A-Ju-kebox of Binary Options

[donaldduke]

Hey Travis,

Started on the book. Thanks for that.
I used to lose money doing options. Looked at binary options as a good way to build capital over the short term. Some successful players such as Donaldduke and ninjatrader(here on t2w) seem to have done well. However, they moved to trading the futures market after building capital using binaries. I'm hoping to do the same.

Binary Betting is alot harder these days.
Spreads are wider and IG have refined their pricing model over the years.

I dont recommend Binary Betting these days, not unless you are very very selective in your bets.

 

[D70]

Binary Betting is alot harder these days.
Spreads are wider and IG have refined their pricing model over the years.

I dont recommend Binary Betting these days, not unless you are very very selective in your bets.

I concur very much with you donaldduke..... they used to misprice their binary options by an average of 2 points but they have pretty much got that down to 0 now. Shame

 

[j2a_aj]

Hey DD,

I understand the importance of selective trading. But as my thread has displayed, despite my mind planning for these specific trades that do in fact make moves as expected, I keep indulging in these cheap thrills on unplanned trades. Gambling my capital away. Trying to keep it simple now,
1. Start trading with small capital AGAIN.
2. Work on simple strategy of sticking to larger trend, Buy at support, Sell at resistance.(With RSI indicator)
3. Trying to wrap my HEAD around the concept of MONEY MANAGEMENT & SANITY.

 

[D70]

Hey DD,

I understand the importance of selective trading. But as my thread has displayed, despite my mind planning for these specific trades that do in fact make moves as expected, I keep indulging in these cheap thrills on unplanned trades. Gambling my capital away. Trying to keep it simple now,
1. Start trading with small capital AGAIN.
2. Work on simple strategy of sticking to larger trend, Buy at support, Sell at resistance.(With RSI indicator)
3. Trying to wrap my HEAD around the concept of MONEY MANAGEMENT & SANITY.

J2a_aj
It is key that you get the timing of your entry correct.
What i mean is that the binary options you trade have a very powerful time decay factor, enter too late and you are in effect trading delta only.
Enter at the perfect point and you will be in the money very quickly without the spot price moving.
Good luck.

 

[j2a_aj]

Thanks.
Are there any specifics that you think I should watch out for ?

 

[D70]

Thanks.
Are there any specifics that you think I should watch out for ?

Hi j2a_aj,
I would suggest you write out the model that binary options are priced off (black scholes). Understand this and you will understand the options you are trading.
ps. Not sure what your question is actually asking me!

 

[j2a_aj]

Now, when you say write the model, do you mean DERIVE the model or just understand the components?

What I meant was, as absurd as it may sound, is there a way to know if you have picked up the option at the right time ?

 

[D70]

Hi j2a_aj
There is no need to derive black scholes.
It just helps if you have looked into it and understood the components.
Plus, if you build it and get a live feed into your excel sheet you can price the options yourself....

And in response to whether you have picked it up at the right time, you will know as you will find yourself very quickly "in the money". But it's all in the maths.

 

[j2a_aj]

Hey D70,

Could you expand more on this ?

"And in response to whether you have picked it up at the right time, you will know as you will find yourself very quickly "in the money". But it's all in the maths."

Also, I shall try and hunt down a script which does the live feed.

Many thanks.

 

[D70]

Hi j2a_aj
There isnt really any more to add.
You need to look into option pricing then hopefully what I have said will make sense.

 

[Upthespurs]

Hey j2a, i have recently registered at a binary option brokerage. this is my first time trading. not really sure what im doing. found this article http://forexmagnates.com/forex-bina...ximize-your-earnings-during-a-false-breakout/

do you have any tips for what pairs i should look for ? to optimize bereak out strategy?

 

[Upthespurs]

sorry wrong link http://www.dailyforex.com/articles/...ze_your_earnings_during_a_false_breakout.aspx

 

[j2a_aj]

Hey Upthespurs,

My input would be as follows :

1. Learn the basics of trading before you enter any form of trading.
2. Binaries are high risk as they have high time expiry and you can lose your capital very quickly even if the trade were to move in your direction.
3. Learn in detail about money management before entering trading.
4. Use IG markets which provides a ladder of binary options as opposed to the new bucket shops that offer a 74% return on each trade.

I have shifted from binaries to Forex and am reasonably successful. Thanks to traders such as D70, Donaldduke and Travis. I still use binaries for trading news occasionally, but then again, if it doesnt move, the trade can always move against you.

A good starting point would be to start looking at some free videos by this guy 'Sam Seiden'. His videos made me a profitable trader.

Hope this helps.

 

[moka2]

J2a_aj

Do you know you can construct your Binary Options ona regulated Exchange with same or better pay out!
For Example look in to DJX index Options , Weekly Monthly etc
Binary OPtion = Call Spread or Put Spread
As simple as that
Fixed risk , fixed return
Why bother with market maker OTC Binary!

 

[NVP]

Hey Upthespurs,

My input would be as follows :

1. Learn the basics of trading before you enter any form of trading.
2. Binaries are high risk as they have high time expiry and you can lose your capital very quickly even if the trade were to move in your direction.
3. Learn in detail about money management before entering trading.
4. Use IG markets which provides a ladder of binary options as opposed to the new bucket shops that offer a 74% return on each trade.

I have shifted from binaries to Forex and am reasonably successful. Thanks to traders such as D70, Donaldduke and Travis. I still use binaries for trading news occasionally, but then again, if it doesnt move, the trade can always move against you.

A good starting point would be to start looking at some free videos by this guy 'Sam Seiden'. His videos made me a profitable trader.

Hope this helps.

Forex Rocks ......nothing like it in the world

 

[moka2]

......nothing like it in the world becasue of??? Leverage?
- MArket Maker risks
- Mt 4

 

[rsh01]

A good starting point would be to start looking at some free videos by this guy 'Sam Seidon'

Hi UTS

(Edit: not entirely sure why responding to 2+ y/o post though).

I concur with j2a_aj but i did find his free webinars slightly repetitive, and somewhat missing something, which I guess is the point cos hes a vendor and wld not reveal the lot.

I found the missing gaps by following the nbt thread on ff.com & then on to nbt's webpage No Brainer Trades - Trading Forex and Other Markets Using Globally Identifiable Actions - which is all free. he doesnt reference sam much, but if you know the principles of S&D then the links between the 2 guys will scream out.

each to their own though. g/l.

(btw, am a big AVB fan, even when he was at scum blues!)

 

[rsh01]

......nothing like it in the world becasue of??? Leverage?
- MArket Maker risks
- Mt 4

cos hes an fx vendor?

the correlator has already been replaced by QE and the risk on/risk off swings.