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5% every 24 hours using set and forget - £200 into £1797!

  • #21
  • May 4, 2012 7:13am May 4, 2012 7:13am
Quoting guess121
It sort of makes sense and it does not make sense....

I have been looking at this similar method and am not far of cracking this... the problem you have here, you could lose both your bets... and the other issue you have here if you lose your BOM the market trade, the hedge might not even pay off enough to cover your losses.
What is the method you are looking at?

Yep that is the main risk. However the whole point of them giving you such a low return on your stake is that it is improbable that the level will be hit... like any other strategy it can never be perfect its all about stacking the odds in your favour, so choosing pairs that have no major news out to increase the odds of lower volatility, hedging if neccessary to decrease your overall loss if the trade goes against you. There is always the chance that the level will be hit but hey only risk what you can lose!

so far i have only had to hedge 3 times out of 45, the level is that far away... my prefered pairs are Eur/GBP or Usd/CAD, fundamentally the volatility should be lower since Britain/Eurozone should move similarly, and same with US and Canadian.

Hope that helps, and very interested to hear your strategy!
  • #22
  • May 4, 2012 7:22am May 4, 2012 7:22am
Ok great, I understand what you are saying with this, can you post an example of how you have traded and how you have placed your hedge... on a screenshot?

The opposite to you... the BOM is my hedge and then the Spread, would be my main trade.

My BOM has a fixed loss/win and my spread has a fixed loss (the loss of my BOM trade)/win(would hoping to be more than my BOM trade)

Quoting bjn201
What is the method you are looking at?

Yep that is the main risk. However the whole point of them giving you such a low return on your stake is that it is improbable that the level will be hit... like any other strategy it can never be perfect its all about stacking the odds in your favour, so choosing pairs that have no major news out to increase the odds of lower volatility, hedging if neccessary to decrease your overall loss if the trade goes against you. There is always the chance that the level will be hit but hey only risk what you can...
  • #23
  • Edited 8:58am May 4, 2012 8:36am | Edited 8:58am
Quoting guess121
Ok great, I understand what you are saying with this, can you post an example of how you have traded and how you have placed your hedge... on a screenshot?

The opposite to you... the BOM is my hedge and then the Spread, would be my main trade.

My BOM has a fixed loss/win and my spread has a fixed loss (the loss of my BOM trade)/win(would hoping to be more than my BOM trade)
I am in the middle of my final year University exams (I am based in the UK) so you may be replying sporadically.

Your strategy sounds interesting, you theoretically should be 100% hedged then? at least you should have less probability of a large loss. However the main trade is trading? the only problem I see there is that my ability to predict the market direction/not get stopped out etc is not as good as making the low volatility play...

it depends what your edge is really, how do you decide which direction to trade on your main? also i am assuming that your BOM is a touch bet?

so as i see it you will: Go long trading with x stoploss, set a touch bet below entry level such that it wins x? Also what platform do you use for your main trade? BOM/SB/Broker?

The more and more I research on FF and into forex in general the less I believe i personally can make money trading... hence the strategy i have developed here that removes that side of it, only when neccessary to hedge!

Abit of background: I am doing Economics at Exeter Uni, started off (as always) scalping the 1 min/5min to no avail, searching for high probability strategies here, finally decided that there are too many variables to consider plus I dont have time (the 3 years full time trading or so they reckon to become profitable).

However of course there are many profitable traders out there and I am sure you are one of them however I personally doubt my own skill!

Ben
  • #24
  • May 4, 2012 8:57am May 4, 2012 8:57am
I dont exactly know how to do the screenshots but here is my attempt at it.

This is the USD/CAD over the last week or so, you need the scale so see exactly how far away my level was.

1. The horizontal red line is the No touch level; if the price hit this i would lose my £500.

2. I purchased the no touch bet at the time roughly by the ~Vertical red line

3. As you can see the price moved again me. I got nervous. the blue box shows where i traded long;
The top of the box where I entered the long trade, the lower edge of the box where I was stopped out.
I entered here because it was just after significant resistance (as you can see my the chart) so price could of rebounded upwards sharply. luckily it did not.

4. this position I managed to make around £20: I took more risk than usual, the bet paid out out 10% of my 500 = 50, my stop value was £-30, so overall profit £20. (or 4% return)

5. The level was not hit and price did not even get close. This is typical, I dont want price to go anywhere near my level, just get my 5%, and rinse and repeat.

Hope that helps

Ben
Attached Image (click to enlarge)
Click to Enlarge Name: y.gif Size: 28 KB
  • #25
  • May 4, 2012 9:51am May 4, 2012 9:51am
No worries Ben...

