Daily 100 - Binary Options trading

Trading Discussion Trade Journals
1

This will be a thread that will record my binary option trading activities. I have already opened a binary options account with an initial investment of $1K. This thread will discuss only about binary trading and anything other than binary options trading may please be kept away from this thread.

This is just an introducing post and the below questions will be answered in the future posts before commencing trading activities.

  1. What is Binary option trading ?
  2. What are Different Types of Binary Options ?
  3. Why I feel, it is better than traditional Forex trading ?
  4. Why I decided to go forward with Binary options ?
  5. What is my trading method ?
  6. Why this thread required ? What are the objectives ?
  7. How is my trading going ?

Stay Tuned. I will be back

Thank you

Bijoy

2

The subject, binary option trading is explained exactly in babypips school chapter Binary Options 101.

However, for better understanding of this thread, a brief description is required.

In short, Binary options trading is the simplest and easiest way of trading Forex than traditional Forex trading. It is not bothered about the stop loss, take profit levels and the extent of a move. Profit or loss in this type of trading is pre-determined and doesn’t depend on the pip movement.

It is bothered only about the direction of price movement in a fixed time frame.

In this type of trading, the words like exit strategy, stop loss, Take profit, risk to reward ratio etc., has zero importance.

We can understand it with an example.

You are long(call in Binary trading) on EURUSD at 10.00 AM with 1 standard lot (pip value is $10) from 1.2100 with 1.2200 as take profit and 1.2050 as stop loss which gives you a comfortable rr ratio of 1:2. After 15 minutes of trade execution at 10.15 AM, you are deciding to close the position because of some or other reasons. Here your result can differ according to pip movement at the time of closure. some possible results can be:

  1. Price at 1.2190. so your profit is 90 pips X $10 = $ 900
  2. Price at 1.2130. So your profit is 30 pips X $10 = $ 300
  3. Price at 1.2101. So your profit is 1 pips X $10 = $ 10
  4. Price at 1.2060. So your loss is -40 pips X $10 = -$ 400
  5. Price at 1.2098.So your loss is -2 pips X $10 = -$ 20

No we can see the results of same position in a Binary option trading.

You are in a call(long in Forex trading)position on EURUSD for 15 minutes from 10.00 AM with $100 as premium, on an 80% payout platform from 1.2100. After 15 minutes of trade execution at 10.15 AM, your position will be automatically closed as the 15 minute time inter well expires. Here your result will be as follows.

  1. Price at 1.2190. Here the price is above your entry and so the profit is 80% payout = $ 80
  2. Price at 1.2130. Here the price is above your entry and so the profit is 80% payout = $ 80
  3. Price at 1.2101. Here the price is above your entry and so the profit is 80% payout = $ 80
  4. Price at 1.2060. Here the price is below your entry and so the loss is 100% premium = -$ 100
  5. Price at 1.2098. Here the price is below your entry and so the loss is 100% premium = -$ 100

From this example, it is clear that the profit and loss in Binary options is pre -determined in terms of the premium you are risking and is not related to the movement of pips, but only concerns whether the price is above or below entry price.

Whether it’s by 1 pip or 1,000 pips, it’s the same profit payout or loss at expiration…

In Binary options, the amount risked is known as premium and that will be the amount lost on a loss position. Similarly the profit that that can be gained in a winning position is known as payout and is a fixed percentage of the premium offered by the broker. Normally it varies between 70% to 90%

CALL and PUT

If you believe, price may go higher, in forex you will enter on a long(Buy) position and in Binary option, yu will enter on a Call option. Similarly, if it is in the downward direction, in Forex you will enter on a Short(Sell) position and in Binary option you will enter on a Put option.

Binary option trade can be more explained with the help of a chart.

Below is a 15 minute AUDCAD chart

AUDCADM15.jpg700×286 20.8 KB

Here you can see that the price is @ 0.97565.

Call option Scenario.

Now you believe that the price will go higher and enter on a call option for the next 15 minutes @ 0.97565. You risk a comfortable premium with a broker who offers 80% of payout

After 15 minutes you will be gaining a profit that equals 80% of the premium risked, if price is above 0.97565 at least by 0.1 pips or by 1000 pips or by any quantity of pips. In other case, if price
is below 0.97565 at least by 0.1 pips or by 1000 pips or by any quantity of pips, you will be loosing your premium risked.

Put Option Scenario.

Now you believe that the price will move down and enter on a put option for the next 15 minutes @ 0.97565. You risk a comfortable premium with a broker who offers 80% of payout.

After 15 minutes you will be gaining a profit that equals 80% of the premium risked, if price is below 0.97565 at least by 0.1 pips or by 1000 pips or by any quantity of pips. In other case, if price
is above 0.97565 at least by 0.1 pips or by 1000 pips or by any quantity of pips, you will be loosing your premium risked.

