Is binary betting (and spread betting) just like playing roulette?

ln999

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Hi,
I'm a newbie and have been paper trading for the last few months whilst learning about technical analysis.

I've been looking at custom bets on igindex, specifically fast/binary bets. These allow the customer to bet higher/lower than current price on major indices, forex and US light crude. The timescale is 2 minutes from now or maximum a week from now.

The odds offered are approx. 4/5 (1.8/1) on either outcome. Igindex are effectively saying that predicting these markets is a coin toss (50/50). They must have done comprehensive analysis to come to this conclusion. So is betting on these markets for these timescales no better than playing roulette, a zero skill game? If these markets were predictable wouldn't the binary bet odds fluctuate depending on market conditions?
 
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Over 2 mins I would argue it is random.

Over a week it could be successfully argued you can predict the market with a comprehensive awareness of geopolitical events.

It depends on -

Which market
What announcements/publications are due that week
No major news CONTRARY to what you believe being released

IE it is a safe bet that the Ibex 35 was going to slide this week however if the Eurobloc came out in support of Spain with a pre-packaged bailout the market would have risen.

You are essentially betting that you expect nothing to contradict you within 7 days.
 
The odds offered are approx. 4/5 (1.8/1) on either outcome.

I'm confused. Are there any other costs? If they are offering you better than even odds on a coin toss are you not guaranteed to profit over time?
 
The odds reflect 55% chance of profit so there must be a spread to begin with or the OP has misread the binary odds/mechanism.

I don't play binary markets but if the odds quoted are true then the spread must reduce it to 49 or 48 %.
 
I'm confused. Are there any other costs? If they are offering you better than even odds on a coin toss are you not guaranteed to profit over time?

You risk 5 to make 4 , how this is better than coin toss odds ?
 
Sorry for the confusion, it was a typo.

The fractional odds offered are 4/5 which is equivalent to 0.8/1 (less than evens).
 
After searching the fixed Odds & binary betting forum I read that one IG custom bet client won almost £8000 but was then placed on dealer referral.

So the analogy In my original question should have been to blackjack rather than roulette. For most blackjack players, who are guessing, they lose because of the house edge. If they win by card counting, then they are thrown out the casino.

For most custom bet players, who are guessing, they lose because of the house edge. If they win by betting at the right times (eg major economic news releases), then they are placed on dealer referral.
 
After searching the fixed Odds & binary betting forum I read that one IG custom bet client won almost £8000 but was then placed on dealer referral.

So the analogy In my original question should have been to blackjack rather than roulette. For most blackjack players, who are guessing, they lose because of the house edge. If they win by card counting, then they are thrown out the casino.

For most custom bet players, who are guessing, they lose because of the house edge. If they win by betting at the right times (eg major economic news releases), then they are placed on dealer referral.

interesting. There is always a catch with these houses.

why not play the real market? you will then have the luxury to bet any timeframe you like; be it 2 minute or a week or a year.
 
I'm trying to find evidence that it's possible to profit from trading. I read that 95% of spreads bettors lose, that doesn't inspire confidence. I'm starting to think that investing is just a way for banks, brokers and spread betting companies to make risk-free commissions from investors playing a zero sum game.

I received my annual pension statement today. The investment gain was -5%. But of course, the pension company took 0.5% of my total pension in annual charges. I lose and they still win.

I think that sums up the financial services industry.
 
I'm trying to find evidence that it's possible to profit from trading. I read that 95% of spreads bettors lose, that doesn't inspire confidence. I'm starting to think that investing is just a way for banks, brokers and spread betting companies to make risk-free commissions from investors playing a zero sum game.

I received my annual pension statement today. The investment gain was -5%. But of course, the pension company took 0.5% of my total pension in annual charges. I lose and they still win.

I think that sums up the financial services industry.

I'm sure 100% of spread betters lose, just like 100% of all traders lose at some point.

How many have made good money by the end of year one? I think it's better than 5%, but not by much. Pareto's Law I think is in force.

And I wouldn't put it past the betting companies to all be members of some quiet cartel, I mean, there's only a dozen or so in the UK, who owns them? Who regulates them?