I am work and doing the same, I cannot reply all the time... profitable, well no... but am looking at the markets in a different fashion now, as I do not have time to baby sit trades and like you I need a system where I can rinse and repeat, though the problem I is spending time looking into something... I like the no touch idea but a bit more thought for me needs to be put into it... I'm probably overlooking this too much!

though your risk/reward (if you hit a losing streak) will not be good, as if you get a double loss on your trades you will wipe out a big chunk of your profits and your capital will dwindle.

yes... so my idea, I am looking to always hedge to keep my loss to a minimum, as I am prepared to lose my BOM trade, why if is fixed both ways... though if I get news... bang I could get big on the spread trade - I use Alpari as my broker.

Quoting bjn201
I am in the middle of my final year University exams (I am based in the UK) so you may be replying sporadically.

Your strategy sounds interesting, you theoretically should be 100% hedged then? at least you should have less probability of a large loss. However the main trade is trading? the only problem I see there is that my ability to predict the market direction/not get stopped out etc is not as good as making the low volatility play...

it depends what your edge is really, how do you decide which direction to trade on your main? also i...
  • #26
  • May 4, 2012 10:01am May 4, 2012 10:01am
Quoting guess121
No worries Ben...

I am work and doing the same, I cannot reply all the time... profitable, well no... but am looking at the markets in a different fashion now, as I do not have time to baby sit trades and like you I need a system where I can rinse and repeat, though the problem I is spending time looking into something... I like the no touch idea but a bit more thought for me needs to be put into it... I'm probably overlooking this too much!

though your risk/reward (if you hit a losing streak) will not be good, as if you get a double loss...

Yeah thats the problem with my strategy is that the hedging system doesnt work perfectly, so if i lose i will probably lose big... however until the time comes when my level is actually hit (the death trade!) i will continue to enjoy the 5%... In the the title I said that I turned £200 into £1797, well I know had the idea to protect some of my winning is to start again, so what I will be doing is attempting to make £500 at a time (starting with £500):

So start £500, 5% every trade: assuming I win/no hedge needed: then after 14 sessions i would have made roughly £1000 (using compounding). then withdraw £500 and start again. this way i actually keep some of my winnings and do not subject them to the "death trade"

As always money management is king, FF never lets me forget it!
  • #27
  • May 4, 2012 10:11am May 4, 2012 10:11am
Well ! I would like to share with you all here.This strategy i used to do it for my past trading time. And apparently i earn a lot money with just little capital because by using the leverage in reasonable way. Unfortunately, i blow my trading account one day because did not use proper money management rules. I brought in the position with several positions but all positions turn into losing trades due to sudden increase of market volatility. And volatility index surge to high level during European Sovereign debt crisis.
  • #28
  • May 4, 2012 10:40am May 4, 2012 10:40am
Don't withdraw money... keep compounding!

Quoting bjn201
Yeah thats the problem with my strategy is that the hedging system doesnt work perfectly, so if i lose i will probably lose big... however until the time comes when my level is actually hit (the death trade!) i will continue to enjoy the 5%... In the the title I said that I turned £200 into £1797, well I know had the idea to protect some of my winning is to start again, so what I will be doing is attempting to make £500 at a time (starting with £500):

So start £500, 5% every trade: assuming I win/no hedge needed: then after 14 sessions i would...
  • #29
  • May 4, 2012 10:43am May 4, 2012 10:43am
Quoting Fx2ProTrader
Well ! I would like to share with you all here.This strategy i used to do it for my past trading time. And apparently i earn a lot money with just little capital because by using the leverage in reasonable way. Unfortunately, i blow my trading account one day because did not use proper money management rules. I brought in the position with several positions but all positions turn into losing trades due to sudden increase of market volatility. And volatility index surge to high level during European Sovereign debt crisis.
Im sorry to hear that FxPro.

Did you use BOM? and yes there is always the possibility of loss, whatever your system.
Of course you cannot always perfectly predict market volatility, the best you can do is put the odds in your favour by not making a play on a pair that has major news on that day (e.g. No USD pair if NFP coming out), however of course you cannot always get it right.

Were you hedging at all? also what pairs did you trade?

Hopefully we can build a better system together.

Ben
  • #30
  • May 4, 2012 11:59am May 4, 2012 11:59am
Hi Ben!

I used other broker to trade this binary instead of BOM. I did hedge my position when the move goes against my trades. I would like share my past experience here. And please enlighten me if i did some mistake for my trading method.

My broker provide the binary such as touch/rise or fall/above or below/range and tunnel. I used to trade weekly EURUSD with 2 position direction, Long & Short (Upward & downward direction). The risk to rewards ratio is 1:3. So after i have opened my binary position, i will set 2 hedging position for the upward & downward direction,so it will be auto triggered if move goes against my trades. So for the 2 hedging position, i set stop loss & target after i have done some calculation for the required earning & losing.

