Money Management

Been looking at binaries last week or two, been thinking about money management. I was thinking if I only take bets where my potenital profit is at least 40 pips, and set a stop on all bets (using IG here) at 13 pips, this would mean that every one winning bet would cover 3 losing bets, giving me a risk reward ratio of 3:1, which coupled with some technical analysis should make some money.

13 pips, thats like having a 13% stop loss on a spreadbet, you probably wouldn't get stopped out much, but I realise that it's not going to be the same thing as with binaries. So say I was using daily up/down bets on commodities, indices, currencies and equities, would I be getting stopped out every bet using this strategy? Obviously to a certain degree it will depend on the volatility of the underlying. One thing that concerns me is that because the price is not based on the underlying it must be quite open to manipulation.

Any thoughts?

Hi

Things might have changed at IG, but I wasn't aware you could set a stop-loss on binaries (unless you mean manually, of course). If looking at daily up/down, this would mean sitting in front of the computer all day. If 5 or 20-min up/down, beware things change very quickly and a stop-loss of 13 pips might be impossible to execute. Hourly up/down might be the best way to go if you are looking at manual stop-loss.

I'm just an amateur though, I'm sure you'll get loads of proper advice from the pros.

Hey, thanks for the reply.

Well I thought I did see that you can set a stop loss with IG, maybe I was imagining it, will take another look when I get home. I would be looking to use up on the day/down on the day, no screenwatching for me.

I don't know. Looks like closed markets give the option to set a stop (see gold) while open markets (see FTSE) don't. Which leads me to my next question, why is the FTSE not closed when it's 20:38?

Mmm, interesting stuff...

Had a look at binary hourlies and it seems you can place orders and set stops with Aussie hourlies but not FTSE or Wall St. Don't know when FTSE hourlies are "closed" as they seem to be continuously open (e.g. 0900-1000 etc. now open for tomorrow) therefore never able to place order or set stop.

Aussie hourlies are closed until they run i.e. from 0100hrs BST at the mo. Very interesting thought, being able to place order and set stop but I'm wondering how easy it is for an order to be executed, e.g. in reality would a binary ever fall dead on 60 or whatever the order was.

Anyone else out there trade binaries in this way i.e. place order and set stop?

Sorry Jim, I can't answer your question as to why some markets are always open while others close out-of-hours. Maybe someone else can...

J

Hi Jim

I e-mailed IG today to ask why some binary markets appear to have orders and stops and others do not. This was their reply:

All binaries are fixed odds already. You cannot set a stop on any of them. Please ensure you are not getting mixed up with any other trade.

So, it must be a problem with their platform that the ticket comes up with orders and stops when you click on e.g. daily Gold and hourly Aussie. I haven't actually tried placing an order but imagine it just wouldn't process such a request.

Hope that helps

J

I did the same today, got pretty much same response. Thanks. Back to the drawing board.

Jim Nasium said:

Hey, thanks for the reply.

Well I thought I did see that you can set a stop loss with IG, maybe I was imagining it, will take another look when I get home. I would be looking to use up on the day/down on the day, no screenwatching for me.

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