«Have you used your strategy for spotfx?»
The truth is I haven’t. I am sure some people out there have used it and I’ d love to find how they are doing (I will eventually get to it though –I promise).The reason I am not using it is that the system I trade binaries with is not specifically designed for spotfx. Price speculation ok ,but system speculation?Not if I can avoid it.
Since we are on the subject of spotfx system specifications and since this is still a binary trading blog ,I just have to touch on the sensitive «binaries vs forex» subject .Putting aside spotfx’s longer history and of course the extensive lore that comes with it ,spotfx proponents have always raved about the risk management tools that traditional forex trading offers.They’ re supposed to bring more choice and more freedom to the trader. The “elbow room” offered by these tools eventually protects him from bad trades (or worse luck) resulting in far greater profits compared to binaries.
That is of course in a perfect -fair broker practices -world (otherwise we are turning this into a purely theoretical post).There is of course the infamous 28 ways they rig the market article which you may read at your own peril. I still am of the opinion –and maybe now you are too-that spotfx traders will always risk too much compared to binary traders. Spot fx can easily sneak up on you. Yes ,being profitable in binaries is much harder work but if trading binaries is like climbing a steep unhospitable mountain ,spot fx is like climbing a gentle slope –made of thin ice.
On the other hand old school traders could of course argue that putting binaries next to spotfx is like comparing mini soccer to the «real thing» – oh and with those tiny goal posts magically changing positions all the time .Implying that binary traders are something between a trading toddler and an easy mark. But when all is said and done anyone who makes money doesn’t care about all this (you can stop reading any time now).
Still here? Great .More similes and metaphors ahead (a picture speaks a thousand words after all).Have you laid eyes upon the legendary Temple of Forex? Neither have I.
When the aspiring trader enters the Temple of Forex he must face two ancient guardians.Each one of these monsters –sphinxes they are called – will present him/her with a challenge .Two enigmas separating the visitor from the Holy of Holies.From these two riddles ,the first one remains the same for both binary traders and spotfx traders :
Direction of market
Many people consider this to be enough for successful binary trading even spot fx but I am afraid that determining direction alone is only half the battle.Because it is the second question that actually defines the difference between spot forex and binaries and may well be the deciding factor between profit and loss.
For binaries it is the Duration of Price movement
For spot forex it is the Cost of Price movement .That is the pips you may lose in order for price to reach a certain level .A mathematical expression of that is the StopLoss/TakeProfit ratio -or SL2TP -for each trade.That is really an attempt at measuring or determining the so called “whip motion” of the price that many traders experience often with devastating effects to their account.You see there is fuel economy and then there is pip economy.
If experienced binary traders are able to determine the Duration factor ,seasoned spot forex traders are able to do the same with the Cost factor -their «order mileage» so to speak. They can go about it a thousand ways but essentially this is what they are doing. And yes I do believe that both abilities are acquired (bots ,microwaves and inside traders have absolutely nothing to do with this article) .Now many people (rush to) mix the two factors but again they are not the same. As I have observed countless times chartgazing ,a suitable duration may yield insignifigant profits/pips.An unsuitable duration may cost you months of accumulated profits.
Between the two factors calculating SL2TP is definitely a more complex task for any trader (and the human brain that is).Hence the 90% of forex traders that fail -a percentage that I also consider optimistic as well.Hence my long standing distrust to spotfx although that doen’t mean that I ever gave it up.On the contrary I love challenges and of course enigmas.Years ago I was presented with another interesting one:It was suggested to me that in reality the 3 questions presented by the sphinxes are actually one and the same .It is just a matter of posing a more complex question to the same answer really-a nasty trick complicated minds sometimes play to themselves.
Lately I have arrived to the same conclusion.For me spot forex and binary trading have become less about the Duration and Cost factors that characterize each .They have become about something else.I believe you will find that although the term used is different ,the meaning ,the essence is very relevant:
Timing
But what does understanding market «Timing» really mean? One could argue that risk management tools are in fact about timing .Their sole goal is capturing ,arresting if you’d like-and what an interesting word that is- a fleeting moment much like a camera does (the moment could be an hour or a month depending on your trading patterns).But as a trader sharpens his understanding of timing wouldn’t he be in a position to rely on it to a greater extent ?Couldn’t he arrive to a point where he would not in fact need tp/sl orders to “secure” a profit –for he would have learnt to to recognize those (almost) inescapable market outcomes and not just act but wholeheartedly rely on them . Much like a traveler to a tropical island in contrast to the passing tourist who is frantically taking pictures of everything he sees .The traveler knows he has all the time in the world for his perfect shots.Or maybe he doesn’t even feel the need to take pictures since he is actually surrounded by his dream ,he is living it to his pores.
If there was indeed a deeper level of understanding regarding trading (not just forex) ,an immersion so complete that the trader became the trade much like a dancer becomes the dance or a racing driver gets «in the zone» ,who would we find standing at the center of the Holy of Holies?How would its mysterious High Priest be like?
Maybe just like a free man. Trading like Angels might…….