Example: (For upward direction only)
I bought binary close above price x + set an reversal order for hedging
Hedging order will only be triggered if price moves above or pass-by price x

3 outcome here:
1. Win the binary trade and trigger hedging order. I earn.
2. Lose the binary trade and trigger hedging order. I earn.
3. Lose the binary trade and do not trigger hedging order. I lose.
The earning is after i have done some calculation between the distant from binary price to breakeven price.

Inversely, do the same for downward direction. So i repeat this method over and over again. And my trading account balance grows to 5 digits from capital of 3k.

Unfortunately, i blow my accounts one day because of improper of money management. Use the earning money to buy more position with big leverage.
  • #31
  • May 4, 2012 3:27pm May 4, 2012 3:27pm
Quoting Fx2ProTrader
Hi Ben!

I used other broker to trade this binary instead of BOM. I did hedge my position when the move goes against my trades. I would like share my past experience here. And please enlighten me if i did some mistake for my trading method.

My broker provide the binary such as touch/rise or fall/above or below/range and tunnel. I used to trade weekly EURUSD with 2 position direction, Long & Short (Upward & downward direction). The risk to rewards ratio is 1:3. So after i have opened my binary position, i will set 2 hedging position for the...
Sounds like a good system!
so it sounds like you only lose if there is massive whipsaws in the price? also how does a binary trade? if the binary is "out of the money" dont you have a fixed loss which was the cost of opening the binary?
When you say weekly, do you set your trades at the start of the week and then close them/assess at the end of the week?

If only we could trade the VIX as well.... we would be sorted!
  • #32
  • May 4, 2012 3:30pm May 4, 2012 3:30pm
Quoting guess121
Don't withdraw money... keep compounding!

I am not sure enough of my system to risk it all lol!

Do you have any extra thoughts on how to avoid volatility in currency pairs? Unfortunately BOM no touch have a minimum of 24 hours to them... which is shame because we could set the no touch for only the asian session... easy money!
  • #33
  • May 4, 2012 7:20pm May 4, 2012 7:20pm
Hi Ben!

About binary
Binaries are designed to be easy to use, with each trade priced between 0 and 100, based on several factors - mainly the time to expiry and underlying market price.

Binaries allow you to take a view on whether a specific outcome will or will not occur. For example, will Wall Street close up on the day?

If the answer is 'yes', the binary settles at 100
If the answer is 'no', the binary settles at 0

Below is the example from my broker
It is half an hour before the close of trading and the underlying index is standing 15.5 points below the previous day's official settlement price. You think the market will rally before the close and end up on the day.

Buying a Wall Street Binary CFD

We quote a variety of Binaries with different targets for the net change of the daily settlement price of Wall Street. Our price for the market to finish between unchanged and up-20 points (0/+20) is 6.8 - 9.5.

You decide to buy 5 contracts at 9.5, the offer price. Each contract is worth US$10 per point. So you are risking 9.5 x 5 contracts x US$10 = US$475. You also know that, should the underlying index indeed finish up on the day, your position will be worth 100 x 5 contracts x US$10 = US$5000.

This represents a potential return of over 1000%, decided in the next thirty minutes.

Ten minutes later, Wall Street has rallied and is up 2.5 points on the day. Our quote for the 0/+20 Binary is now 53.2 - 56.2. You decide to take your profit rather than risk waiting for the settlement price. You close the position at our bid price of 53.2.

Profit
Closing level53.2
Opening level9.5
Difference43.7
Profit = 43.7 x 5 contracts x US$10 = $2185

Hope this help!
Yes, i did have lose sometimes when the outcome is "NO" as you said "Out of money".
I used to place my trades in the beginning of every starting week with hedging order.
So 3 possible outcome
1. Win the outcome of binary but trigger hedging order. I earn little the binary.
2. Lose the outcome of binary but trigger hedging order. i earn the hedging order to offset the binary.
3. Lose the outcome of binary and do not trigger hedging order. Lose binary.
  • #34
  • May 5, 2012 9:23am May 5, 2012 9:23am
Quoting Fx2ProTrader
Hi Ben!

About binary
Binaries are designed to be easy to use, with each trade priced between 0 and 100, based on several factors - mainly the time to expiry and underlying market price.

Binaries allow you to take a view on whether a specific outcome will or will not occur. For example, will Wall Street close up on the day?

If the answer is 'yes', the binary settles at 100
If the answer is 'no', the binary settles at 0

Below is the example from my broker
It is half an hour before the close of trading and the underlying...
So the price you pay is the only fixed cost you can incur on a binary?

Which broker do you use for this?

I shall have to take a look.

In the time this forum has been open (2 days) i have made £150! using BOM. One thing i am worried about is if they see me winning constantly that they might shut me down/jump the market against me...
  • #35
  • May 5, 2012 9:32am May 5, 2012 9:32am
Quoting bjn201
So the price you pay is the only fixed cost you can incur on a binary?

