Way to Trade Binaries


#1

Darrell,

Decided to change my question. What is a good way for a person to do a low risk trade, who is just trying to make 20-25.00 extra?


#2

Define low risk?

Probability? Or dollars?

Butterflies if exited if strike hit risk about 25

Epc trades if strike hit risk about 25

Trend premium collection risk about 25 if strike hit

Many news trades only risk to 40 for a 1:1

Most apex pattern spread trades ok Nadex risk about $25

[quote=sharpie]Darrell,

Decided to change my question. What is a good way for a person to do a low risk trade, who is just trying to make 20-25.00 extra?[/quote]


#3

Darrell, thanks! Would a buy at 40 sell at 60 be a good trade for certain markets?


#4

I don’t buy OTM binaries that often so I would not do what you are suggesting

Your risking $40 to make $20 with no real ability to have a stop loss since the binary is starting OTM


#5

Thanks, Darrell!


#6

The strategy I’m testing right now is OTM binaries on the indices for the US open. I want to buy @ 5 & sell @ 95. The market only has to move a couple of strikes to be at a 1:1 ratio, assuming it moves fairly early. The more time it takes, the farther it has to move due to time decay. Eventually I want to be trading 30 contracts. Each side would be $150, plus $9 per side for commissions. The total risk would be $318. I would set my T.P. orders at $21.50 and $78.50. If one is hit, you would pay another $9 in commissions. The end result is LITERALLY 1:1 after commissions. You’re risking $318 to make $318. I’m trying to figure out which of the indices is the best for this strategy. My testing shows they’re pretty much even through time. Another problem I’m trying to work out is which contract - 8am-10am or 9am-11am??? You get closer strikes on the one expiring at 10 (I’m getting in just before 9:30). The 11am contract has to move farther, but it has more time to move… and the indices like to reverse, so I could T.P. on one side & try to break even on the other. Has anyone else considered something like this? I don’t like paying $20+ for binaries, because they’re higher risk & you can’t do as many contracts.


#7

Keep us updated as to your findings on these trades. YM , Tf, and NQ can all move pretty good in the AM open time. Would need do some side by side test using the 10 Am and 11Am over some time to see which is best! Let us know your findings