Binary options

fighteagle100 · Apr 18, 2015

Hi guys,

I consider trading binary options.

What do you guys think about binary options? is trading binary options similar to gambling?

Thank you!

alexaherself · Apr 19, 2015

fighteagle100 said:
is trading binary options similar to gambling?

Like so many other things, that depends on the attitudes, beliefs and behaviour of its participants rather than primarily on the method of trading itself.

fighteagle100 said:
I consider trading binary options.

TechQuant · Apr 20, 2015

fighteagle100 said:
What do you guys think about binary options? is trading binary options similar to gambling?

Yes and No.

hyperscalper · Apr 21, 2015

Binary Options success depends on Analytics

fighteagle100 said:
Hi guys,

I consider trading binary options.

What do you guys think about binary options? is trading binary options similar to gambling?

Thank you!

First of all, there are really 2 types of Binary Options. My work and remarks are based only on Forex based Binary Options, since there's where I have precision Analytics.

In any trading, obviously, the Analytics will determine success or failure. Whether long-term or short-term, traders must predict the future.

1) The most common is more like a "flip a coin" approach, will the price go UP or DOWN? Hundreds of "brokers" offer these, so you MUST be careful, since some are Criminal operations. Do your "due diligence" but these can be extremely good, if you can trust your broker, and the binary options results to rule out "cheating" so they give you a "fair deal"

2) NADEX. Owned by IG (IGmarkets.com) originally not available outside North America (North American Derivatives Exchange). This is now available to the Rest of the World (ROW) through IGMarkets apparently in your own country. You can actually get a real NADEX account, from what I have heard.

Although both of these are called "Binary Options" they are very different in their Rules of the Game, as well as their required Capitalization and "professionalism".

Start with the non-NADEX Binary Options. If you are in the U.S. you really can't get into them except perhaps at TradersWay, but I am not aware of any others which will accept U.S. clients. ALL others are presented with a wide choice of Binary Options brokers, and so it's best to "test drive" before you finally select the one you want to use.

MUCH later on, when you are better capitalized, and want to have more "flexible" and "professional" possibilities, then move to NADEX. NADEX Binary Options do not have to be held to expiration, offer many more Strike prices, but they are more "complex" in the various strategies you may employ. A trader can Buy/Sell Long/Short Contracts and liquidate them at any time, with the result Profit/Loss; or the trader can choose to hold until Expiration (not generally what the professionals would do).

A special category called "5 Minute Binaries" are available both at NADEX and all of the other Binary Options providers. These are obviously very short term contracts, and require Ultra Precision in Analytics, and speed in execution. You can't trade these on "bars" since a much Higher level of Precision is needed in the Analytics.

These are my absolute favorite, because I like the fast pace; and the opportunity every 5 minutes more or less around the clock.

Ask away if you have further questions !!

It's NOT gambling, provided you have the Analytics and skill to tackle them in a "professional" manner.

I hope this gives you some perspective.
Good Trading !
HyperScalper

options-george · Apr 21, 2015

Hyperscalper, thanks for your elaborate post!! I hope you don't mind an additional question on the topic.

I have traded some binary options with IG many years ago, but have not traded any recently.

My gut feel has always been that the implied edge, i.e. the implied transaction costs, for binary options are very high. Higher than the typical bid-ask spread and commissions for trading outright instruments.

Are you able to comment on what the typical transaction cost is in those?

hyperscalper · Apr 21, 2015

NADEX costs versus other Binary Options costs

options-george said:
Hyperscalper, thanks for your elaborate post!! I hope you don't mind an additional question on the topic.

I have traded some binary options with IG many years ago, but have not traded any recently.

My gut feel has always been that the implied edge, i.e. the implied transaction costs, for binary options are very high. Higher than the typical bid-ask spread and commissions for trading outright instruments.

Are you able to comment on what the typical transaction cost is in those?

Yes, of course, my friend ! We are here to help...

