Why Binary Forex Options are better than Spot Forex | Page 9 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Nadex trading binary options, you better be losing money on that 3 replies

Multi Time Frame Analysis for Spot and Binary Options 457 replies

Rekon Xs and Market Scanner for Spot and Binary Options 442 replies

Spot Forex vs CFD Forex: Are we really trading Spot? 11 replies

show me one advantage of binary options over spot forex 16 replies

Attachments: Why Binary Forex Options are better than Spot Forex
Exit Attachments

Why Binary Forex Options are better than Spot Forex

  • #161
  • Edited 4:50am Jun 17, 2009 4:31am | Edited 4:50am
I notice on Nadex you can pick your price for any buy or sell (haven't seen it on IG though) and it will sit as a working order until that price is reached. Can you buy and sell an option with the same strike or will one cancel the other? Example: say EU is at 1,3814 and you buy a cheap option at about 20-30 with a strike of 1,3920, you expect price to go up and then sell the same strike when the price reaches 70-80. Is this possible or will it close at 40-60 profit? I haven't tried it but probably not. If you somehow can keep both open... no way to loose money wherever the market goes. But I doubt it. Doing strikes of 20pip gap perhaps is the way and if the price expires in that range then you loose both sides. (Considering both got filled). Anybody tried any of this? But then again if you know which way the market is going then buy or sell in that direction and take your profit before expiration, before it turns against you. mmm... Just thinking out loud...
  • #162
  • Jun 17, 2009 7:51am Jun 17, 2009 7:51am
I don't think any trading instrument is ever good for martingaling; if you don't have a system of profiting from the market, martingaling won't help you, it will blow your account. I've had it happen several times, before I started listening to the warnings of other people: don't martingale!

Quoting geminicz
Dreamliner wrote:

I noticed that on the IG platform, demo is much different than live. I was demoing until yesterday and at roughly 15 minutes before close there were lots of options to choose from all between 80-90. Today on the live, there were only a few to choose from, and the best I could find was 97.5. So I risked 100 to make 2.5 and won. Increased m account size my 2.5%.

Obviously not a good long term strategy, as just one loss will wipe out all wins. Not sure what to do now, maybe I'll play it until I get plus 10% in the account and then...
  • #163
  • Jun 17, 2009 8:38am Jun 17, 2009 8:38am
@ Dreamliner:

I never traded monthly one touch’s before, not even on demo, but I will try to help you with understanding it.
Just think of it this way…if it helps….
We sell a binary contract when we think that an outcome wont happen, and we buy a binary contract when we think an outcome will happen. Or think of it this way….if you think the price of the EUR/USD is headed north then you will be looking to BUY (ASK) binary contracts that allow you to get in at the price that you want. If you think the EUR/USD is headed south, then you want to SELL (BID) binary contracts that allow you to get in at a good price as well. If you’re hedging, then you can only go wrong when the price of the pair falls in between your two strike prices.

In a monthly one touch scenario, I would imagine that if the price doesn’t touch a strike price that you sell, then you win, and the opposite for a buy.
But I have to be honest...I am not too sure what you are confused about...you can break it down for me another way?
Binary Options Trader
  • #164
  • Jun 17, 2009 9:30am Jun 17, 2009 9:30am
Quoting Dreamliner
I don't think any trading instrument is ever good for martingaling; if you don't have a system of profiting from the market, martingaling won't help you, it will blow your account. I've had it happen several times, before I started listening to the warnings of other people: don't martingale!

Yes, of course, martingale is fastest way to blow account. But classic martingale schema works with risk/reward 1:1, in this situation you work with ratio 1:15, risk is very small. I thought martingalin only concrete situationm, for example as you described ( 15 pips plus, 15 min before expiry ).

I trade spot fx, but binaries are interesting, i try it. Other broker for binaries - Choiceodds.
  • #165
  • Jun 17, 2009 11:07am Jun 17, 2009 11:07am
Thanks Yoda,

Yes, I do understand the theory of what you are saying, what I don't understand is the implementation of it. For instance, if you were to try to do what you have outlined below on IG Markets I think you would discover the problem.

If you have a demo, please try to do that, and you'll see the problem.

Quoting Yoda_Glenn
[font=Times New Roman]@ Dreamliner:...
  • #166
  • Jun 17, 2009 2:19pm Jun 17, 2009 2:19pm
OK, I've been live trading this for 3 days now, just starting with a tiny balance of $250.00 and my account balance as of right now is $312.32. That's 25% in 3 days.

However, as I've mentioned several times, this is probably not a good long-term trading plan, as the risk to reward is not good.

Here is what I am doing. I wait for their market to open at 4:55 PM EST. I then look at the "One Touch Daily" currency that is deepest in the money. I check the daily range of that pair and make sure that the market should not be able to reach the one-touch price in a day, and I enter that order. Then I either let it close in profit, or I close early if there is enough profit to do so.

Secondly, I have been using the "daily ladders" to enter a trade 15 minutes before market closes.

Everything I do is based off of support/resistance and daily range.

Again I am in a quandary because the risk to reward is so bad, but of course the hit rate is very high. I'm sure some experienced traders would say this is an accident waiting to happen.

Thoughts?
  • #167
  • Jun 17, 2009 3:00pm Jun 17, 2009 3:00pm
Nice return. How many contract per day to reach that %? If too many % of the account, 1 lose will bring many many wins back.
  • #168
  • Jun 17, 2009 3:13pm Jun 17, 2009 3:13pm
Quoting MoreYummy
Nice return. How many contract per day to reach that %? If too many % of the account, 1 lose will bring many many wins back.
Yes, that's true.