So this is the best and easiest way of trading without the head ache of exit strategy and rr ratio, at least for me.

Hope it helps. Stay Tuned.

Bijoy

3

There are several types of Binary options trading methods and the major ones commonly used are follows.

  1. [B]Classic Binary Options[/B]: This is the most commonly used trading type.The Classic Binary Options require traders to simply predict whether the value of an underlying asset will rise or fall within a predetermined time frame. In this type of trading, a trader wins his position if the price is away from entry at least by 0.1 pips in the trade direction (Put or Call) after a pre -determined time frame. The trade duration can be selected according to our comfort as 15m, 30m 1h etc… This type of trading is more suitable for day traders.

Here the question for trading will be as below

Will the price of EURUSD (or any other asset) be high or down after 15 minutes(or 30 minutes,1 hour, 2 hour etc) ?

  1. [B]Long Term[/B]: Long Term Binary Options require traders to simply predict whether the value of an underlying asset will rise or fall within a predetermined time frame longer than that of Classic Binary Options. More suitable for swing traders.

Here the question for trading will be as below

Will the price of EURUSD (or any other asset) be high or down after 1 day (or 2 days, 1 week, 1 month etc) ?

  1. [B]Sixty Seconds[/B]: As stated by their name Sixty Seconds Binary Options require traders to predict whether the value of an underlying asset will rise or fall within the sixty seconds. Suitable for scalpers.

Here the question for trading will be as below

Will the price of EURUSD (or any other asset) be high or down after 60 seconds ?

  1. [B]One Touch[/B]: One Touch Binary Options require traders to predict whether the value of an underlying asset will reach a predetermined level at least once within the expiration time frame. The price of the asset at expiration is not relevant; if the price has reached the required level at any time within the position’s time frame, the option is considered successful and the payout is allocated to the trader’s account.

Here the question for trading will be as below

Will the price of EURUSD (or any other asset) touch a particular level at least once in the next 15 minutes(or 30 minutes,1 day, 1 week etc) ?

  1. [B]Double Touch[/B]: Double Touch Binary Options require traders to predict whether the value of an underlying asset will reach a predetermined level at least twice within the expiration time frame. The price of the asset at expiration is not relevant; if the price has reached the required level twice at any time within the position’s time frame, the option is considered successful and the payout is allocated to the trader’s account.

Here the question for trading will be as below

Will the price of EURUSD (or any other asset) touch a particular level at least twice in the next 15 minutes(or 30 minutes,1 day, 1 week tc) ?

  1. [B]Pairs[/B]: Pairs Binary Options require traders to predict whether the value of an underlying asset will outperform its rival in a pair by expiration. Pairs Binary Options are suitable for traders which understand that Assets in the financial markets have a tendency to move in pairs and have a sense of their inter connectivity.

Here the question for trading will be as below

Which pair among EURUSD and GBPUSD (or Gold and oil, Apply and microsoft etc) will gain(or loose) more within next 15 minutes(or 30 minutes,1 day, 1 week and likely) ?

  1. Also there are many other types of binary options trading methods like [B]Ladder, Out of range, touch above and go below, Go above or below by certain quantity of pips[/B] etc, etc, etc…

[B]The first one, that is Classic Binary Options type of trading is more suitable for day traders and this will be the trading method adopted by me in all my future tradings[/B].

Stay tuned…More is coming

Bijoy

4

Some of the reasons are as follows.

  1. Due to the higher risk nature of binary options, typically the returns on your investment are also higher. Average returns are typically between 70-90%. This compares to a FOREX trader who would typically realize returns of approximately 10%.

  2. You know right up front exactly how much you are risking and exactly how much you will profit if you win the trade. There is no risk of leverage costing more than the amount you risked on the trade. Only your chosen amount to risk on any particular trade is at risk on that trade. You know exactly how much money you can possibly lose and how much exactly you can possibly make if you win. It does not matter how high or low a price goes as long as it closes in the money for you. A single pip in the money is as good as 50 pips in the money. You still get the same payout on the trade either way.

  3. Although binary options produce higher payouts, the risk of these assets is inevitably higher than other investments. To help reduce this risk and make binary option trading more appealing, many brokers offer a small return on the money invested on a losing bet. For instance, on an option that did not go in your favor, instead of losing 100% of the initial investment, you may receive anywhere between 5-15% of that investment back.

  4. You also only have to make a prediction correct out of two possible outcomes. You do not have to worry with stop losses, leverage and magnitude of price movement when binary trading.

  5. One of the most intriguing factors of binary options is that they have a very fast turnover and therefore a quick payout. Although this can differ across different assets, binary option expiry times are typically an hour or less, thus you can trade more options per day and therefore have the opportunity for more profit. Many of the daily binary option traders trade 15 or 30 minute options.

