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  1. #1
    Active Member

    Worst Strategies in Binary Options !!!

    Please add to the list if you can and describe.

    1. Going Countertrend - If the market is not going the direction you speculate, it is better to change your mind than stubbornly lose more and more trades.

    2. Leveraging a bad position - I have made this mistake more than I can count, and while on paper it seems SO EASY to avoid, I can't believe how hard it has been for me to over come this. Let's say you have strong technical indication the market is going to drop, so you put in a PUT. Instead the market goes UP, but because your technical indications are showing that it should be going down, you put in another PUT. It keeps going up, and up, and up, at this point you have lost twice as much as you wanted to risk. Which leads me to the next.

    3. Chasing your Losses So let's say you've lost 20% of your portfolio in a bad string of calls or puts. The last thing you want to do, is even think for a second that you can get your losses back, and increase your risk trying to get it back. Which leads me to..

    4. Doubling Down - This isn't some newbie mistake, it's not some inexperienced person mistake. No, people have collectively lost over a billion dollars in hedge funds by leveraging bad positions and doubling down. Just take a look at this story of how one highly esteemed professional trader lost over 5 billion dollars.

    Final note: The Market is not your friend, it is filled with landmines, traps, and cliffs. My only piece of advice is to really understand who you are and PREPARE *NOT* for how you can beat the market, PREPARE *NOT* for how much profits you are planning on withdrawing next month, but PREPARE how you will handle a bad position! Only you know yourself, and don't kid yourself either. Understand your own personal limitations and make sure your FUTURE-SELF has everything he needs to limit his losses.
    Last edited by tonechild; 04-13-2014 at 03:34 PM.

  2. #2
    Specialist Member RCox's Avatar
    I think this is a great idea for a thread but I completely disagree with point 1. I have made most (almost all) of my gains using this strategy and I think it is the only real approach to take in the Binary Options market.

  3. #3
    Master Member SeasaltMcFish's Avatar
    I'm also mostly a reversal trader and feel much more comfortable with it.

  4. #4
    Active Member
    Thanks guys, I changed the first one from reversals to going countertrend. I'll keep the list updated as we go along.

  5. #5
    Master Member Bogdan G's Avatar
    Isn't that the same thing? Btw, I also disagree with point number 1, whether it's called "reversal" or "counter trend" trading, but I respect your opinion.

  6. #6
    Master Member SeasaltMcFish's Avatar
    @Tone

    Maybe you point at chasing losses in point number one too, meaning trying to force a win by adding more and more trades (expecting 'sometimes' the trend must end) when your reversal setup failed? Or am I wrong here?

    If a reversal setup doesn't follow your conditions anymore, it could indeed be wrong to keep on opening new trades. I do have a maximum amount of trades on a reversal setup and a signal that the setup isn't good anymore.

  7. #7
    Active Member
    Yeah I must be doing something wrong but I get screwed on reversals. Like usually if I have strong reversal signals it turns out to be a breakthrough instead!!!

    Maybe its not worst strategies.

    Going countertrend and going for reversals is the same thing, but yeah maybe I'm wording this wrong, but isnt going countertrend a bad idea most of the time? Unless you're in a ranged market?

    I think I can make the first one a bit more clear:

    What do you think of this:

    Counter Trend: While going for reversals on a ranged market can work in your favor, it's a bad idea to go counter trend if you're not in a ranged market.

    Something like that?


    Might be just me, but I really have a hard time with reversal strategies.

  8. #8
    Master Member Bogdan G's Avatar
    Why change the wording, man? After all, it's your opinion and it doesnt have to fit everyone. So if you dont like counter trend trading, you dont like it and that's that. It's your thread, your opinion

  9. #9
    Active Member
    While I love to express my opinion, I'd like this to be helpful for everyone so I want to make sure we have a good list of actual bad strategies rather than just a list of strategies I don't like.

  10. #10
    Master Member Bogdan G's Avatar
    You see, I believe that a strategy which doesnt work for me can work for you and vice-versa. For example, I had success with counter trend strategies (and so did others in this forum). So I dont believe there's a clear answer to Number 1. The rest (2, 3 and 4) are indeed bad approaches and can dry your account.

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