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Binary Options: Your Success Rate?

  • #41
  • Feb 10, 2015 2:26pm Feb 10, 2015 2:26pm
- There are two sorts of optimizations possible; 1) your trading algo 2) your per trade investment. It is 2 that a looser in 1 can be fixed. It becomes a new algo.
Not financial advice. For testing purposes only. Do not use on live account
  • #42
  • Feb 10, 2015 2:32pm Feb 10, 2015 2:32pm
- Check what you trade.

// A certain broker offers 60sec, 5m, 10m, 30m and 1hr expiry.
// Payouts vary; 80% pay, 73% 75% 70% 70% 73%

That % can make the difference between a winner or a loser
Not financial advice. For testing purposes only. Do not use on live account
  • #43
  • Feb 10, 2015 2:50pm Feb 10, 2015 2:50pm
I traded binary options for some time.

They are mathematically extremely difficult to consistently profit from. Why?

1. They have a risk to reward of only 0.85 AT BEST (if you risk $100 they give you $185 - but its actually only $85 profit)
2. The low RvR means you need a win ratio of over 65% to be profitable from (refer to attached chart). Which doesn't sound too hard - EXCEPT for the next point..
3. You need to introduce a new variable into your trading which is TIME - which makes it much more difficult.

While many people will come back and say 'oh yeah, i've been successful - look at my results etc etc' you need to realise that your looking for LONG TERM results. Not just a few wins. If someone shows me they have been profitable with over 200 trades i'd believe them.

Personally for me - trading is ALL about risk to reward. Win rate is no where near as important. I've been successfully trading with a win rate of only 30% or less yet managed to have pretty good results..

I think binary options is akin to a casino where the odds are against you from day one. i suggest you STAY AWAY FROM THEM
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 75 KB
  • #44
  • Feb 10, 2015 3:33pm Feb 10, 2015 3:33pm
80% payout: you need 55.55555555556% and upwards correct to be profitable, OR have an additional what I call positive/negative martingale system (i.e. increase on profit/loss OR increase based on how many trades in a row in short distance of each other - quite powerfull that last one).

81%: you need ~55.248% and ...
75%: you need ~57.143% and ...
73%: you need ~57.804% and ...
70%: you need ~58.824% and ...

It's all in the numbers... And it seems the brokers know it... I wonder what tools they use...
Not financial advice. For testing purposes only. Do not use on live account
  • #45
  • Feb 10, 2015 3:44pm Feb 10, 2015 3:44pm
- Optimize a algo on a long period, on (somewhat older) data from another broker, then take it to a shorter period on data of the target broker and see if it still validates. For example, find a good algo on about 1-3 years of other-broker data, last date 3 months ago. Then take it to 3 months of target broker data and see if it validates. Optimizing on larger avoids curve fitting. Also go back to read if(true) post to check data to start with (i.e. avoiding too much upward/downard).
- Reverse optimize; optimize an algo for 3 months of broker-specific data (both data's checked with the if(true)...), then check it against 1-3 years of other-broker data. Does it at least meat a good threshold (see minimum thresholds in post #43)? Ensures algo validation.
Not financial advice. For testing purposes only. Do not use on live account
  • #46
  • Feb 10, 2015 3:48pm Feb 10, 2015 3:48pm
Fun thing; some brokers do not provide you with data. Though, if they are a Spot Forex broker as well, a Demo account may at least give you some impression, though remember that BO data is (often?) skewed... It usually has no spread (except for DukasCopy) and so the broker could skew it any way they like... How much they do it is another question.
Not financial advice. For testing purposes only. Do not use on live account
  • #47
  • Feb 10, 2015 4:08pm Feb 10, 2015 4:08pm
A neat addition to gain a few extra %, easy tweakable vs signal ratio. Ideal if you see "blob of wrong, blob of correct" syndrome. You'll know it when you see it (provided you visualize things offcourse)

Inserted Code
int lasttrades=0;
for(int a=0;a<60;a++){
  if(your_algo[i+a]){lasttrades++;}
}
if(your_algo && ((lasttrades<=2) || (lasttrades>9))

Vary the 60,2 and 9 numbers.
Not financial advice. For testing purposes only. Do not use on live account
  • #48
  • Feb 10, 2015 4:11pm Feb 10, 2015 4:11pm
Quoting sydfx24
you need a win ratio of over 65% to be profitable from (refer to attached chart). Which doesn't sound too hard
I think it's very hard to find a 65% formula with a decent signal frequency. Welcome to prove me wrong though.
Not financial advice. For testing purposes only. Do not use on live account
  • #49
  • Feb 10, 2015 4:12pm Feb 10, 2015 4:12pm
The blobs I was mentioning before
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDM1_blobs.png Size: 34 KB
Not financial advice. For testing purposes only. Do not use on live account
  • #50
  • Feb 10, 2015 4:29pm Feb 10, 2015 4:29pm
Another way to avoid the same (better!)