TO BE CONTINUED
The truth is I haven’t. I am sure some people out there have used it and I’ d love to find how they are doing (I will eventually get to it though –I promise).The reason I am not using it is that the system I trade binaries with is not specifically designed for spotfx. Price speculation ok ,but system speculation?Not if I can avoid it.
Since we are on the subject of spotfx system specifications and since this is still a binary trading blog ,I just have to touch on the sensitive «binaries vs forex» subject .Putting aside spotfx’s longer history and of course the extensive lore that comes with it ,spotfx proponents have always raved about the risk management tools that traditional forex trading offers.They’ re supposed to bring more choice and more freedom to the trader. The “elbow room” offered by these tools eventually protects him from bad trades (or worse luck) resulting in far greater profits compared to binaries.
That is of course in a perfect -fair broker practices -world (otherwise we are turning this into a purely theoretical post).There is of course the infamous 28 ways they rig the market article which you may read at your own peril. I still am of the opinion –and maybe now you are too-that spotfx traders will always risk too much compared to binary traders. Spot fx can easily sneak up on you. Yes ,being profitable in binaries is much harder work but if trading binaries is like climbing a steep unhospitable mountain ,spot fx is like climbing a gentle slope –made of thin ice.
On the other hand old school traders could of course argue that putting binaries next to spotfx is like comparing mini soccer to the «real thing» – oh and with those tiny goal posts magically changing positions all the time .Implying that binary traders are something between a trading toddler and an easy mark. But when all is said and done anyone who makes money doesn’t care about all this (you can stop reading any time now).
Still here? Great .More similes and metaphors ahead (a picture speaks a thousand words after all).Have you laid eyes upon the legendary Temple of Forex? Neither have I.
When the aspiring trader enters the Temple of Forex he must face two ancient guardians.Each one of these monsters –sphinxes they are called – will present him/her with a challenge .Two enigmas separating the visitor from the Holy of Holies.From these two riddles ,the first one remains the same for both binary traders and spotfx traders :
Direction of market
Many people consider this to be enough for successful binary trading even spot fx but I am afraid that determining direction alone is only half the battle.Because it is the second question that actually defines the difference between spot forex and binaries and may well be the deciding factor between profit and loss.
For binaries it is the Duration of Price movement
For spot forex it is the Cost of Price movement .That is the pips you may lose in order for price to reach a certain level .A mathematical expression of that is the StopLoss/TakeProfit ratio -or SL2TP -for each trade.That is really an attempt at measuring or determining the so called “whip motion” of the price that many traders experience often with devastating effects to their account.You see there is fuel economy and then there is pip economy.
If experienced binary traders are able to determine the Duration factor ,seasoned spot forex traders are able to do the same with the Cost factor -their «order mileage» so to speak. They can go about it a thousand ways but essentially this is what they are doing. And yes I do believe that both abilities are acquired (bots ,microwaves and inside traders have absolutely nothing to do with this article) .Now many people (rush to) mix the two factors but again they are not the same. As I have observed countless times chartgazing ,a suitable duration may yield insignifigant profits/pips.An unsuitable duration may cost you months of accumulated profits.
Between the two factors calculating SL2TP is definitely a more complex task for any trader (and the human brain that is).Hence the 90% of forex traders that fail -a percentage that I also consider optimistic as well.Hence my long standing distrust to spotfx although that doen’t mean that I ever gave it up.On the contrary I love challenges and of course enigmas.Years ago I was presented with another interesting one:It was suggested to me that in reality the 3 questions presented by the sphinxes are actually one and the same .It is just a matter of posing a more complex question to the same answer really-a nasty trick complicated minds sometimes play to themselves.
Lately I have arrived to the same conclusion.For me spot forex and binary trading have become less about the Duration and Cost factors that characterize each .They have become about something else.I believe you will find that although the term used is different ,the meaning ,the essence is very relevant:
Timing
But what does understanding market «Timing» really mean? One could argue that risk management tools are in fact about timing .Their sole goal is capturing ,arresting if you’d like-and what an interesting word that is- a fleeting moment much like a camera does (the moment could be an hour or a month depending on your trading patterns).But as a trader sharpens his understanding of timing wouldn’t he be in a position to rely on it to a greater extent ?Couldn’t he arrive to a point where he would not in fact need tp/sl orders to “secure” a profit –for he would have learnt to to recognize those (almost) inescapable market outcomes and not just act but wholeheartedly rely on them . Much like a traveler to a tropical island in contrast to the passing tourist who is frantically taking pictures of everything he sees .The traveler knows he has all the time in the world for his perfect shots.Or maybe he doesn’t even feel the need to take pictures since he is actually surrounded by his dream ,he is living it to his pores.
If there was indeed a deeper level of understanding regarding trading (not just forex) ,an immersion so complete that the trader became the trade much like a dancer becomes the dance or a racing driver gets «in the zone» ,who would we find standing at the center of the Holy of Holies?How would its mysterious High Priest be like?
Maybe just like a free man. Trading like Angels might…….
TO BE CONTINUED