Don't get me wrong, I am positve you CAN win, I intend to do so myself, but the odds are deffo stacked up against us. You need to have a block of ice on your head and no real committments to keep from trading scared/greedy.
 
I was reading yesterday about how professional traders actually trade.

In general, they watch for stocks that are trading strongly on the day then they study the order flow. If there are lots of buy orders waiting to be filled then they jump on board the stock. Similarly, if there are lots of sell orders stacking up, they short the stock. I don't think the pros sit there studying candlesticks and indicators.

All the crucial trading info is available on a level 3 trading account which is only available to FINRA members and not individual investors. No wonder the pros win and retail investors lose, the pros have all the cards stacked in their favour. It's definitely not a level playing field. This ignores any insider trading that occurs, which makes it even tougher for retail investors to win.
 
Hi,
I'm a newbie and have been paper trading for the last few months whilst learning about technical analysis.

I've been looking at custom bets on igindex, specifically fast/binary bets. These allow the customer to bet higher/lower than current price on major indices, forex and US light crude. The timescale is 2 minutes from now or maximum a week from now.

The odds offered are approx. 4/5 (1.8/1) on either outcome. Igindex are effectively saying that predicting these markets is a coin toss (50/50). They must have done comprehensive analysis to come to this conclusion. So is betting on these markets for these timescales no better than playing roulette, a zero skill game? If these markets were predictable wouldn't the binary bet odds fluctuate depending on market conditions?

I think it’s more likely that the majority of people that play these markets (ie binary or fixed odds) are not professionals or serious investors who can predict the markets within a margin for error.

There’s always a house edge, which they build into the odds. Therefore, it makes no sense for a serious investor to do it in this way. If you go straight to the market, for example using DMA, you won’t have to pay for a ‘house edge’, which may eradicate your profits.

I’m betting they’ve worked out that the ‘punters’ will get a 50/50 success rate. I’m also betting that, if a good trader started betting on these markets in big size with success, they’d make life difficult for him (refusing to fill, restricting size etc). Like I said, I don’t think it wouldn’t make economic sense for experienced, savvy traders to ‘trade’ binaries/fixed odds.
 
Hello all
There is a bit more to Binary Betting than 50/50 or 4/5 or whatever you are talking. For e.g There are hourly and daily bets on indices,forex,etc.... on IG. If you think the ftse will go down today by 4.30 you may be able to take a different binary position( lets say the price is low.. 5-10 and the potential profit is 100. Of course you may get it wrong and thats a different question. the point i am trying to make is.. Binaries always work from 0-100. So if you get a low price and win you will make big money.so the 50-50 may not be true
 
its not really just the question of randomness .........its just that in binary trading you are excluding yourself from the only thing that will make you money long term in trading ..........that of extended trend moves on a buy or sell trade you make .......its the home runs that pay the bills

here you are just paying the Brokers providing the service

N
 
I think it’s more likely that the majority of people that play these markets (ie binary or fixed odds) are not professionals or serious investors who can predict the markets within a margin for error.

There’s always a house edge, which they build into the odds. Therefore, it makes no sense for a serious investor to do it in this way. If you go straight to the market, for example using DMA, you won’t have to pay for a ‘house edge’, which may eradicate your profits.

I’m betting they’ve worked out that the ‘punters’ will get a 50/50 success rate. I’m also betting that, if a good trader started betting on these markets in big size with success, they’d make life difficult for him (refusing to fill, restricting size etc). Like I said, I don’t think it wouldn’t make economic sense for experienced, savvy traders to ‘trade’ binaries/fixed odds.

and just like when Betfair first hit the world ......the opportunities and $$'s arbing the markets was quickly reduced to peanuts as people cottoned on and were able to do what bookmakers have been doing for hundreds of years ;)


N
 
and just like when Betfair first hit the world ......the opportunities and $$'s arbing the markets was quickly reduced to peanuts as people cottoned on and were able to do what bookmakers have been doing for hundreds of years ;)


N

:cheesy:
 
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