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Why Binary Forex Options are better than Spot Forex

  • #81
  • Jun 13, 2009 6:07pm Jun 13, 2009 6:07pm
TJPLD, thank you for this information. I've been trying to use IG but not at all "getting it" and the learning curve for me is like a vertical line.

Would you explain exactly what you do and how you trade the binaries on the Germany 30? Maybe it would be helpful to start a new thread?

Quoting Tjpld
Quite well actually. I mostly bet on the Germany 30 closing up or down.
Nothing fancy. Having completed the learning curve with spot forex I hope it won't take me as long to get profitable as it did in Spot FX. I try to avoid some mistakes I did when I tried to teach myself trading Forex.

@Dreamliner

Yes I'm a bit disappointed that Nadex (former Hedgestreet?) doesn't allow non-US citizens. So I'll probably go with IG Markets sooner or later.
What I like best is that i can get decent chartig of the underlying symbols of my binars. With HedgStreet...
  • #82
  • Jun 14, 2009 2:36am Jun 14, 2009 2:36am
Quoting Dreamliner
TJPLD, thank you for this information. I've been trying to use IG but not at all "getting it" and the learning curve for me is like a vertical line.

Would you explain exactly what you do and how you trade the binaries on the Germany 30? Maybe it would be helpful to start a new thread?
I'm far from being a pro at trading binars. Afterall I'm trading these things for only 1-2 weeks now.

First of all why do I trade the Germany30? I want to specialize in one symbol because knowing it's characteristics and volatility should be very important when determening if it going to close over or under a certain level.
You could use any other index or commoditie/share or whatever.

Why do i trade only (to close up/down) binarys? I find them the easiest to understand and to predict. There are alot more like XY to finish 0-30 Pts up or to stay in a certain range. When you trade the XY to close 0-15 Points up/down binary there are 2 cases where you lose money and one where you get money. If it closes 16 points up your money is gone if it closes 1 point down your money is gone aswell.

What I look for are basically 3 things.
Are there any news that might drive it up/down and make it to close lower/higer?
Is it trending up or down?
And most important. If it's already below it's open I look for strong resistance areas which will keep it from closing higher that day.
Also look for price action on the daily chart. The day after a pinbar is
likely to close in the opposite direction.

Support and Resistance will be your best friend I guess. Because you're not looking to pinpoint a price entry or try to pick bottoms or tops no Fancy Indicator system will help you here.
Not having to get in at the best price and hoping for a trend in your direction to sell higher is what I find quite refreshing. I had a position which had a floating P/L of minus 600 EUR 5 minutes before expiry but the price was allready "In the money". Eventhough the price did not move in the last 5 minutes I made quite some profit all of a sudden.
  • #83
  • Jun 14, 2009 2:45am Jun 14, 2009 2:45am
Signing up.

Lenoxer
  • #84
  • Jun 14, 2009 9:07am Jun 14, 2009 9:07am
Tjpld, Nice work. It’s good to hear your take on how to be profitable. I had a decent week too. Allow me to reveal a little of my own thoughts on binaries. My focus is on Eur/Usd.

I believe each trading session offers its own unique personality. By that I mean the London session behaves one way and the New York session behaves another way.

Keep in mind that I am a total greenhorn! But the Eur/Usd market seems to pick a direction during each session. London will open and the pair will move steadily up or steadily down. The same thing happens when New York opens. The pair, it seems to me, will begin to move in a certain direction.

Using simple support and resistance, I like to buy or sell the binary that is closest to “at the money”. I like the one that is closest to the 50 point range.

I will close the trade when I have a 20 to 30 point win or loss. In other words, if my timing was off or the market changes direction, 30 points is my limit. Likewise if I have a 30 point gain, I take it every time. Wednesday I took two winners like that. I was very happy. Friday I took a loser, so I stayed out of the market the rest of the day.

I’m no guru. No, sir! And I have a lot of work to do before I have anything even close to a trading plan. I only want to help inspire liquidity in this type of trading. It can be very powerful.

BTW, I also like to use binaries to hedge outright spot positions, but that really needs some work before I embarrass myself by talking about it.

Everyone, please keep your ideas coming. Don’t be shy.

siafx
  • #85
  • Jun 14, 2009 7:02pm Jun 14, 2009 7:02pm
Hi Yoda

Can you please confirm how the Monthly One Touch works as i have only been trading the Daily up/down Ladders.

At the moment one of the options on the Ladder for MOT for the EUR/USD is at 1.4500 and at the value of 30. If i select to SELL meaning that i don't think the EUR will hit 1.4500 and at the end of the expiration the EURO does not hit 1.4500 will i win ?

