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Binary Options - How not to get stopped out

  • #41
  • May 19, 2012 6:37am May 19, 2012 6:37am
Quoting Yoda_Glenn
Here’s an example of why I prefer Binary Options over Spot Forex.

Lets say you have two traders taking the same position on the same currency pair, trader A & trader B. Both trader A&B will be shorting the USD/CAD.

Trader A opens up a spot position @ 1.0325 with a stop loss of 60 pips.

Trader B sells a Binary Option contract @ 1.0325

Now, lets say the USD/CAD begins to go in the right direction for 20 pips, but suddenly, it spikes up some 80 pips from 1.0305, due to a sudden reversal.

Trader A’s spot position is immediately wiped out, and...
If you are risking 100.00 and the payout is between 71 and 81.00 how can the reward to risk be 1 to 1. It is always tilted to the brokers side
  • #42
  • Oct 22, 2012 5:49pm Oct 22, 2012 5:49pm
Bottom line is this: The most you can gain trading one contract is $100 less fees and the most you can lose is $100 less fees. In both cases you would have to be brain dead. On a 50/50 you could win $50 (less fees) with a risk of $50. Use your mathematical acumen and tell me what a $50 gain is on a $50 risk.
  • #43
  • Last Post: Oct 23, 2012 2:31am Oct 23, 2012 2:31am
Not really knowing much about binary options, but seem to be lately getting hammered with emails about them. One thing I can see that maybe advantageous to anyone that trades these instruments, is that because you know your exact risk before you place the order, then you could consider some sort of staking plan with regards to profit and loss. I use to turn over about $10K a week on the horses (win only) and it was all based on good money management with the use of a solid staking plan as you knew exactly what odds you were getting before you placed the bet. After a loss, there was simple maths involved to work out your new target based on the odds (potential win) on the next race. Just a thought that it maybe possible to do the same with binary options. Cheers.
JAGfx
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