Binary Options Educational Examples

lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
This thread will be for posting educational/informational examples of trading binary options.
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  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    edited September 2015
    To start off with here is an example of a flat choppy market from which I have been avoiding for the most part last week. Seems this CHINA issue has spooked alot of institutional money and kept it on the sidelines. When faced with such I lower my leverage and trade less. I was even in the red last week not by much still could not find the edge on trades so mostly just stayed out. Many charts appear of similar fashion last week...

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  • xalksxxalksx Posts: 100
    See the thing with China i no this does not happen every day but when it does , im guessing it has a knock on affect with all sorts of trading ..And just a case of avoiding it while it calms down .
  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    edited September 2015
    Right I avoided it but at the same time tried to figure out where the money was statistically. I ended up finding if I traded 1-5 min trades using CYLON with a 2 step martingale and "High Roller" money management I could make up the slack I was feeling since my ALGOs were all but useless under those conditions. My stats for 1 day of trading were 17-6 about 73% with an around 30% growth. Now the "High Roller" MM uses 5-10% a trade in a 2 step martingale and risk 1 to gain 2-5x weekly with very short but very frequent trades. On average statistically I should win 2-3 out of 4 weeks in these ranges. So lets say you have 10k and you use 1k of that week one you do great and make 2k on top of it week 2 you do even better and make 3x or 3k on that and week 3 you do horrible and you lose 1K and the 4th week you make a bit over 1k. +2k +3k -1k +1k at the end of the month you are up +5k on your 10k so 50% using the 10% trading capital of which you keep 90% in the bank right... See the thinking involved here is about risk vs reward more then anything else. You always plan to limit your downside before you ever start. At the end of the month you then start over with 15k so now using 10% of that is 1,500 5/10% a trade rinse repeat but maybe This month your numbers are not as good and you lose -1k first week make +2k next week +1k week after that and then -1k the last week for +1k overall. Then start again next month $16,000.00 x 10% = trading capital $1,600 ect ect ect...

    When the FRONT END is finished for "Signal Rush" I will also incorporate how you trade winning martingales in multiple steps that you can isolate statistically with your own trading stats...
  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    edited September 2015
    Example of new paradigm of the current markets? Win rates on trend trades have been off the chart and these odd one directional waterfall moves I have been trading on the spot side have been extremely profitable the past few weeks. Binary side I have been sidelines simply because I get no sync with my ALGOs and am compiling statistics to find the overall edge from a TIME perspective is being worked out. If you are a mean reversion trader you will get smoked in this market or have to filter trades to where you get only a handful a week making it less then worthwhile to trade imo.. Here is what I now use below to trade and only in the direction of STRONG moves... When the market gives you lemons "Pucker up b____!"

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  • CamCam Posts: 28
    Hi Lotz

    I see you speaking about using Algorithms and Time for trading.
    I know you have a busy schedule being that you are full time trader but do you have any advice how one can start in the this style of trading . Do you have one simple example you can teach on say a simple algo(calculating it) and a chart example.I know you say you will be offering lessons when Signal Rush is up but in the meanwhile could you help out .
  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    For me time/price have to sync and show flowing behavior of a healthy active market place. Right now it is what I consider very unhealthy. How that appears is tight ranges that oscillate randomly for extended periods of time then breakout into trends with low tick activity/interest. I see this and I go on vacation lol... Right now I am keeping my powder dry and just waiting waiting waiting... I don't trade poor trading environments. If I started the room people would be very very bored as I use to get over over 8 trades a day on average that made statistical sense with a win rate around 70% and the past few months from the china flash crash the markets are just pure wonk. Imagine that china flash crash as the market having a heart attack/stroke and its on medication right now recovering LoL... Strange but that is what it looks like to me and all you can do is wait for it to recover... I have plenty of time let me make some vids of this happening.
  • CamCam Posts: 28
    That will be great. Can't wait.
  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    Let me give you an example in the mean time. Here is an ALGO trade I had on the USD/JPY notice the box size is about 4 pips from start to finish which is amazingly small for the given time. That means the market has no RANGE/FLOW up and down and you should notice this the past few months with slow trending moves/chop/or extreme fast moves of large value that reverse just as fast. This will cause trouble for many traders as its extremely abnormal pricing. What it really is are very large entities controlling prices or a super thin market place where very few orders at different levels exist. Imo its the first and think of it as you are fishing in a pond and having a nice day then all of a sudden some big ole fat redneck cannon balls into your fishing spot getting you wet and scaring all the fish away :/ As well that trade end to end time finished right around 120 by the box end time simply because all it took was one decent size order to move it the 4 pips in less then a min another reason tight ranges are dangerous. This adds risk gives lower performance to my ALGOs and makes me trade little or not at all. The ideal move for that would be for it to at the very least by the end time hold @ or under the 75% of range value.

