I am assuming from this chart that if I am watching the market during these trades and they need to finish in the middle to be profitable which at some point over 17hrs they will be there, Then how can I lose?
<img src=/uploads/db0876/611/dbb3126481afe226.png">
Sorry for all the? just want to get this stuck in my head, I setup a chart usd/jpy 10min magnet, using the offset and 300 minutes to test on both hi to low and close to close but nothing shows on the right edge, is this because its a holiday and no trading today not enough data? Thanks, Robert
daytrade. I have not fired up NT7 today since all is holiday. may not be any info for coming daysā¦also sometimes you have to back off (reduce amount) of your offsetā¦atrader2 may have a better answer
atrader2, that chart is by far one of the clearest explanations of trading news with IBF.
I am going to start hunting them for longer term, as I do trade forex and stocks during the day so I am not always on the ball during news events if I am trading elsewhere that news is not about to effectā¦I like the long term set and forget tradesā¦and if you have a look at the stats from the other postā¦the ITM trades have a better r/r ratioā¦as long as your stops work. Although what I posted over there has a sickly high probability so far.
I especially like your method of getting triggered into them. I would be interested on further info on how you set a trigger price to get into each side sometime. Alsoā¦if one of your stops gets triggered before expirationā¦I see you dont close out other sideā¦or do you?
Robert,
Iām not sure I understand what you are asking here.
The price needs to be in between the strikes at expiration if its in between 6 hours before you not going have much profit the profit starts to accrue as time decays as binaries settle at 0 or 100 - this is how premium collection works say the market stays flat and you bought the bottom at $75, well that option if it stays above your strike will settle at 100 since you bought and the would give you a profit of $25 so the market can just stay stagnant and in fact thatās exactly what you want it to do:cool:
In addition you are going to get stopped out more than you think but its ok you dont need to a huge win percentage. Donāt do these trades without stops you will get burned and get caught up in a downward spiral.
Chaz,
I really just set the triggers based on the back testing we have done that shows for example the usdchf from 6pm 3am over the past year moves only 11 ticks open to close and only 22 ticks hi to over this time period then I look for a 40+ point spread of binary contracts and compare them to the Darrelās ranges to see if they outside the close to close and see how close they are to the high to low if too close to the close to close I donāt take that strike.
I really donāt ever close the other side if one side gets stopped out, the only time you may want to is if you get stopped out super early in the trade as there is a lot of time for the trade to come all the way to the other side and get your other stop as well, If you get stopped out later in the trade there is little chance its going to come all the way across to get your other stop so it seems to me that you just throwing money away of you close the other side early, I have not have not been stopped out on both sides yet. not that it cannot happen!
Hey atrader2, are you getting triggered IN to the trade? I know the stop trigger placement, but was wondering how you choose a price to get triggered into the trade. Do you set a trigger above the current indicative price to get into the lower ITM, and above the current indicative to get into the upper ITM? If that makes sense. If so, how do you decide where to set those triggers?
[quote=chazw661]Hey Rich, are you getting triggered IN to the trade? I know the stop trigger placement, but was wondering how you choose a price to get triggered into the trade. Do you set a trigger above the current indicative price to get into the lower ITM, and above the current indicative to get into the upper ITM? If that makes sense. If so, how do you decide where to set those triggers?[/quote]
Chaz,
When Iām setting triggers I donāt use the stop plugin as I do not want to use the indicative price for the entry, I want to use the option price so I use a Nadex limit order ticket and set the ticket to trigger on the bottom anywhere from about $75 - $80 and the upper $20 - $25 in some rare cases I go a little out of these ranges but not too often, I will say though when IV gets real low you will have to take some at $15 $85.
Hope that explains it for you, if not let me know Im here to help!
Best, -atrader2
Thanks atrader2, I setup 3 trades in demo this morning and forgot to add the stops, then i put team viewer on my cell and as soon as i left the house I lost my connection. after getting home I saw that all 3 lost $130!
Hi atrader2. Iāve been trying to execute Iron Butterflys around news events and I am having trouble. I donāt know what option expiration time to choose. For instance, if itās 10 pm today and a news event is coming out at 7 am the following day, should my option expire before the news event or after? How much before or after? Also strike width. I usually try to pick strikes that are +/- 1 deviation. I will even take less money just to get the widest spread that I can get. When I check my trade the next day, one side of my spread usually get blown right through. Iāve done 35 of these trades and only two have worked for me. I usually lose bad on one side or one side never gets filled.
[quote=daytrade1]Thanks atrader2, I setup 3 trades in demo this morning and forgot to add the stops, then i put team viewer on my cell and as soon as i left the house I lost my connection. after getting home I saw that all 3 lost $130![/quote]
Robert,
If you have screenshots that would be helpful.
I did not put any trades on this Friday as I really did not see any great pricing.
If you gonna do these IBFās you cannot forget to put stops its extremely important!