  6. The binary nature of options ensures the investor knows how much he risks losing from an option. There will be no margin calls as options will never expire out-of-the-money.

  7. Regardless of the trader’s level of experience, individuals can benefit from binary options trading. For users who are new to the world of online trading, the simplicity of binary options allows trading with minimal effort or risk.

  8. It ends up the head ache of risk to reward ratio and exit strategy.

  9. Surprise volatility is not usually an issue in binary options trading. Provided that your view turns out to be correct, you don’t need to worry about the market’s knee-jerk reactions. The max risk is still set, but so is the max reward.

  10. The final reason for trading binary options is the level of excitement it provides. Due to its fast pace and inherent unpredictability, investors will find that, despite the high level of risk, binary options provide a new and exciting option to trading that they can use exclusively or simply once in a while.

Feeling Boring ?..Don’t give up. It is going to be a surprise.

Bijoy

5

Answer for this question may be the highlight of this thread.

I began forex trading early in 2010 and developed lot of trading strategies. During these 5 years, I executed thousands of winning trades as well as loosing trades both in demo and real accounts. My predictions were 80% accurate during this period. But net outcome in long term was negative. This made me to have a re look on my executed trades. Following points were noted from the review

  1. Whenever I put very small take profit (Like 20 pips, 30 pips, 50 pips etc.), price hit take profit too fast and then it proceeded to 100, 200, 300 pips in the profitable direction making a feeling that I exited early with a less profit.

  2. Whenever I put a big take profit, It was seen that the price reached just near to my TP before turning back and hitting stop loss, making a feeling that the trade would have been a winner If I had a smaller take profit.

  3. Whenever I put big stop losses, it resulted that many winners were eaten up by a single loosing trade.

  4. Whenever I had small stop losses to have better rr, It resulted in having frequent loosing trades.

  5. Whenever I exited a winning trade early before hitting TP, I found that the price proceeded to my take profit levels after my early exit.

  6. Whenever I kept a winning position for long time expecting more better result, It was seen that the price reversed and hit my stop loss.

  7. Whenever I exited a losing position early to cut the losses, It was seen that the price reversed and went up to TP level before further going towards the initial stop loss.

All these type of scenarios made me confused in developing an exit strategy. I was not successful in pre-determining the levels of TP, SL etc. Though I tried several types of rr ratio and money management methods, it never gave me a good return up to my satisfaction. I was totally a failure in calculating possible quantity of pip movement.

I successfully predicted the direction of price movement but failed in determining exit levels and having nice rr ratio. High leverage also killed my micro accounts several times.

All these headaches are now solved with Binary Options. Here there is no TP, no SL, no RR and no leverage. Everything is simple and the factor concerned is only price direction. It is not bothered about the pip movement. Outcome is same for 1 pip movement and 1000 pips movement.

I had unbelievable results, when I combined my 5 years experience, research and knowledge with binary options trading.

[B]I found my way………and believe……it is my way…………
[/B]

More is to come

Bijoy

6

My trading method is very simple and it has some strict trading rules.

  1. Maximum open positions will be only three.
  2. Hedging is not allowed.
  3. No News trading
  4. Maximum risk per trade will be &25 (at least for next 6 months) per trade.
  5. Entry will be based on candlestick patterns
  6. Most commonly used candlestick patterns are Pin bars, Engulfing, Marubosu, White soldiers and Black crows.
  7. Price action at Trend lines, support and resistance lines are closely observed.
  8. Time frame of Charts used or analysis is 15 minutes.
  9. Trade duration will vary between 5 minutes and 60 minutes
  10. Target of this system is to gain $100 daily (at least for next 6 months)
  11. No revenge trading.

All details like combination of candle stick with trend lines, support/resistance levels etc., and entry methods will be discussed more in detail, when we start discussing about my live trades.

Be patient……… Two more posts before starting Live Journal.

Bijoy

7

The main objective of this thread is to keep record of my binary options trading. That will allow me to review the trades for any types of mistakes to be corrected, corrections to be taken, improvements to be adapted etc, etc. This also will help me to get advises from veteran traders for improving my trading methods. Also it will enable me to share my experience with newbies and help them to improve as successful traders.

Bijoy

8

Of course, It is very necessary to verify the trades frequently for it’s genuine nature.

for me, all my Binary options trades are recorded as signals from the Zulu binary options trading platform. Below is the link to my zulu signal account named as Daily 100. This link is provided here for verifying the ingenuity of trades executed from the trade history tab.

[B]Daily 100 - Zulu Binary options signal provider[/B]

So, this is the end of my Introduction…and sorry for this long Description…

Now we will proceed with live trades executed and all loses, wins, draw downs, gains etc… will be recorded.

