5 Minute Binary Options Success Story


#12

Gnayler, can you PLEASE help a newbie like myself to better visualize this?? I am sure you know it backwards and forwards, but I (for one) just can’t understand it.

Thanks,…


#13

Drew, it sounds like you have a problem understanding the basics of binary options. I recommend that you do some reading so that you can better understand the terminology I am using. http://www.investopedia.com/articles/active-trading/061114/guide-trading-binary-options-us.asp


#14

I know about everything in that link. There is nothing in there having anything to do with what you are talking about.

Just as Darrell asked you to post more details, so was I…just making the same type of request. I guess that is not forthcoming.


#15

Drew, if you know about everything in that link then you should understand that if I sell an out of the money option and let it expire out of the money I earn the premium that the option buyer paid. If I buy an in the money option and it expires in the money similarly I will be paid. I don’t know what kind of visualization you are looking for, perhaps you could elaborate?

As far as Darrel’s request for more details I believe I provided that by creating a spreadsheet with all the trades as well as a screenshot of my withdrawal. Is there something else you want from me?


#16

Looks like you have a good start over the last few weeks. That is awesome. The big trick is to do it over months and months as IV changes the system has to adapt a lot. Keep it up man. Still not using that scanner i see. Why did you take your account down to 300?


#17

Indeed, I will see if I can keep it up. The reason I took the account down to $300 was to reduce my risk. I then over doubled the account on Monday and withdrew another $343 to further reduce my risk. Unfortunately on Tuesday night I was taking too much risk and I made some seriously stupid mistakes (taking a position in the wrong market on accident!) and I ended up losing the $390 I had left in the account and then I deposited another $100 and lost most all of that as well. Right now I am slowing down and consolidating my gains, recently trading more with my small Forex accounts. I will probably put some more money in NADEX now that the $6402 hit my bank account today, but I am going to take it easy and start small to keep my risk low. I admit I haven’t taken a look at the scanner yet but I will now that the euphoria from the crazy gains I have had recently is wearing off after Tuesday’s debacle where I gave back all the gains I made on Monday.


#19

Not long Travis. That’s part of the reason why I took the money out. The goal of this particular type of strategy is not to compound the account consistently, as you rightly point out this is impossible with this much risk eventually I would blow up the account. The point is to make some money, withdraw and start over with a portion of the profits. I realize that I am risking the entire account when I trade like this, I will either lose it all or make a lot. Sometimes I do lose the entire account such as I did on Tuesday. That is why I like to keep the account small. Call it gambling if you want, but according to the US government if I were to lose money overall doing this I could write it off on my taxes so technically it is not gambling per the law. Thankfully I have been very profitable with my trading using similar high risk strategies in Forex, Futures, and binary options so I have some taxes to look forward to paying. Maybe you are right and I will eventually lose all my money but by withdrawing my profits quickly and keeping the accounts small I have thus far been able to mitigate that risk.

In terms of having a data set going back 5 years and all that of course I don’t and neither does anyone else; considering that these 5 minute binary options have only existed for less than a year, it’s a bit of an impossible standard, don’t you think?

As far as selling out of the money contracts I think you are confused. If the strike price is below the market then that option is in the money by definition. I don’t like to sell in the money options, I want to have time decay on my side when I take a trade, that’s why I typically buy the in the money options and sell the out of the money options when I see the bullish or bearish divergences forming on the 1 min charts.

Anyway I appreciate your input, and maybe I will even consider utilizing lower risk strategies such as you seem to be advocating. Based on your experience what percentage of an account do you think is reasonable to risk on any given trade?


#21

Thanks Travis, I see your points and actually my thinking is similar in terms of minimizing what’s in any particular account to just what I need to trade and comparing my risk to my overall risk capital.

That being said I really don’t see how a binary option with a strike price below the current market price could possibly be considered to be out of the money. What is the logic behind this assertion? I feel quite certain that out of the money means if the price does not change the contract will expire worthless. In the money means if the price does not change the contract will be worth $100 at expiration. This straightforward interpretation is confirmed by the article on investopedia which I linked to in my post above.


