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  1. #1
    Rookie Member

    Hot Adam Stone - Personal Trading Strategy !!!

    Hi Everyone,

    So despite the fact that these days I am a broker and therefore not trading binary options, I was in fact a long time market fan and avid trader of multiple asset classes and different styles.

    This forum seems to be really appreciative over anyone that shares some good info, so below please find from me a simple mathematical based strategy I have been tinkering with for a few years now. In some instances it works like a charm, other days it is really not working right

    Anyway, I thought I'd post it up here and see if any of you have some feedback on it, or perhaps can help me improve the damn thing/prove that it can work for a majority amount of time. I know there is no future telling or perfect cure to winning, well that's basically why I'm a provider in the first place But, I do believe sincerely that with the right approach anyone, especially beginners can see success, especially if you can cut silly emotions out and base decisions on math and instinct only...So without further ado, here it is

    Basic Idea - With Binary Options Trading, an investor is able to know beforehand what his potential gain or loss is before he invests his money. In fact, he has two possible outcomes for his investments:
    1. If the binary option expires in the money (winning trade), he will receive a fixed predetermined payment between 60% to 85% return on his investment depending on the underlying asset that he is investing in and the platform he is trading on!
    2. If the binary option expires out of the money (losing trade), he will lose the money he has invested on that trade, unless the platform he is trading on has a rebate % (money back on losing trades). Certain platforms will offer up to 10% back on a losing trade!

    The following strategy I designed personally as a “toaster” style solution. The main aim was to create a simple step plan in order to place a trade at any time, based on trading an hourly High/Low binary option. Check it out, test it out, use it, and abuse it! Do whatever you like with it, I can tell you personally that it has just started to work well for me over the last couple of years or so and I do plan to keep tweaking it and using it moving forwards, at the very least sharing it as a training/educational tool for my clients and contacts!

    Pick an asset paying 70% – 85%
    Go back on pro charting to four hours previous (not including current hour)
    Write (with a pen and paper!) in one line the highest price, per hour. Underneath line of four numbers do the same with the lowest price, per hour.
    You should end up with something looking like this;

    EUR/USD Example
    1.32000 | 1.32125 | 1.32450 | 1.32725
    —————————————
    1.31870 | 1.31900 | 1.32150 | 1.32250

    Now you can see the overall trend by looking left to right. The trend will either be an upwards/downwards/sideways

    I strongly advise here to get the average high and low price using the following the formula of total prices added together divided by amount of hours. Now we make a prediction for the hour ahead based on the last hour high and low + any economic factors to come (economic calendar and news) + our average high and low price (the average prices being used purely as an anchor in our minds as to how strong the movement has been along with the average prices as the asset has moved in its most recent history).

    If the asset has been moving up, I am placing “CALL” trades only, basing my decision on overall direction for that movement on the last few hours’ movement alone (that’s right, no indicators or extra charting etc.) From there I target an entry price for my “CALL” based solely on the last hour’s price. My reasoning is that by getting as close to the last hours low price as possible (taking into consideration that the asset has been moving up in price and the next “low” price should be above the last hours low price), that I will have minimal risk involved, and obviously if the damn thing keeps moving up my trade is priced in at the best possible level.

    For a downward trending asset, I do the same only in reverse. I am making “PUT” trades only and basing it on the last hours “high” price!

    Now for a sideways moving asset (something static/nonmoving) there is in my mind only one way to trade it. Wait as long as you can in the hour (until just before the cutoff point to make a trade) and attempt to target the highest/lowest price you can see, that fits into the last few hours prices. So for example, if the EUR/USD has been sticking at 1.31200 for the last few hours, I will attempt to “CALL” at 1.31150 and below, or attempt to “PUT” at 1.31250 and above.
    As for the amount of trades to make, the best results I have seen have come from trading just 3 trades in a trading session of 1-2 hours. This limits a lot of negative factors involved in trading and also means we can directly see our win/loss ratio clearly along with any mistakes we have made!

    Aim for 2/3 wins and you will achieve 66% win/loss ratio, more than enough for a nice layer of profit. Average out better than that and you are laughing all the way to the bank!

    So truly that is about it, nice and simple. Uber basic, uber simple. Very "toaster" style as promised. For those perhaps that have read this far that don't know all of these things as perhaps some others do, or at least the language and certain vocab I have used, please find below some further useful info from me;

    Key Strategic Points
    • Using support and resistance lines
    • Using technical indicators
    • Using the current trend
    • Using instinct

    Support and Resistance levels can be identified by trend lines. Some traders believe in using pivot point calculations. The more often a Support/Resistance level is “tested” (touched and bounced off by price), the more significance is given to that specific level. If a price breaks past a support level, that support level often becomes a new resistance level. The opposite is true as well, if price breaks a resistance level, it will often find support at that level in the future.