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  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    Again this morning example of the spike/trend/flat chop movement that is repeating itself. Notice the flat choppy range of the euro in a fairly tight just over 10-20 pip range. In that time Gold Spikes very quickly in a 2 minute move then reverses just as quick as it stands gold ran up on the spike to around 1192 then spiked again all the way back down to 1175 now is back to about the mid price 83 all manipulated moves that just don't seem to have any real logic or flow to the overall market place. That equals higher risk fyi and is a good educational example of the above statement. Its as if the big guys are clustering their orders keeping the prices very tight then jerk it up and down to extreme levels then return it back to medium values all without any footprint. The bank algos are still trading and you can see them executing but the market makers/big ole redneck has control of the direction and timing so he steps in fills the orders then moves it where they want. This equals an unhealthy market place and me sitting around enjoying my hobbies/vacationing.

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  • CamCam Posts: 28
    Very interesting. Man I am trading wet..lol I like this.Thanks for your explanations as well.May ask with the Euro example are the tight ranges being done on purpose say by the banks/MM or is it a case that nobody knew what to do or are the their alogo not receiving the necessary queues to make moves. ?

    For the USD/JPY:
    1.How did you know where to pick your top point and the end range was this something your Algos showed?
    2.I see arrows I presume these were signals you marked or trades you took or was this just an indicator you had written before simply following its rules?
    3. What was the chart time frame for the USDJPY example?
    4.Is that a tick chart or am i mistaken ? If so what's is it's effectiveness in determining your trades versus the barchart?

    Sorry for the questions or if i am asking stupid questions.. I am trying to solidify my trading skills
  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    edited October 2015
    That is not what I consider an ALGO but rather a simple overbought/oversold indicator based on a combination of parameters similar to what many signal providers on "Signal Push" though these arrows might have a few more variables it is generally the same concepts when markets make an extreme move in both volume/range/tick activity the arrows will pop up to signify an extreme on that candle in time. From there you can then decide weather to enter or not. That is where I then will look at my ALGOs to determine if I have a box of time that says from x to y price should follow this path down to z. Then from there I want to see the boxes I draw from the starting point how close they reflect what really happens from end to end. Now I can use any system or method in alignment with my ALGOs to accomplish this. I mostly try to find patterns, price action, simple ob/os, support/resistance, divergences ect ect that offer a confluence of high probability entries. All the charts are 5 min but my entries are based on the 1 min and even tickcharts/market depth in the background that you don't see. The visualization of the bars are japanese candle sticks compared to bar charts or line charts and can be applied to any time frame. You even have other more exotic ways to look at period of time/price in a given range with such things as heikenashi/renko/kagi ect ect. Its all the same stuff I generally prefer candles unless I am trying to crunch other data into the bars making them wider or more narrow for visualization then I can mold them like a sculpture of price action.
  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    edited December 2015
    Somebody again sent me an email asking about the "MAGIC INDICATORS" I use. I can have the same indicators and variables for a trade and pass on some and take others because of the price action. That to me is the "Holy Grail". You can't just see it you have to be it! Its 100% "Price Action" Again the best book on it is below, just note its over 100 years old but explains the concepts more exact then any book I have ever come across to date outside of reading "Sun Tzu's Art of War"

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    Book is free FYI ---> https://archive.org/details/studiesintaperea00wyckrich <---
  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    edited December 2015
    Example of trading Support or Resistance with binary options in mind. In this example multiple levels of confluence and patterns helped to push the Euro under 1.0866 for an extended period of time.
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  • ProniProni Posts: 1
    lotzofbotz, thank you so much for a thread. just've added this one to my bookmarks.
    Would like to ask, who can post here? may I as a newbie post some useful infos and/or links?
  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    sure feel free to post here just keep it educational in nature please. Thanks!
  • PattyPatty Posts: 1
    From looking at the Nadex platform you have to purchase the binary at a set price where as with overseas brokers you can trade at the amount you are willing to loose. Am I missing something here?

  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    The number one thing you could miss is that Nadex is really IG and really more american style options then the pure digital style binary options. There are floors/ceilings/time decay all kinds of elements you have to factor in to trading such a product. Overall imo i would save money by trading through my broker interactive and get better pricing with my size then on Nadex. Though though they might wish to say different they are just really american style options with some less then interesting features and for small accounts have some minor savings which are quickly eliminated by their crap low liquidity market makers who will bleed the average trader there dry. As well their platform is pure crap and too many instances of them using vs their clients which are few because they are greedy _unts who just want business as usual instead of being innovative. I would fire everybody at that company for being losers...
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