Any comments are appreciated

Thank you

BIJOY

9

Today’s trading was very interesting and the results were amazing. Totally I had 5 traders and all were winners. My target of $100 for today is achieved and so there is no more trading today.

Following are today’s trades

For all trades, I risked $25 each

  1. EURUSD call (Long) @ 1.05277. Trade expired @ 1.05284 and gained 83% payout, i.e., $20.75
  2. AUDCAD call (Long) @ 0.97724. Trade expired @ 0.97809 and gained 78% payout, i.e., $19.50
  3. EURUSD Put (Short)@ 1.05395. Trade expired @ 1.05314 and gained 83% payout, i.e., $20.75
  4. USDJPY call (Long) @ 121.265 Trade expired @ 121.28 and gained 80% payout, i.e., $20.00
  5. USDJPY call (Long) @ 121.275. Trade expired @ 121.316 and gained 80% payout, i.e., $20.00

Total gain is $ 101.00

Results can be checked at my Zulu trading profile here at [B]Daily 100[/B]

Thank you

Bijoy

10

Today’s trading was very stressful and executed 23 trades to achieve the daily target of 100 dollars. Out of 23 trades 7 were looses and all other 16 trades were winners. My target of $100 for today is achieved and so there is no more trading today.

Following are today’s trades

For all trades, I risked $25 each

  1. AUDJPY call (Long) @ 92.571. Trade expired @ 92.571 and it was a tie. No result, i.e., $00.00
  2. AUDJPY call (Long) @ 92.58. Trade expired @ 92.571 and lost premium. i.e., -$25.00
  3. AUDJPY call (Long) @ 92.616. Trade expired @ 92.571 and lost premium. i.e., -$25.00
  4. EURUSD Put (short) @ 1.05679 Trade expired @ 1.05669 and gained 83% payout, i.e., $20.75
  5. EURUSD Put (short) @ 1.05678. Trade expired @ 1.05669 and gained 83% payout, i.e., $20.75
  6. EURUSD Put (Short) @ 1.05669. Trade expired @ 1.05669 and it was a tie. No result, i.e., $00.00
  7. AUDJPY call (Long) @ 92.548. Trade expired @ 92.575 and gained 78% payout, i.e.,$19.50
  8. AUDJPY call (Long) @ 92.568. Trade expired @ 92.575 and gained 78% payout, i.e., $19.50
  9. NZDJPY call (Long) @ 89.595. Trade expired @ 89.572 and lost premium. i.e., -$25.00
    10.AUDJPY call (Long) @ 92.574. Trade expired @ 92.582 and gained 78% payout, i.e., $19.50
    11.AUDJPY call (Long) @ 92.57. Trade expired @ 92.608 and gained 78% payout, i.e., $19.50
    12.NZDJPY call (Long) @ 89.512. Trade expired @ 89.536 and gained 80% payout, i.e., $20.00
    13.NZDJPY call (Long) @ 89.564. Trade expired @ 89.536 and lost premium i.e., -$25.00
    14.EURJPY call (Long) @ 128.213. Trade expired @ 128.221 and gained 80% payout, i.e., $20.00
    15.NZDJPY Put (Short) @ 89.565. Trade expired @ 89.589 and lost premium, i.e., -$25.00
    16.EURUSD PUT (Short) @ 1.05622. Trade expired @ 1.05612 and gained 83% payout, i.e., $20.75
    17.EURUSD Put (Short) @ 1.05596. Trade expired @ 1.0558 and gained 83% payout, i.e., $20.75
    18.EURUSD call (Long) @ 1.05858. Trade expired @ 1.05828 and lost premium , i.e., -$25.00
    19.EURUSD call (Long) @ 1.0573. Trade expired @ 1.05847 and gained 83% payout, i.e., $20.75
    20.EURUSD call (Long) @ 1.05747. Trade expired @ 1.05847 and gained 83% payout, i.e., $20.75
    21.EURUSD call (Long) @ 1.06045. Trade expired @ 1.0603 and lost premium i.e., -$25.00
    22.EURUSD call (Long) @ 1.05938. Trade expired @ 1.05962 and gained 83% payout, i.e., $20.75
    23.EURUSD call (Long) @ 1.05952. Trade expired @ 1.05962 and gained 83% payout, i.e., $20.75

Total gain is $ 104.75

Results can be checked at my Zulu trading profile here at [B]Daily 100[/B]

Thank you

Bijoy

11

Today was a very painful day. Anyhow I managed to gain my daily target. But for that I executed 77 trades.

Today’s gain is $111.50

I cannot post all 77 trades here. You may verify it here at [B]Daily 100[/B]

Thank you

Bijoy

12

Nice work! I always have problems on Binary options.