To be perfectly honest with you, here is MY ADVICE. Do not begin with the NADEX Binary options. You will most likely have a MINIMUM cost for Entry of $25-$30 per Contracts OTM (out of the money), and if you decide to go for ATM (at the money) then you will be forced to risk $50 to win $50. And if you are tempted to go for ITM (in the money) contracts because they SEEM to be a "sure thing"... you can Risk $80 in order for the chance to make $20.

SO.... the bottom line is that you really are forced to commit a larger amount of money on NADEX and so it is only for experienced, and moderately well capitalized traders !!! To get the Odds more in your favor, and reduce your Risked capital, you need Incredibly good Analytics; otherwise those OTM's will be very unlikely to move into the money and you will lose your Risk capital.

I'm not trying to be confusing here, believe me !!!! But NADEX is complex, and generally too expensive for someone starting out.

This is why I'd stay with the $5 type Binary Contracts (non-NADEX) so my Risk is low, even though they offer payouts in the range of 60%-90% of Risked capital.

If you are a European, you are lucky and can join Dukascopy Europe. They offer Binary Options with payouts in the 90% range, and the system are more "solid" than those offered by SpotOptions and other "white labelled" platforms. You can also trade Forex and CFD's etc, and Dukascopy is simply the best.

Dukascopy's Binaries have a Bid/Ask spread. NADEX as well, and it's a fairly wide spread. Most other Binaries just use the MID price, since they are designed simplistically and require less skill. But for you, please just avoid the NADEX for now, and stick with either Dukascopy or other reputable Binary offerings.

For you, then you can keep your Risks LOW and focus more on technique and the precision of your Analytics. I could help you there... But if you jump into NADEX, then I believe you are at Risk of blowing out and becoming disillusioned.

TO ANSWER YOUR QUESTION: I believe Binaries are extremely "Sensitive" and allow for profit extraction with a Minimal movement in Price. However, as I keep saying, Analytics and Precision Entry must be First Class..... So they offer an "Edge" over straight Forex trading, because they Limit both the Maximum Loss and the Maximum Payout. But they offer frequent "opportunity intervals" and that may offset those limitations.... Capiche? LOL Keep asking, others may have advice for you.

I hope this does help you !!
Good Trading !
HyperScalper

hagshi · Apr 22, 2015

fighteagle100 said:
Hi guys,

I consider trading binary options.

What do you guys think about binary options? is trading binary options similar to gambling?

Thank you!

Hi flight eagle did you get this?

hyperscalper · Apr 22, 2015

Example of Reward to Risk Ratio NADEX Binary Options

hagshi said:
Hi flight eagle did you get this?

For educational purposes, to understand NADEX trading,
I will simply post this video, which illustrates that you should
be seeking OTM (out of the money) positions which RISK you
a defined amount, and that you have the choice:

1) to Scalp out a profit early, or...
2) to wait until contract expiration.

On NADEX 5 Minute contracts, shown in the video,
the defined range of Contract values is $0 to $100.

The CALL (long) side is easy to understand, but the
PUT (short) side is slightly weird, due to the defined
$100 as the maximum value.

So a CALL at $15 is the same Risk as a PUT at $85,
not really that difficult.

In the 5 minute Binaries, you have also the choice
of 5 simultaneous, but different Strike Prices.
A judicious choice of which contract to choose is
important, as you want to see the underlying Forex
price to make a transition across the Strike price
so that the Contract price correspondingly moves.

HyperScalper

hagshi · Apr 22, 2015

fighteagle100 said:
Hi guys,

I consider trading binary options.

What do you guys think about binary options? is trading binary options similar to gambling?

Thank you!