Cheers
--------------------------------------------------

A FULL TIME TRADER IS A NOVICE THAT NEVER QUIT
--------------------------------------------------
  • #86
  • Jun 14, 2009 9:43pm Jun 14, 2009 9:43pm
Quoting Levendi88
Hi Yoda

Can you please confirm how the Monthly One Touch works as i have only been trading the Daily up/down Ladders.

At the moment one of the options on the Ladder for MOT for the EUR/USD is at 1.4500 and at the value of 30. If i select to SELL meaning that i don't think the EUR will hit 1.4500 and at the end of the expiration the EURO does not hit 1.4500 will i win ?

Cheers
--------------------------------------------------

A FULL TIME TRADER IS A NOVICE THAT NEVER QUIT
--------------------------------------------------
I never traded MOT Binaries before, but based off of the logic of binaries the answer to your question is yes. When you sell a binary statement your betting against that statement, so if you sell a MOT, and it doesn't hit the MOT price, then you win. But keep in mind that if you're selling a binary with a value of $30 then you're risking $70 just to make $30.
Binary Options Trader
  • #87
  • Jun 14, 2009 10:37pm Jun 14, 2009 10:37pm
Has anyone tried the spread in these 2 platform?

They are same as normal spot forex?
  • #88
  • Jun 15, 2009 5:14am Jun 15, 2009 5:14am
Hi there,
As I mentioned before I use binaries for news trading on US open, when IG have about 7 hours to expiration. I buy cheap binary [about $10] just to sell them around $50, when price will have long run. I don't practise it a lot, I need to decided whether I buy bin both direction or just one before news. There is around 100 pips move needed for binary to be priced $50 so e.g. today I will not trade this way.
  • #89
  • Jun 15, 2009 9:54am Jun 15, 2009 9:54am
Today I recived news from IG - OT on daily GU and EU:

Quote
New! Daily FX OneTouches

We are pleased to offer two new Binary FX Daily OneTouch markets, based on Forex pairs EUR/USD and GBP/USD.

Our new markets allow you to trade on currency movements touching a certain level - between the euro and dollar, and sterling against the dollar - through the trading day from 08.00 until 20.00.

Like our existing Monthly FX OneTouches, these markets will settle at 100 based on Bloomberg's underlying prints reaching the necessary level. To access these markets, choose 'Binary FX' from the navigation menu and...

Might be doyable...
  • #90
  • Jun 15, 2009 11:11am Jun 15, 2009 11:11am
Quoting Kaligula
Today I recived news from IG - OT on daily GU and EU:



Might be doyable...
"Choose binary from the fx menu and..."

and what? I can't see anywhere to do this. Possibly they were talking about some future date?
  • #91
  • Jun 15, 2009 2:29pm Jun 15, 2009 2:29pm
Anyone know were to get charts for the germany 30, ftse 100, & korea 200? I was looking for free real time quotes. These are available on hedgestreet so i wanted to give them a try but i don't have any charts.
  • #92
  • Edited 3:11pm Jun 15, 2009 3:11pm | Edited 3:11pm
Ok guys, why not just select a binary that is heavily in the money, 15 minutes before market close (with IG this is 3:00 ET) and leverage as much as allowed, and take your profits? Yes, the risk reward ratio is horrible, but the trade is "practically guaranteed".

For instance, today I closed out 7 profitable trades that were all heavily in the money, hardly any way to lose on any of them, and made about 20 percent on the account.

I'm sure someone will say this is crazy, risk to reward will kill you eventually, but I'm not sure.

What are your thoughts?
  • #93
  • Jun 15, 2009 3:47pm Jun 15, 2009 3:47pm
Quoting Dreamliner
Ok guys, why not just select a binary that is heavily in the money, 15 minutes before market close (with IG this is 3:00 ET) and leverage as much as allowed, and take your profits? Yes, the risk reward ratio is horrible, but the trade is "practically guaranteed".

For instance, today I closed out 7 profitable trades that were all heavily in the money, hardly any way to lose on any of them, and made about 20 percent on the account.

I'm sure someone will say this is crazy, risk to reward will kill you eventually, but I'm not sure.