If you did 3 IBFās and lost all 3 I donāt understand how you only lost $130, that means you took pricing that was better 75 25 and therefore it would seem you took setups too narrow, if you got the perfect 75 25 you have have lost $150 roughly $50 per trade, and yesterday was a low IV day if there was anything to be had you probably would not have found anything better than 80 20 at best.
Were your strikes outside the close to close and how close were they to the hi to lo ranges? What instruments did you set them up on? what time did you set them up? what expiration did you use? what pricing did you get? If you have the screen shots post them so I can see what went wrong, but just off the top of my head yesterday was a horrible day for IBF and you had to of picked strikes too narrow.
David,
Are you trying to trade the IBF over news or into news?
#1 If you trading into the news, meaning your expecting the market to be flat until the new comes out, you would want to get an expiration that expires before the news comes out, as close as you can get the exp to the release but do not set up an IBF that is entered at 10pm and have an expiration on the other side of news release which comes out at 7 thatās a suicide mission there, if in this case with the news coming out at 7am and if you took the 7am exp you would have be there to manually close that trade out at like 6:55am, donāt get caught in that 2 min window before exp where you cannot do anything. I really donāt like the idea of having the exp that close to the release it could work out I guess but you should close it right before. The one I like better is like when the news is coming out at like say 11:40 am so then you can use the 11am exp with no real worries. I have noticed that GBP pairs are really flat going into major news a lot of time and ofter the releases are at like 4:30am so you can do the 3am exp.
As for selecting how far in advance to set these up, this will vary withe how much IV is in the market, there should be a fair amount but thatās fine to set them up at 10pm you just need to use the ranges (Have you been using them?) the ranges are going to tell you everything you need to know, when I use the deviations they are just a supporting level of analysis and if im doing less than a 20+hour IBF I donāt use then at all, the ranges are the most important.
#2 If you want to trade the actual news event with an IBF I would suggest waiting to set them up like 15 min before the event for the reasons stated in this chart. (if text is small in this chart hit ctrl + sign to enlarge you screen)
Per the info in the chart if you cannot find the same 120 point wide spread of binaries just go out further in time to get it, you will have to do this sometimes.
Then go out as far as you have to find strikes that are in good postion versus the hi to lo ranges, I would say of you going to trade news alot you should learn the Iron condor with spreads
, this is what DM trades exclusivly around and they are great for it, they are not all or nothing trades. The only time I trade news with IBF is when I can find a cheap strangle to put inside it, see my posts here: http://apexinvesting.net/forum/butterflies-218/eur-usd-double-strangled-butterfly-eur-usd-news-trade-2110.html#.VKgP7_ldW0ISo in summary be sure to have a plan are you going to be trading into the news or trading the actual news events as you can see from above you will have severely different setup times and expiry times, in addition you would a lot better off with Iron Condors over news in you cannot find a cheap strangle when putting the IBF on.
Hope this helps, if you have additional questions please let me know.
Best,
-atrader2
Actually looking back it was 170, and yes the strikes were 80-85, i dont think I did it right
here`s a screenshot, I cant seem to get the exp range box in the right place, the arrows are where I found the strikes.
Thanks!
Can you explain why you put the stops on a couple ticks before the entry? Also if you have time can you make a video of the stragle trade. Thanks!
[quote=daytrade1]Actually looking back it was 170, and yes the strikes were 80-85, i dont think I did it right
here`s a screenshot, I cant seem to get the exp range box in the right place, the arrows are where I found the strikes.
Thanks![/quote]
Robert,
Ok, first huge issue is the ranges, if you not getting the left edge of that box moved up to where current price is you may selecting strikes that are way off, this is so important get right, see this example on how to do it.
Hereās what im talking about with nit having the offset right:
If you donāt have the offset and ranges in right place you are going to be picking the wrong strikes.
Let me know if you have any questions.
Best, -atrader2
[quote=daytrade1]Can you explain why you put the stops on a couple ticks before the entry? Also if you have time can you make a video of the stragle trade. Thanks![/quote]
Robert,
I only put the stops a few ticks inside the strikes when trading more volatile markets or time periods, this is because the stops work on the indicative price which lags a little so if a market moves very quickly though one of your stops the indicative is going to take while to catch up therefore the binary price could be way past $50 it could be $60 or $65 by the time the indicative catches up, its directly tied to how fast or slow the market moves, like when I trade slower less volatile time periods i just set the stops at the strikes as usually when my stops get hit at these times price is moving rather slowly so the indicative is pretty close its not lagging that far behind, if you look at my weekly results I rarely get stopped out at more than $54 it usually like $52 or so.
Are you looking for a strangle video on the the basics of a strangle or for what Chaz has been working on?
Thanks for the help so then in this pic, which box do I use the 1st or 2nd one to pick the strikes? Just a video on strangle setup i guess for news or?
[quote=daytrade1]Thanks for the help so then in this pic, which box do I use the 1st or 2nd one to pick the strikes? Just a video on strangle setup i guess for news or?
[/quote]Use the box that the arrow is pointing to.
DM should have some of those videos on the site or youtube but im going to try to do a Vid on my stangled IBF.