Which broker do you use for this?

I shall have to take a look.

In the time this forum has been open (2 days) i have made £150! using BOM. One thing i am worried about is if they see me winning constantly that they might shut me down/jump the market against me...
I use binaries on indices with IG Index, they offer 5 minute binaries on the FTSE, Dax and Dow

They also offer binaries on a range of forex markets, including whether the pair will close higher or lower, one-touch bets and a forex ladder, well worth having a look at

Andy
  • #36
  • May 5, 2012 10:04am May 5, 2012 10:04am
Quoting Andy B
I use binaries on indices with IG Index, they offer 5 minute binaries on the FTSE, Dax and Dow

They also offer binaries on a range of forex markets, including whether the pair will close higher or lower, one-touch bets and a forex ladder, well worth having a look at

Andy
i shall have to take a look. I am really interested in forex options, however these are unavailable to the retail trader! we can only use binaries etc instead! THe 5 minute binaries, is it possible to use those before an increase in volatility? e.g. before NFP, open one both ways and then hope that the market moves significantly so that the cost of one binary is outweighed by the gains of the other?
Also are spot binaries (buying at the current price) expensive? like would they be priced at 50 so that the strategy above is null lol.

anyhow, they could be a useful hedging instrument alongside BOM no touch.
  • #37
  • May 5, 2012 11:07am May 5, 2012 11:07am
Quoting bjn201
i shall have to take a look. I am really interested in forex options, however these are unavailable to the retail trader! we can only use binaries etc instead! THe 5 minute binaries, is it possible to use those before an increase in volatility? e.g. before NFP, open one both ways and then hope that the market moves significantly so that the cost of one binary is outweighed by the gains of the other?
Also are spot binaries (buying at the current price) expensive? like would they be priced at 50 so that the strategy above is null lol.

anyhow,...
IG Index offer daily and weekly options on 9 currency pairs

The 5 minute binaries on the indices tend to open around 50 but move pretty quickly, they're not available to trade during the first and last 30 seconds of any 5 minute segment

News releases tend to be very accurate to the second, so 5 minute binaries are limited in this regard as the news will usually be released at the start of the 5 minute segment. As the Market can be very volatile they can be useful though, as you may be able to buy an index at 5-10 points and within a minute or so sell the same index at 5-10 points, so risking 10-20 points at both sides of the market, certain to close one way or the other at 100 (other than the exceptional circumstances where the market closes at exactly the same point, where both bets would lose)

I've not really looked at the options pricing on indices and forex pairs, I'll do that on Monday, although it may be a quiet day as it's a bank holiday in the UK
  • #38
  • May 5, 2012 11:34am May 5, 2012 11:34am
Quoting Andy B
IG Index offer daily and weekly options on 9 currency pairs

The 5 minute binaries on the indices tend to open around 50 but move pretty quickly, they're not available to trade during the first and last 30 seconds of any 5 minute segment

News releases tend to be very accurate to the second, so 5 minute binaries are limited in this regard as the news will usually be released at the start of the 5 minute segment. As the Market can be very volatile they can be useful though, as you may be able to buy an index at 5-10 points and within a minute...
Yep it is a Bank holiday... ive got a no touch expiring on monday eve on the eur/gbp, hopefully nothing major comes out...

Also the options, are they actual options? cause on other SB firms they allow you to spread bet the value of the option, so its not actually an option just SB the underlying basically.
  • #39
  • May 5, 2012 11:39am May 5, 2012 11:39am
Hi Ben!

I used IG Market to trade this binary. So i shouldn't explain here since Andy B did so.

I used to earn nice money in the past by trading binary. Broker won't shut your trading account but they will monitor you such as calling you to remind the risk exposure blar..... I did experienced this.

Could you please provide the info on how BOM works? I would like to do a comparison.
  • #40
  • May 5, 2012 11:48am May 5, 2012 11:48am
Quoting Fx2ProTrader
Hi Ben!

I used IG Market to trade this binary. So i shouldn't explain here since Andy B did so.

I used to earn nice money in the past by trading binary. Broker won't shut your trading account but they will monitor you such as calling you to remind the risk exposure blar..... I did experienced this.

Could you please provide the info on how BOM works? I would like to do a comparison.
https://merlin2.betonmarkets.com/d/t...chnotouch&l=GB

This shows you the mechanics of it.

Basically you specify how much you want to win, and then choose the no touch level of the currency.... obviously the higher/lower the level is from the current price the less return they will give you... so say you want to win 100. at a certain level thats far away from current price the bet will cost 95 to win 100. at a higher (less likely) level the bet may cost 98 to win 100.
You can see the importance of avoiding volatility!
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