Binary Trading. John Piper
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Название: Binary Trading
Автор: John Piper
Издательство: Ingram
Жанр: Ценные бумаги, инвестиции
isbn: 9780857191403
isbn:
The a-b-c rally I have labelled as “4” is of note as that signalled the fifth wave decline which was essential for the profitability of my trades.
After that it was simply a matter of holding on for the ride.
Charts of the bets
I am now going to look at the charts of each bet in turn. I usually trade with IG Index which provides by far the best range of binary bets and I must thank IG for these charts which are available from their website.
FTSE to end down
I will start with the bet I passed on: FTSE to end down. Here is the 5-minute chart:
Chart 1.3: FTSE to end down
Although I passed (as I did not want to pay 40 for this bet) it was a clear winner and expired at 100 at the close. I know many traders are happier taking more certain profits and in this context the price of a binary bet does reflect the probability that it will be a winner. A bet at 40 can be said to have a 40% chance of success. The art of binary betting is to pick bets that cost less but still go all the way.
FTSE to end down >50
For example, I paid 11.4 for the bet FTSE to end down >50 and I would say the odds of a decline of 50+ points were much higher than 11.4%. That is where my indicators come in. If they have any value they allow me to buy a bet at 11.4 where I think the odds are nearer 50/50.
The chart below shows the 5-minute action on this bet:
Chart 1.4: FTSE to end down >50
Of the three bets I am looking at this was the pick of the bunch.
Why?
Because it went all the way to 100 and it was cheap to buy! It cost 11.4 and went up to 100 offering a return of 777% on the amount at risk
In fact I generally prefer bets like FTSE cash low to be <-100 because as soon as FTSE hits that level (i.e. sees a low more than 100 points below the prior close) the bet expires at 100 and the profit is secured. A bet FTSE to finish… is always less certain as whatever FTSE might do during the day, its actual close is always uncertain. For example FTSE may go 100 points down and then close 10 points up.
For this reason I am more prone to take profits on these bets at some point during the day – especially above 80 (on a bought bet). I see no point in risking 60 odd points of profit just to try and get 20 more and this is especially the case as the close looms.
FTSE cash low to be <-100
The chart below is of our final bet FTSE cash low to be <-100 and this bet gave plenty of profit potential but did not go all the way. I bought in at 8.9 and you can see from the chart that the bet went up into the 30s just after 4pm. That is a potential return of around 200% on the risk incurred.
Chart 1.5: FTSE cash low to be <-100
All in all a good day’s trading on FTSE which illustrates quite well the way in which I approach markets. I did not get out at the best levels on either bet but the end result covered the cost of those gold earrings and I am most certainly not complaining.
If you want to see the video clips I recorded as I made these trades please visit my website at:
Summary
In this chapter we looked at:
Preparation before the market open
The risk/reward on different binaries
Adverse moves and why they are not so important
The importance of exiting well
Some basic chart reading
The cost of prawns in Phuket
2. Trading Strategies
Now that we have seen binaries in action in the real world I want to look at a few basic strategies you may wish to adopt when trading binaries. It is these strategies which will form the basis of how you trade a day like Monday 26 November 2007.
This is where we start our journey into the Aladdin’s cave of binary betting!
Basic strategies
It is important to note that there are many different ways to trade binaries and it is those approaches that few other people have thought of that might prove the best.
In writing this book I see my task in two parts:
1 My primary function is to explain how binary bets and these strategies work. (Albeit I covered the basics in Binary Betting; my first book on this subject.)
2 But a secondary, and in some ways more important, function is to get you thinking about how you are going to use these instruments in your trading. Simply put, how you are going to make money?
So the following ideas are designed as examples which you may wish to expand upon. Ideally, come up with further ideas and add to this list.
We will look at strategies of the four following types:
1 Buy near certainties – If you buy at 80 and above you will most often win.
2 Buy very cheap – if you buy at less than 15 you have the potential to make five times your money if you get out at 90 or above.
3 Buy low and trade the position – perhaps for a few points a day.
4 More complex strategies – these may involve using binaries along with spread bets, futures and/or options.
Before I look at each of these in more detail I also want to set out a number of ways in which you can approach each of these ideas.
Different approaches to a strategy
Here are three ways in which to approach binary bets:
Systemise an approach and trade it mechanically [this is covered in detail later in this book].
Use СКАЧАТЬ