Inserted Code
&& int(NormalizeDouble(iBands(NULL,0,20,2.00,0,PRICE_OPEN,MODE_UPPER,i)-iBands(NULL,0,20,2.00,0,PRICE_OPEN,MODE_MAIN,i),_Digits)/Point)<150

Vary the 150.

Let's share formula's/parts of formula's and help each other out...
Not financial advice. For testing purposes only. Do not use on live account
  • #51
  • Feb 10, 2015 4:49pm Feb 10, 2015 4:49pm
The if(true) method above. If it gives let's say 49.10% on 1 million bars, then it would be fair to say that any formula you come up with you have to do -0.90% to be approx. accurate - correct/agreed?
Not financial advice. For testing purposes only. Do not use on live account
  • #52
  • Feb 10, 2015 5:01pm Feb 10, 2015 5:01pm
I have found a friend in iBands (Bollinger bands) - 4 clauses, each one on different periods and comparing with points (see post #50) + one other default indicator... and...
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDM1_bandsaregreat.png Size: 58 KB
Not financial advice. For testing purposes only. Do not use on live account
  • #53
  • Feb 10, 2015 5:03pm Feb 10, 2015 5:03pm
A growing idea; "control the data with enough different indicators (and/or different lenght period) checks and you'll avoid curve fitting" - correct?
Not financial advice. For testing purposes only. Do not use on live account
  • #54
  • Feb 10, 2015 5:32pm Feb 10, 2015 5:32pm
Another; "Have a solid base signal (think for example about RSI long term) that generates a good amount of signals (==signal frequency) at reasonable %, let's say 55 orso). Then improve this signal ("tie it down") with another good filter". All the while do this on enough bars (1 million+). Then take to target-broker as described above.
Not financial advice. For testing purposes only. Do not use on live account
  • #55
  • Feb 10, 2015 7:11pm Feb 10, 2015 7:11pm
Quoting roel13
I like the idea. We could maybe even do a kickoff Google hangout or so. I have picked up many things from others over time. I am not really interested in news trading and have found that 15,20,30,60 expiry is best. 60sec-5 minutes: too hard to create a good formula for
You mentioned this above but then your posts after we about a 60 second stategy ?
Learn, a forex trader must, unlearn and relearn he will.
  • #56
  • Feb 10, 2015 10:51pm Feb 10, 2015 10:51pm
Quoting COGSx86
{quote} You mentioned this above but then your posts after we about a 60 second stategy ?
No, not really. Not sure where you made that conclusion.
Not financial advice. For testing purposes only. Do not use on live account
  • #57
  • Feb 11, 2015 8:21am Feb 11, 2015 8:21am
Quoting roel13
{quote} No, not really. Not sure where you made that conclusion.
because all the screen shots you post are from a 1 min chart ?

Im not really sure what your strategy is about ? It would be awesome if you could share it ? I know you talk about C++ coding. I will admit I dont much about it. Most of my trades are based on analytics, so its hard for me to understand your approach ?
Learn, a forex trader must, unlearn and relearn he will.
  • #58
  • Feb 11, 2015 3:15pm Feb 11, 2015 3:15pm
The 1 minute chart is what I use for running all tools (any larger timeframe requirements, if any, can also be executed on M1), the expiry can be set in-code, so for example Close[i] vs Close[i+20] would be a 20 minute expiry (i.e. not 60 seconds/M1 trades). All code is in MT4 easylanguage. The strategy, interestingly enough, is already posted 85-90% in the thread above.
Not financial advice. For testing purposes only. Do not use on live account
  • #59
  • Feb 11, 2015 4:26pm Feb 11, 2015 4:26pm
Quoting roel13
The 1 minute chart is what I use for running all tools (any larger timeframe requirements, if any, can also be executed on M1), the expiry can be set in-code, so for example Close[i] vs Close[i+20] would be a 20 minute expiry (i.e. not 60 seconds/M1 trades). All code is in MT4 easylanguage. The strategy, interestingly enough, is already posted 85-90% in the thread above.
Yes so are you going to share the strategy ? Haha, I have also had some EAs developed with this approach.
Learn, a forex trader must, unlearn and relearn he will.
  • #60
  • Feb 19, 2015 5:18pm Feb 19, 2015 5:18pm
And based on your response it did not work out?
Not financial advice. For testing purposes only. Do not use on live account
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