread $8 so is my total risk $7+$8 (spread)? Thanks :wink:

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Hi @stanz80

Actually in this case your risk is “around” $33 per contract if you have your stop at the strike price. Keep in mind only spreads have a $1 per tick/pip value, with binary’s there is really only three values we can be relatively certain of, $0 if it expires OTM, $100 if it expires ITM and around $50 on an open position with indicative at the strike price.

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So to keep rvr 1:1 I would have to buy for no more than 75 and sell for 25 but that would be pretty close to the strike right? Do you only take those trades at ±1.5 dev lvl or can this work at lets say ±1 dev lvl if the certain instrument hits lets say 1.5 dev move in the current day? and the vol is not exciding expectations? I did some trades on Friday at +1 and +0.7 dev lvls but the total move was over 1 dev in that day and vol was below expected, I won those trades, I lost 1 but that was the ATM contract which had the strike 1 pip above the +1 dev lvl. Thanks

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Distance to strike would be impacted on the time y ou entered the trade and what the IV was. It could be far away or very close.

Make sure to use volume if its climbing and exceeding it will probably keep going.

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So this would be an EPC trade?

How close to expiry are you entering the trade?

Also, you’re looking for a strike price that is at least 1.5 deviation level from the current price?

Huey

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The trade mentioned above and charts shown are looking for the 1.5 deviation levels. An EPC in and of itslef does not have to be based on deviation levels. A basic EPC trade is entering within the last 15 minutes a buy or sell, with approx $20-$25 profit potential. You would enter this trade based on some type of indication of immediate market direction / trend, not deviaiton levels

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I’m familiar with EPC trades. Since DM discovered the 1.5 deviation level he let NQ expire at 4:15 ITM.

So maybe I should have asked the question as if this trade is SIMILAR to an EPC trade?

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This has nothing to do with EPC.

Epc is premium collection directionally usually within the last 15 minutes. Check recent webinars John covered them last night.

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I was wondering if we were able to set something up like this. I was actually thinking about a deviation scanner for ninjatrader, where you could have all of your forex and indices together & when one hits a certain deviation level, it turns a certain color in the scanner. This would be just as great with less work on your end. I’m guessing we have to create a ‘workspace’ to set this up? I want to trade deviation level reversals.

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The deviation indicator has audio alerts built in

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