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aliassmith
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Postby aliassmith » Tue Dec 29, 2009 8:14 pm

newschool wrote:To aliassmith:

"Whether You Believe You Can, Or You Can't, You Are Right." Henry Ford.


Excellect Quote newschool!

I have actually done it before a couple of times. Now I need to
believe I can develope the skills to perform at that level
more consistantly.
Trade Your Way as Long as It Makes Money!

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Deusomega
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What happened?

Postby Deusomega » Fri Jan 01, 2010 6:30 pm

Hmm what happpened to this? Sounded like something everyone would be interested in :)

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MightyOne
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Postby MightyOne » Mon Jan 04, 2010 11:12 am

rushN4 wrote:Hello MO

just a quick question. have you ever traded future spreads?

here is a link for description
http://www.spread-trading.com/what-is-s ... rading.htm


I placed a few spread trades after reading

http://www.amazon.com/Trading-Spreads-S ... 9768108266

but options have always been more my thing.

I am too inexperienced in spread trading to comment on it.

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MightyOne
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Postby MightyOne » Mon Jan 04, 2010 11:42 am

More large chart money management to consider :shock:

Added new text after receiving questions from friends asking me to
clarify.
Attachments
Lotsize2-risk2.txt
MM for 8 hour + charts.
(1.05 KiB) Downloaded 165 times

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Braathen
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Postby Braathen » Mon Jan 04, 2010 12:30 pm

Thanks MO ;) that made it a little clearer for me too ;) Wish ya all the best for 2010
"Trading is the ability to see & to plan & to act; it is not crystal balls, precision entries, and ego stroking."
MO-

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leonyde
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Postby leonyde » Thu Jan 07, 2010 6:44 am

JESGPY wrote:Guys..

I have been testing this 1/6 range approach MO showed us.
Its very good. I have been testing it with 8hs charts on the London Open.
Its pays good returns most of the days. I use Spot forex to trade it. Binary options as MO says could be used, but the IG markets demo didnt offer me strike prices that yielded the Risk/Reward ratios the makes the Binary Options interesting.


Any comments by MO or anyones are apreatiated.

JUAN


Hi Juan / everybody,

I'm also studying binaries and playing around with this method. In theory it sounds extremely promising (the main advantage for me being that you cannot being stopped out - even with a very small risk).

However in reality things seem to differs a bit, because all "interesting" option are priced way too high to make the concept interesting. I have an account with both IG markets and Nadex to compare, and while Nadex offers more options, their price are not particularly better than IGM from what I can see.

I don't seem to see any option than are meeting the risk:reward ratio that have been talked about here. The only options that would match are the one out of the range and/or on the opposite side from where market is moving. In other words options that have a very low probability to expire in the money.

Taking the availlable options with an interesting risk:reward ratio, if you take a small risk in the hope of a big reward - something which *can* happen, but is likely NOT to happen. Looks like casino to me...


Am I missing something? Can somebody put me in the right way if I wrong? Because I would love to trade binaries that way... It would be just amazing!

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newschool
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Postby newschool » Thu Jan 07, 2010 1:20 pm

salut leonyde,
I'hv read about binary options and come to the same conclusion as you. The cheap ones at 20$, are usually the big reversal options. I think its those ones you wanna play, even if they dont a have a big probability to turn in the money, because the risk/profit ratio is extremely high.

See the 1st example here http://www.igmarkets.co.uk/cfd/binary-examples.html

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Postby frang0nve » Thu Jan 07, 2010 10:38 pm

In the 8 hours candle marked with the number 1, the entry level (1.5968) in the down side was violated (W1 candle red), then there was a big retracement.

When the price went out of the bearish channel marked by the parallel lines, I sold a binary option:

06JAN10 09:30 CET Binary GBP/USD to be above 15960 - Price 80.30
(GBPUSD price was about 16055)

I bought later the option:

06JAN10 15:36 CET Binary GBP/USD to be above 15960 - Price 66


Five minutes before i close the trade the sell price was about 54

and five minutes after closing the sell price was under 20! :(

In the eight hours candle marked with the number 2, I bought by mistake a binary option when GBPUSD was about 16000:

06JAN10 20:01 CET Binary GBP/USD to be above 16060 - Price 4

Eight minutes later I could sell it at profit when GBPUSD was about 16020:

06JAN10 20:08 CET Binary GBP/USD to be above 16060 - Price 8.30






Image


Cheers
Francisco

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leonyde
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Postby leonyde » Fri Jan 08, 2010 2:28 am

newschool wrote:salut leonyde,
I'hv read about binary options and come to the same conclusion as you. The cheap ones at 20$, are usually the big reversal options. I think its those ones you wanna play, even if they dont a have a big probability to turn in the money, because the risk/profit ratio is extremely high.

See the 1st example here http://www.igmarkets.co.uk/cfd/binary-examples.html


Yes I thought of that, but from what I see it seems that thoses binaries start at 50/50, 48-52 to be precise when it has a 50% probability to happen. What I see happening is the price of an option decreasing when it's probability to happens decreases. So when the option will reach 20 that would mean that price already went quite far in the opposite direction. The option seem to be available at that price only *AFTER* things happen, and not before as it should be.

I have to specify I am in the Asian time zone, so I start to see things from 1-2 AM GMT, while I usually start to trade from 6 or 7 (AM GMT).

For example yesterday on GU, there was one and more options available at that price after the big move. I could have bought the option GU to be > 1.6040 for around 20. But would you buy this after the whole move happened? When price is 100 pips away from the option, when the daily range already exceeded the average?

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leonyde
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Postby leonyde » Fri Jan 08, 2010 2:44 am

To follow with Francisco's result here is what I did yesterday:

120$ in binaries, around 60 points:

- Sell GU to be above 1.6020 @ 30/40
- Buy GU Down at 70 something

(not related)

- Buy UJ Up at 80 something

I closed all of them at the max profit (0 or 100)


At the time I was shorting GU in spot on the daily following the MO's guidelines (range /6 etc):

+57 pips


So in both binaries and spot I did around 60 points for the same thing at the same time (except that UJ trade). I opened the binaries following the logic of my trade in spot...

In spot I risked around 20-25 to make around 60, a risk:ratio of around 1:2

In binaries I risked 235 to make 60 points, a risk:ratio of around 4:1

1:2 / 4:1, hummm?

(I did the opposite to what we *should* do in binaries though.)

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