#23

All of that is correct of course Travis, but I am not sure what the point you are trying to make is. It is clear to me that the binary options that NADEX offers are by definition in the money if the strike price is below the current market price and they are out of the money if the strike price is at or above the market price. This is completely straightforward and frankly I am quite surprised by the confusion within the thread on this point as it seems so simple and obvious to me, even as a someone with limited experience. Basically since I want time decay to work for me instead of against me I prefer to either sell out of the money binary options or buy in the money binary options on NADEX.


#24

I just started using the scanner and now I know why there is confusion regarding in the money versus out of the money terminology. The scanner shows “ITM” on the sell side of a binary option with a strike price that is out of the money (the buy side shows OTM). I think this is the source of the misunderstanding. I guess in my mind I imagined that a particular binary option strike price was either in the money or out of the money depending on whether the underlying was above, at, or below the strike, but it seems that according to the scanner the sell side and buy side “moneyness” of a particular strike are opposite and listed separately. Hopefully everyone understands that when I said I want to sell the out of the moneys and buy the in the moneys what I meant was that I want to put time decay on my side, so I would sell strike prices that are above the market and buy strike prices that are below the market when I get a bearish or bullish signal.


#25

Indeed, I am strictly a NADEX guy…and the source of the confusion is now solved.


#26

All strikes are both ITM and OTM

If the market is above a strike the buy side is ITM and the sell side is ITM

Buy means true to the statement market above x strike at x time

Market at say 17000 with a 16950 strike


If the market is below at or below strike the buy side is ITM and the sell side is OTM

Sell means false to the statement market above x strike at x time (meaning the market it will be at or below x strike at x time)

Market at say 17000 with a strike of 17050


#27

This is a common issue with Deep ITM trading. Heavy win rate account runs up fast then can run down much faster. I do applaud you on making a withdrawal. Enjoy the rapid rise. Spend some of it and pay off some bills and have some money for the holidays. Also spend some time focusing on a more consistent gains builder of your account like directional trading with NTM spreads instead of binaries. https://forum.apexinvesting.com/t/izone-sharpshooter-set-up-and-rules/4415 This will help you get going.


#28

GNayler, are you still doing the 5 min binaries and is it still successful?


#29

They havent been back to the forums in over a year. So I wouldnt expect a reply :hushed:


#30

The part that confused us was your use of the terms ITM & OTM. OTM means the market has to move in your direction to profit. ITM, whether it’s a buy or sell, is more than $50 per contract. Those are the ones where you pay premium & collect it through time decay. I know this message was over a year ago & you probably know all of this by now, but I made this image to show ITM/OTM:

When you said buy an ITM & sell an OTM, I immediately thought you were buying & selling on the same side of the indicative. I’ve always wanted to try that, but there are a couple of reasons it doesn’t work. My idea was to buy or sell an ITM, and then go one strike beyond that & do an OTM. :slight_smile:

Bottom line: In Nadex terms, if you buy OR sell an OTM, the market absolutely has to move in your favor for you to profit… and if it doesn’t move early enough, it’ll have to move even farther due to time decay working against you.

I know what you were talking about now though. You were just using the wrong term for the sell. It’s still an “in the money” for the sell. SELL 25 means you pay $75 for a maximum profit potential of $25.


#31

I’m actually successful (so far) with my 5 minute binary strategy. It uses a supply/demand indicator that I found for free, plus a divergence indicator that I also found for free. I only trade the Asian session. I was 9 for 9. I lost for the first time last night. I think I want to absolutely limit my trading of this strategy to after midnight EST. Last night I was trading around 8pm-ish, and it seems like the market moves faster at times than 12-3am. Here are a few images from my wins:

I also won with some buys, but I just noticed the green zones were not on the chart below my entries… so it looks like I didn’t follow an important rule to my strategy. LOL!


#32

Another winner! I’m really getting confident in this strategy. It wasn’t threatened at all! I haven’t lost a single trade when I followed the rules. The only one I lost was when the market was right in between a support & resistance zone, so it wasn’t protected enough. Following my simple rules, I’m now 11-for-11!!! Just think, 10 contracts would’ve netted $202 after commissions in about 4 minutes! It sounds crazy, but it’s true.


#33

hey can you email me more in depth about your strat im wanting to trade more 5 min binarys


closed #34