binary strategy

[Mackdaddy1988]

Say your looking at the FTSE 100 hourly binary. Basically you act when there is no news being released to avoid big swings in the index, wait until the hour is close to finishing (i.e. 5-10 min to go) and buy the binary that is looking to be the right one at the close of the hour.

For example, at 11:00am the FTSE 100 was at 5700. Now at 11:55 the FTSE 100 is at 5710. The binary price for the FTSE to end higher for the hour will be around 97 or so. If you buy this chances are that at the end of the hour it will go to 100. If you invest an initial capital of $970 you will come out with a $30 profit in this case. Not much, but still a 3.1% return in one hour. Do this many times and you will build a nice bankroll. Now obviously this can be risky as indexes can move alot in the way of points very quickly, and you have a chance of losing $970 if the binary falls to 0, but to avoid this if things turn bad, then sell your binary and get out of it if the binary falls to around 80 (or lower if you have a higher risk tolerance). In this case you will lose $170.

So this strategy is designed to be a high percentage wining one, and one where you have to try and enter the market as close to the end time as possible, without the binary price reaching 100. So patience is needed. This wouldn't be for everyone as your risking a bit of money to get a small reward, but if you were confident of the index not having any big swings, then it can be profitable.

 

[scottb]

This strategy sounds terrible, I would urge people to avoid it like the plague. For one thing the spread is around 3. so half your profit always goes on the spread. Secondly..even if there is no scheduled news...an unexpected event, comment, downgrade, can cause a swing that would not let you exit at 80.. If you have actually done any research on this strategy to back it up, what %age come in?

 

[shadowninja]

I've seen this work before. It works best on low volatility instruments but I know someone who's raped the market with this strategy in the past.

 

[Mackdaddy1988]

I tried it on a practice account and was successful 16/16 times, doubling my account in a week, but scottb i know what your saying sometimes the market moves so quick its hard to get out of 80. I'm not promoting this in anyway and don't encourage anyone to use it. Just laying it out there as something I have tried. In a way its like going to the casino, you can have a great hot streak which i had with this strategy working 16 out of 16 attempts, but you can have that one case where something in the market turns everything horribly wrong!

With the spread problem, the way I used it was waiting until the hour was over so the price went to 100. I never sold the binary before the hour was over. Sometimes when using it it did get close to 80 but ended up working in the end

 

[shadowninja]

One issue I found was that towards the end of the session, you get locked out; the market could change direction just in that last 30 seconds and you could end up with it exiting at 0%. One way of countering this is to determine what absolute value of the change at the end of the period should be for the instrument to give you 95% and if it's much less than this then you don't take the trade (as a slight move could flip the binary below 50%).

 

[Mackdaddy1988]

yeah being locked out is one issue I didn't talk about. IG markets locks you out for the very last minute. The idea is seeing how many points in favour it is. The binary could be around 95 with 3 minutes to go but could only be 2 points lower or higher which could easily reverse in a number of seconds. So its really taking it case by case

 

[shadowninja]

Yeah, if you have a strict set of rules and stick to them, it is possible to make a serious amount of money. I would not leave it to become locked out and would also use a mental stop in case of a change at the last minute. I know someone who ran the same strategy and apparently made £300k+ doing it, starting from £1/pip and compounding (obviously). Apparently, wandering away from his computer found him in a position £15k offside. The recent-ish volatility ruined the system, however, so I am not sure he is doing it any more.

 

[Vandalay]

This is roughly the strategy I have been working on for the past 6 months, with good success.

I recorded prices on various binary markets on IG over a couple of months to work out the optimum strategy by building an algorithm in Excel. For FTSE it's something in the region of entering at 80after 2:30 pm on daily binarys and setting a stop of 60.

The difficulty is that IG do not allow you to set a stop on Binaries.. so you have to watch it pretty closely.

Success rate is around 80% on average, you do the math.