Hi flighteagle,

I consider myself an expert in forex, but a newbie to the binary option world. From what I can see so far its looks pretty legit, and an easy way to make money, but I would pay very close attention to making withdrawls of my money. Put a couple hundred max in and play with it watch all the videos pick the brains of the b/o people on this site and just go for it. Good luck to you flighteagle, 3 in the green. Take care.

hyperscalper · Apr 22, 2015

NADEX is fully CFTC regulated by Law

hagshi said:
Hi flighteagle,

I consider myself an expert in forex, but a newbie to the binary option world. From what I can see so far its looks pretty legit, and an easy way to make money, but I would pay very close attention to making withdrawls of my money. Put a couple hundred max in and play with it watch all the videos pick the brains of the b/o people on this site and just go for it. Good luck to you flighteagle, 3 in the green. Take care.

Yes, most definitely, be careful. But with NADEX you have no worries at all, since they are fully regulated and are forced by law to be transparent and honest.

HyperScalper

hagshi · Apr 22, 2015

hyperscalper said:
Yes, most definitely, be careful. But with NADEX you have no worries at all, since they are fully regulated and are forced by law to be transparent and honest.

HyperScalper

Oh, OK, thank you.

hagshi · Apr 22, 2015

Thank you.

hyperscalper said:
Yes, of course, my friend ! We are here to help...

To be perfectly honest with you, here is MY ADVICE. Do not begin with the NADEX Binary options. You will most likely have a MINIMUM cost for Entry of $25-$30 per Contracts OTM (out of the money), and if you decide to go for ATM (at the money) then you will be forced to risk $50 to win $50. And if you are tempted to go for ITM (in the money) contracts because they SEEM to be a "sure thing"... you can Risk $80 in order for the chance to make $20.

SO.... the bottom line is that you really are forced to commit a larger amount of money on NADEX and so it is only for experienced, and moderately well capitalized traders !!! To get the Odds more in your favor, and reduce your Risked capital, you need Incredibly good Analytics; otherwise those OTM's will be very unlikely to move into the money and you will lose your Risk capital.

I'm not trying to be confusing here, believe me !!!! But NADEX is complex, and generally too expensive for someone starting out.

This is why I'd stay with the $5 type Binary Contracts (non-NADEX) so my Risk is low, even though they offer payouts in the range of 60%-90% of Risked capital.

If you are a European, you are lucky and can join Dukascopy Europe. They offer Binary Options with payouts in the 90% range, and the system are more "solid" than those offered by SpotOptions and other "white labelled" platforms. You can also trade Forex and CFD's etc, and Dukascopy is simply the best.

Dukascopy's Binaries have a Bid/Ask spread. NADEX as well, and it's a fairly wide spread. Most other Binaries just use the MID price, since they are designed simplistically and require less skill. But for you, please just avoid the NADEX for now, and stick with either Dukascopy or other reputable Binary offerings.

For you, then you can keep your Risks LOW and focus more on technique and the precision of your Analytics. I could help you there... But if you jump into NADEX, then I believe you are at Risk of blowing out and becoming disillusioned.

TO ANSWER YOUR QUESTION: I believe Binaries are extremely "Sensitive" and allow for profit extraction with a Minimal movement in Price. However, as I keep saying, Analytics and Precision Entry must be First Class..... So they offer an "Edge" over straight Forex trading, because they Limit both the Maximum Loss and the Maximum Payout. But they offer frequent "opportunity intervals" and that may offset those limitations.... Capiche? LOL Keep asking, others may have advice for you.

I hope this does help you !!
Good Trading !
HyperScalper

Thank you HyperScalper, That's the kind of answer I was looking for for my concerns being a newbie to binaries (even using the slang) now. OK, I'm an expert in TA and analytics, so presumably I should do OK with this.

hyperscalper · Apr 22, 2015

NADEX Binaries better, if only slightly more expensive

hagshi said:
Thank you HyperScalper, That's the kind of answer I was looking for for my concerns being a newbie to binaries (even using the slang) now. OK, I'm an expert in TA and analytics, so presumably I should do OK with this.

Yeah, man, there are TWO distinct ways to survive in Binaries.

Go for the legitimate NADEX, where more knowledge is required, but you do need a bit more capitalization. After all, the 70% return Binaries are designed for the "gambler" and somebody who can bet $5 time after time.