What are...
Risk and Reward are not always black and white. For example, you might be risking a lot, but if your trading method has a low proabibility of failure, and you double a tiny bit of money....why not? I wouldn't do it though lol

I think you know the answer though, risking a lot to gain a little can never work in the long run.
Binary Options Trader
  • #94
  • Jun 15, 2009 3:51pm Jun 15, 2009 3:51pm
I can't wait till Hedgestreet updates their platform. The refresh button approach to your positions and open orders is simply horrible. I have actually screwed up a couple of my orders because the data was not automatically updated....and I forgot to refresh.
Binary Options Trader
  • #95
  • Jun 15, 2009 3:57pm Jun 15, 2009 3:57pm
Quoting Dreamliner
Ok guys, why not just select a binary that is heavily in the money, 15 minutes before market close (with IG this is 3:00 ET) and leverage as much as allowed, and take your profits? Yes, the risk reward ratio is horrible, but the trade is "practically guaranteed".

For instance, today I closed out 7 profitable trades that were all heavily in the money, hardly any way to lose on any of them, and made about 20 percent on the account.

I'm sure someone will say this is crazy, risk to reward will kill you eventually, but I'm not sure.

What are...
I did that several times. Bought them at around 90 most of the time.
I managed to triple my account. I found it easier than overleveraging a forex account and just go for it. When you do that on a Spot FX account you'll get margin called pretty quick. On my binary I just had to wait untill my floating loss turned into 15.000 USD Profit on expiry.

Still not very professional.

@ferndog

Get yourself an IG Markets demo. I just added those indicies to my Watchlist and have them available at all time.
They have Quick Charts and Professional Charts with Multiple timeframes.
  • #96
  • Jun 15, 2009 4:09pm Jun 15, 2009 4:09pm
Quoting Tjpld
I did that several times. Bought them at around 90 most of the time.
I managed to triple my account. I found it easier than overleveraging a forex account and just go for it. When you do that on a Spot FX account you'll get margin called pretty quick. On my binary I just had to wait untill my floating loss turned into 15.000 USD Profit on expiry.

Still not very professional.

@ferndog

Get yourself an IG Markets demo. I just added those indicies to my Watchlist and have them available at all time.
They have Quick Charts and Professional Charts...

Hi Tjpld,
Could I ask you to explain the above again for me please. I wish to clarify my take on things. During a normal hour in the day if you bought at 90 and the close at the end of the hour was 88 you would lose 90, is this correct? So when you buy with 15 mins to go to close for day at 90 even if the price closes at 88 it is above 50 so is deemed as a winner for you. Have I got it right? I am thinking you make profit on 50 instead of profit on 10.
Hope that makes sense.
Thanks.
Andy
  • #97
  • Jun 15, 2009 5:29pm Jun 15, 2009 5:29pm
Quoting andypips
Hi Tjpld,
Could I ask you to explain the above again for me please. I wish to clarify my take on things. During a normal hour in the day if you bought at 90 and the close at the end of the hour was 88 you would lose 90, is this correct? So when you buy with 15 mins to go to close for day at 90 even if the price closes at 88 it is above 50 so is deemed as a winner for you. Have I got it right? I am thinking you make profit on 50 instead of profit on 10.
Hope that makes sense.
Thanks.
Andy
No you're making it to complicated.

Let's asume.
The bet is about the FTSE100 to close above 1080 (made this up).

The Option expires at 17:30 for example.
It is 17:15 and the current price is 1090 so if it stays at that price till expiry you have won the bet and you get 100 USD per contract.
Once your option has expired you will ALWAYS get 100 Dollars if you are right and 0 Dollars if you are wrong.

Because it is very likely that the option will end "In the Money" it is priced at ~90 (the higher the probability for the outcome the higher the price. If price was at 1200 you would not be able to buy the option under 100 Dollars. ) So you paid 90 for the contract and get 100 if you end up being right about your prediction that FTSE will be above 1080 at 17:30. You made 10 USD per contract. If it closes below 1080 you lose your bet and the 90 USD you paid for the option. So Risk Reward is pretty bad in that case.
  • #98
  • Jun 15, 2009 5:32pm Jun 15, 2009 5:32pm
If you bought at around 90, how many minutes was that before expiry?

Quoting Tjpld
I did that...
  • #99
  • Jun 15, 2009 5:33pm Jun 15, 2009 5:33pm
15 Minutes .. It seems like there is still a good possibilty that
it won't turn ou as predicted so it's not priced at 100 allready.
Price was hovering above the strike price at that time.
  • #100
  • Jun 15, 2009 6:10pm Jun 15, 2009 6:10pm
Tjpld i got the IG demo but i couldn't find charts for ftse 100, dax 30 or the korea chart i was looking for. So i called them & they said since they don't offer trading on those markets they don't have those charts. At least the charts they offer are good. I have an ODL chart with the dax but it's a few points off. So i couldn't get those charts.
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