I've been using 2 contracts with my account size.
  • #169
  • Jun 17, 2009 3:30pm Jun 17, 2009 3:30pm
actually im doing the same thing, but very carefully.

Also in the IG's platform, is there a way to set take profit limit for opened order?
  • #170
  • Jun 17, 2009 3:40pm Jun 17, 2009 3:40pm
Quoting MoreYummy
actually im doing the same thing, but very carefully.

Also in the IG's platform, is there a way to set take profit limit for opened order?
I don't believe there is a way to set a take profit or stop loss on binaries, I think there is for spot.
  • #171
  • Jun 17, 2009 3:48pm Jun 17, 2009 3:48pm
Whatever is working keep on doing it. A profit is a profit. Just stay away from those losses if you know what i mean.
  • #172
  • Jun 17, 2009 3:49pm Jun 17, 2009 3:49pm
Quoting ferndog
Whatever is working keep on doing it. A profit is a profit. Just stay away from those losses if you know what i mean.
If only it were that easy .
  • #173
  • Jun 17, 2009 4:28pm Jun 17, 2009 4:28pm
Thought I would give you my trade for today, to close tomorrow at 3:00 PM ET.

I bought 3 contracts EUR/USD to open, price to be above 1.3800. Price right now is 1.3950 (150 pips above) and average daily range is 105 pips.

I bought this at 89.7 which means profit potential, if allowed to close in the money is $30.9, nearly 10 percent of my account. If losing, I'll lose $270.00.

The reason I selected this trade is because EUR/USD is in an uptrend, trendlines are about 10% up. So I'm trading with the trend. If the market drops I'm covered well past the daily range (though it's not uncommon for it to drop several hundred or more).

So I profit if the trend continues and market goes up. I profit if the market goes sideways. I profit if the market goes down, even well past it's daily range.

The thing I don't like is the risk reward. Ouch! But the hit rate is good, for sure.
  • #174
  • Jun 17, 2009 5:49pm Jun 17, 2009 5:49pm
After you double your acct just try to stay away from consecutive losses. Because one loss you can handle but b2b losses will hurt. I know it's not easy but just try to stay on track when that happens. But maybe it won't happen for a while.
  • #175
  • Jun 17, 2009 6:49pm Jun 17, 2009 6:49pm
Quoting Dreamliner
I bought this at 89.7 which means profit potential, if allowed to close in the money is $30.9, nearly 10 percent of my account. If losing, I'll lose $270.00.
I suggest setting a price target where you will close the trade before it reaches the strike price.

By the way, I booked a decent trade on the Eur/Usd binary today. I bought “to be above” 1.3860 for about 56 points last night. My total risk was 56 dollars. It closed at 100. Me happy…
  • #176
  • Jun 17, 2009 10:08pm Jun 17, 2009 10:08pm
Quoting Dreamliner
Thought I would give you my trade for today, to close tomorrow at 3:00 PM ET.

I bought 3 contracts EUR/USD to open, price to be above 1.3800. Price right now is 1.3950 (150 pips above) and average daily range is 105 pips.

I bought this at 89.7 which means profit potential, if allowed to close in the money is $30.9, nearly 10 percent of my account. If losing, I'll lose $270.00.

The reason I selected this trade is because EUR/USD is in an uptrend, trendlines are about 10% up. So I'm trading with the trend. If the market drops I'm covered well...
My advise to you is to simply double your money like this and then transfer it into your bank account. Wash, rinse, repeat and only use a small amount of money.
Binary Options Trader
  • #177
  • Jun 17, 2009 10:20pm Jun 17, 2009 10:20pm
Quoting Yoda_Glenn
My advise to you is to simply double your money like this and then transfer it into your bank account. Wash, rinse, repeat and only use a small amount of money.
Yep, my plan 'zactly!
  • #178
  • Jun 17, 2009 10:26pm Jun 17, 2009 10:26pm
Hey guys, I'm enjoying this thread. I just opened demo accounts with both Hedgestreet and IG and just playing around right now learning how everything works. One question, does it seem like IG is superior to Hedgestreet? I mean in the amount of things to trade and the ability to close a position before expiry. Did I miss something with Hedgestreet? Are you able to close a position before expiry? Seems like that would be pretty important. Keep it going guys.
  • #179
  • Jun 18, 2009 1:37am Jun 18, 2009 1:37am
@ The Dirty Serb:

 >>One question, does it seem like IG is superior to Hedgestreet?<<
Technically, aesthetically, and in terms of hours of operation + liquidity, probably.
>>I mean in the amount of things to trade and the ability to close a position before expiry.<<
IG Markets doesn’t have weekly binaries in order to place a weekly hedge. There are also some other financial markets that Hedgestreet binaries are based on that IG Markets just does not have.

>>Did I miss something with Hedgestreet?<<
Yes you did, OPEN ORDERS. IG Markets does not allow Open Orders, so therefore if you want to get in and out of a binary, before expiry, you must man your computer (watch the binary exchange) at all times to do so with IG Markets. With Hedgestreet you can place an open order and forget about having to sell (or buy) your binary before it expires.
>>Are you able to close a position before expiry?<<
Yes, all binaries work this way.
Binary Options Trader
  • #180
  • Jun 18, 2009 6:34am Jun 18, 2009 6:34am
Thanks Yoda

Like I said I'm still learning the benefits of both accounts.

Just to share... I have an open daily position for EU to be above 3900. Since we are in an uptrend and this seems to be a decent support area. Lets see what happens, like I said just testing things out.
0 traders viewing now