As you can see, with properly choice of OTM (out of the money) NADEX contracts, you can significantly limit your downside (not as low as $5, but certainly $20) while have a possible return of from 2x up to 9x of your Risk capital.

NOW, you can use Technique alone; but if you "know" the underlying, on which things are based, then you're truly in a business with an "edge" and Risk Control.

What more could a Trader want? Downside risk limitation, but upside significant opportunity to profit, and to scalp.

Good Trading !
HyperScalper

fighteagle100 · Apr 23, 2015

hyperscalper said:
Yeah, man, there are TWO distinct ways to survive in Binaries.

Go for the legitimate NADEX, where more knowledge is required, but you do need a bit more capitalization. After all, the 70% return Binaries are designed for the "gambler" and somebody who can bet $5 time after time.

As you can see, with properly choice of OTM (out of the money) NADEX contracts, you can significantly limit your downside (not as low as $5, but certainly $20) while have a possible return of from 2x up to 9x of your Risk capital.

NOW, you can use Technique alone; but if you "know" the underlying, on which things are based, then you're truly in a business with an "edge" and Risk Control.

What more could a Trader want? Downside risk limitation, but upside significant opportunity to profit, and to scalp.

Good Trading !
HyperScalper

I understand this, however isn't it difficult to analyse a security for short-term time frame.. Like who can predict the price of a security going up or down within 5 minutes.. that is similar to flipping a coin

hyperscalper · Apr 23, 2015

Forex Micro trend analytics are Real

fighteagle100 said:
I understand this, however isn't it difficult to analyse a security for short-term time frame.. Like who can predict the price of a security going up or down within 5 minutes.. that is similar to flipping a coin

Sorry, but let's take an analogy. Before radio waves existed, we had no idea of that reality.

Similarly, before an effective analytic exists, Traders think things are simply "random". Before we understood the "common cold" we thought it was caused by "cold", rather than viruses. You get the idea?

So "flipping a coin" is what you think about Forex prediction within, say the next 3 minutes; but I happen to know different, and can prove it... My Forex based analytics, which can be used to predict NADEX Binaries direction (for Forex) are similar to putting "electrodes" on the Market Makers' "heads". I can predict where they are likely to move.

But, is there a "residual" element which is "random"? Yes, there is. But let's say you can improve something by a factor of 10 or so, that's a Big Deal...

HyperScalper

fighteagle100 · Apr 23, 2015

hyperscalper said:
Sorry, but let's take an analogy. Before radio waves existed, we had no idea of that reality.

Similarly, before an effective analytic exists, Traders think things are simply "random". Before we understood the "common cold" we thought it was caused by "cold", rather than viruses. You get the idea?

So "flipping a coin" is what you think about Forex prediction within, say the next 3 minutes; but I happen to know different, and can prove it... My Forex based analytics, which can be used to predict NADEX Binaries direction (for Forex) are similar to putting "electrodes" on the Market Makers' "heads". I can predict where they are likely to move.

But, is there a "residual" element which is "random"? Yes, there is. But let's say you can improve something by a factor of 10 or so, that's a Big Deal...

HyperScalper

so you are saying that your knowledge is your technical analysis like reading past data charts and so on.. however woudnt u take into consideration the role of speculation in the short-term can potentially off set some of your analysis in the short term.. wheras in the long-term you have a better chance of being right as fundamentals can play a bigger role in an assets price

hyperscalper · Apr 23, 2015

Reading the minds of the Market Maker in Analytics

fighteagle100 said:
so you are saying that your knowledge is your technical analysis like reading past data charts and so on.. however woudnt u take into consideration the role of speculation in the short-term can potentially off set some of your analysis in the short term.. wheras in the long-term you have a better chance of being right as fundamentals can play a bigger role in an assets price

No, man, it's not like that. I've just got a couple of minutes, but here's the idea. When the Market Makers (who move prices) want to move up, they firstly position their Quote Patterns on the Depth of Market differently, in preparation for the move. Remember the key point, they know exactly in which direction they plan to move, and they are in complete control.

