Strategies for binaries on the ftse hourlys

[IGeez]

Hi Folks,

Ya a newby to the board, great site and lots of useful info,
had a question which i hope can be answered :

Does anyone know of any simple strategy for trading the binaries on the hourlys for the FTSE?
Are there are any hourly trades which are better than others or are they all likely to get be burnt?

 

[Scripophilist]

There is an excellent article in shares magazine this week talking about how to trade the hourly binaries. Several charts and suggestions as well. Worth nipping in WH Smith to pick up a copy.

Hi Folks,

Ya a newby to the board, great site and lots of useful info,
had a question which i hope can be answered :

Does anyone know of any simple strategy for trading the binaries on the hourlys for the FTSE?
Are there are any hourly trades which are better than others or are they all likely to get be burnt?

 

[IGeez]

There is an excellent article in shares magazine this week talking about how to trade the hourly binaries. Several charts and suggestions as well. Worth nipping in WH Smith to pick up a copy.

Thanks Scripophilist I will defo have a look c
Cheers

 

[IGeez]

Thanks Scripophilist I will defo have a look c
Cheers

Scripophilist, I bought the mag and read the article it made sense however what I notice with the hourly binaries is that on occassion or basically when ever I enter a trade, the market reverses and the opposite position to mine settles at 100, this isnt really covered in the article since the author is advocating that if the index is trading up say 5 points then it has a very strong possibility of finishing up on the hour. Which is true some of the time and then other times it reverses with like 15minutes to go till close.

How can I hedge against this happening ? any suggestions appreciated..

 

[Scripophilist]

Unfortunately on the intras the market is always going to be volatile there is no way around that other than going for longer time periods (I.e. FTSE daily) If the market is efficient then in theory if you let losses run the two should balance out and you will only end up losing the commision on the succesful trade. I've used that tactic for a number of years and it has served me fine.

 

[IGeez]

Unfortunately on the intras the market is always going to be volatile there is no way around that other than going for longer time periods (I.e. FTSE daily) If the market is efficient then in theory if you let losses run the two should balance out and you will only end up losing the commision on the succesful trade. I've used that tactic for a number of years and it has served me fine.

Scripophilist, im having a senior moment
i dont get the "if you let losses run the two should balance out and you will only end up losing the commision on the succesful trade" , do you mean buying the binary ftse daily? or the binary hourly's? or neither? please elaborate...

 

[IGeez]

Scripophilist, im having a senior moment
i dont get the "if you let losses run the two should balance out and you will only end up losing the commision on the succesful trade" , do you mean buying the binary ftse daily? or the binary hourly's? or neither? please elaborate...

Hi Scripophilist, can you answer that one ? :arrowu:

 

[Scripophilist]

Hi,

"if you let losses run the two should balance out and you will only end up losing the commision on the succesful trade"

On Betfair if you make the assumption that the market is priced efficiently over time and if your money management is correct; winners and losers will balance out. When that happens you only actually lose your net commision (the only transaction cost on Betfair). I studied it many years ago and revisit it every six months or so and remarkably (or not) the odds are pretty close to the actually probability. Therefore if you have a positive expectancy on a strategy and can bear the winning and losing runs it all works out over time. That's pretty much what the bookmakers do.

 

[Greed Is Good]

I would also add a strong word of warning to that 5 points rule. Apply it only when the market is not volatile and there have been no sudden reversals or any market moving news/reports are due. Otherwise you can easily see those 5 tics go in the 15 mins.

Recently I have noticed some very suspicious looking reversals which look as though they have been timed to move the FTSE100 just before the hour. Some have been as much as 3-5 tics and the timing is such that it looks intentional. In the last 2 months I have seen several such events.

I suspect that the people who manage hedge funds have been playing the game as well because technically binaries are classified as bets.

Insider trading is probably a grey area as far as the law is concerned here and you would have to prove it which again would be very tough as the accused would only have to say they though that was a good time to sell due to market conditions etc etc. If you have a few friends in the industry and send coded messages to time your sell/buy actions together then that again is hard to prove. If I were in a position to I would be doing this as well!!

I have attached some recent charts with red circles around these areas. Most are natural moves 2 or 3 look a little iffy to me. All give you an idea as to how the FTSE can & does move around the hour. Anyone applying that 5 points rule in the attached examples may have suffered heavy losses in these instances so beware!!!

 

[Scripophilist]

Interesting stuff. There has been some talk on Betfair for ages about manipulation but I have struggled to see how on the volumes available on Betfair. Maybe IG or somebody is hedging an open position?

 

[Greed Is Good]

Interesting stuff. There has been some talk on Betfair for ages about manipulation but I have struggled to see how on the volumes available on Betfair. Maybe IG or somebody is hedging an open position?

I would not be surprised @ all. IG are linking their spreads to Dow Futures. I watch both very closely as I trade Binaries on the FTSE & DJI and they (Dow Futures) move exactly in relation to the FTSE spreads @ various points in the trading day (not always though so manual intervention as well). Its a damn good strategy on their part as you are time travelling to get yet another edge on the punters by controlling the market so you can build another tic or 2 into your pricing!! Not the whole story though as even though I do not save the daily charts with volume attached whenever there were sharp reversals which look dodgy it can be in the 5-10M plus range so probably some of the hedge funds as well.

I suspect that all Spread Betting Co's hedge most if not all of the money they get when the markets are open on whatever takes their fancy as its all held virtually until someone makes a withdrawal request from their account so they can do whatever they want with it most of the time as it is unlikely all their clients will withdraw @ once so that is another few million they have to play with...

Edited to say just noticed that the DJI futures are currently -156 as IBM have tanked!!!!!!!!!!!!! My tip for Friday is that the Dow may well go into meltdown mode as the last 2 days were already jittery. Triple figure decline looks very possible again. Some SB's let you trade the FTSE now & they do not monitor positions overnight so...................

 

[IGeez]

Greed is good,

Interesting post, I have actually been burnt by these moves or reversals quite a few times i take a position on the premise that it will finish up on the hour (binaries) and then only to find as soon as I have entered the market is movin in the opposite direction, and finishing down on the hour for example.

Is there any way to protect against such a move? or is it not worth trading the hourly binaries? particularly in light of what you said in your previous post?

 

[Greed Is Good]

Greed is good,

Interesting post, I have actually been burnt by these moves or reversals quite a few times i take a position on the premise that it will finish up on the hour (binaries) and then only to find as soon as I have entered the market is movin in the opposite direction, and finishing down on the hour for example.

Is there any way to protect against such a move? or is it not worth trading the hourly binaries? particularly in light of what you said in your previous post?

Watch it like a hawk for the entire hour & be ready to react and take a small loss by selling short if it turns suddenly.

Hourly's are very very high risk and certainly not for the faint hearted!! I have also been burnt a few times to the tune of high 4 figure amounts

Still do them when the time is right. Yesterday made some good money :cheesy:

This morning on the FTSE just before 9 there was a 20 point drop which seemed a little suss as the open usually leads to the heaviest reversal when Wall St is in bear mode....

If this was deliberate what it does is load the next hour binary by giving it a head start so recovery & reversal again are even harder.

The best way to trade binaries is with a bargepole as there is always a chance you will get burnt & wipeout any gains!!