Then they execute their move. So this is the ultimate "leading indicator" because the "setup" prior to the move is almost always considerably before the move itself. If you can "read their intentions" from their quote patterns, then you have plenty of time to anticipate the move.

This is not "standard" analytics, but raw analysis of Quote patterns on the Depth of Market in real time. Now, most people would call this "Order Flow" analysis, which is actually true, as it is "Quote Flow" analysis, and quotes are "orders".

I restrict my comments to Forex, but it is applicable to other markets also, on the same general principles.

More later,
Good Trading !
HyperScalper

hyperscalper · Apr 23, 2015

hyperscalper said:
No, man, it's not like that. I've just got a couple of minutes, but here's the idea. When the Market Makers (who move prices) want to move up, they firstly position their Quote Patterns on the Depth of Market differently, in preparation for the move. Remember the key point, they know exactly in which direction they plan to move, and they are in complete control.

Then they execute their move. So this is the ultimate "leading indicator" because the "setup" prior to the move is almost always considerably before the move itself. If you can "read their intentions" from their quote patterns, then you have plenty of time to anticipate the move.

This is not "standard" analytics, but raw analysis of Quote patterns on the Depth of Market in real time. Now, most people would call this "Order Flow" analysis, which is actually true, as it is "Quote Flow" analysis, and quotes are "orders".

I restrict my comments to Forex, but it is applicable to other markets also, on the same general principles.

More later,
Good Trading !
HyperScalper

I finally got some time to do some prolonged Live scalping on NADEX. I held one contract for an $85 WIN to Expiration, these are 5-minutes Binaries, but ONLY because I had no choice !! Liquidity was gone. Just barely won that one, but the loss side was only $15.

But all the rest of my 50 or so Scalps are from about $10 - $35 or so profit, and haven't lost one today. The main reason is that I consult my Analytics for both short term, and micro term trending, then select the "victim" contract, and Bid or Offer an EXTREME value as LIMIT order.

So on a Call, I'll BID maybe $15-$18 and on a PUT I'll offer maybe $85-$82, so in BOTH cases, my maximum RISK is about $15. Even BEFORE that Limit fills, I "tear off" a ticket for an opposite side Trade at MARKET value.

I don't think NADEX has Market Orders, so I define "market" as a LIMIT BID of 99 and an OFFER of 1 !! LOL haha. So basically whatever the market is. Once my initial limit fills, I just watch the market and if it pops in my favor anywhere from $15 on up to $40 or so, I CLICK and that takes me out at MARKET with a tidy profit.

Highly recommended, even gets "fun" at times

Key is Analytics, and knowing the prevailing trend, as well as having a good Eye for Pricing and KNOWING what you are trading. In my case, I stick with GBP/USD as the underlying Forex.

HyperScalper

moka2 · Apr 24, 2015

Binary Options brokers!

Certainly because of very short expiry cycle Binary Options appeal to people ( as compared to spreads made out of Exchange traded options)

However please remember the following
1) It is a double edge sword.. more opportunities to make as well as loose money in a day
2) Regulated brokers/ Exchanges! , Very few, Nadex is one of them Cantor I believe offers something but not very widely advertised
3) Lots and lots of so called brokers some outright scams some although known based in countries where the "Client money safety " could be questionable ( not even in Australia NZ, don;t think just because these are fist world countries your money is protected))
( I won't touch them better try with somebody like Nadex)

4) Irrespective of where they are based the issue of " Independently verifying where the underlying settled" and also the Market maker model ( for you to win broker has to loose, in that seance they are not brokers but book makers like in horse race betting)

SO please be very very careful don;t fall for the hype!
Best of luck

samkingdon · Apr 28, 2015

fighteagle100 said:
Hi guys,
It will depends on the time frame and the amount of research conducted

I consider trading binary options.

What do you guys think about binary options? is trading binary options similar to gambling?

Thank you!

It depends on the time frame and the amount of research conducted

Binary options

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