    Technical Indicators can be based on volume, breadth, price, overlays, types of charts and concepts. There are many thousands out there. If like me you like to keep it simple, then you may enjoy what I use. For my Binary Option trading I stick with a basic moving average line along with some instinctive hand drawn support and resistance lines and when I have the energy I add the basic price channels (gives you a stepping guideline of price movement – Nice visual!)

    Current Trend in trading terms will be classed as “Bullish” or “Bearish” which will describe an upward and downward movement. Traders identify market trends using technical analysis, current price, indicators and gut instinct. My personal view is that most of the time we move into a “prediction” mode, always trying to say where the trend will be, rather than deciding what direction the current trend is in. For Binary Option trading it couldn't be easier. Look at the last four hours of price movement. If the price has been going up it’s a bullish! If it has been moving down it is bearish! Anything else is classed as static or sideways. In any case making a Binary trade is simple. Target the high or low price depending on the trend. If it has been moving up make call trades at the support price. If it has been moving down place puts at the resistance price. If it has been static and sideways try to catch it from the extremes, the highest or lowest prices you can find

    Instinct in my eyes is the key. It is like buying a house, if you logically look at all the aspects as to why you buy a house, then you are left with many factors that will determine as you logically work through them if you buy the house or not. My question is, even if the house ticks all the right logical boxes (location, size, cost, area etc.) will it make you happy? The real truth is only an instinctive judgment call will give you that answer. Trading is so similar. We as traders logically add indicators, we work out the trends and we use technical analysis but again, even if all those logical steps are done we are not guaranteed a single happy result. So, what is my advice?
    Feel the trend and movement, ask yourself if you feel it is up or down. Follow that instinct because even if you lose the trade you can be happy in the knowledge that your feeling guided you. The way to improve is simple. Dissect any losing trade and work out what could have made it a winner! Most of the time it is timing or trade amounts/frequency of trades that do us in, not the instinctive feeling. Most people have no problem winning trades, it is the personal management that lets most down by getting too excited and making the wrong choices on amounts per trade and amounts of trades. Trust your instincts and work on improving!

    I would relish some feedback from any that made it through. Good bad or whatever, for me I love to talk market and banter, and I love trying to find the golden trade strategy, even if I know inside there just isn't one, at least as long as your name isn't Warren Buffet or something

    As always I am on skype/phone/email, not sure if I put my info here or not, so I'll just put it and I can remove it if needed, mods please let me know.

    -----
    Best,

    Adam
    --------------------
    Adam Stone
    COO & VP Operations
    Skype: Adam.Stone.GOptions
    Site: http://www.goptions.com

  2. #2
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    Interesting.
    One thing that other strategies often lack is their lacking ability to work in binary options. This strategy seems to have good potential of working in binary options with hourly expiry. At this time, other than general cons, I cant think of any specific weak area of this strategy except that it is not for beginners. Because it will definitely need knowledge of S/R levels and economic indicators in order to avoid any unexpected move. It is following the rule of "trend is ur friend".
    I will try to test it and share my experience.

  3. #3
    Rookie Member
    Hey M.J

    Thank you for the kind and honest feedback.
    You are right about the beginner side. Thing is at least in the last 2 years or so, perhaps due to tech connecting us all better and social sharing tools, most "beginners" these days know a hell of a lot more than perhaps we did when we were "beginners".

    I'll definitely side with you that you need more knowledge than normal to really really get this strategy and use it.
    Just goes to show, that even when trying to make something as simple as possible it can still get complicated

    Really looking forward to hearing how it goes for you.

    Best,

    Adam

  4. #4
    Veteran Member Dan21's Avatar
    Hi Adam,

    Your strategy looks too general to be strictly followed and that’s why it is not a strategy but a set of general rules for trading binary options. Also how to define support, resistance, extremes – all these elements need a lot of knowledge and experience involved. From your experience as a trader could you say that this or other similar strategy is working for you in the long rum, i.e. producing positive return on your investment?

  5. #5
    Rookie Member
    Hi Dan,

    My thoughts on trading probably go against what most will preach out there, and I have that sick and mostly twisted view on trading probably because I run trading platforms. So rather than being able to be a dreamer and beleive the hype, I see the real results from thousands. From what I see, most are having a very tough time gaining any sort of consistent results.

    Hence my theory/toaster style method I posted. My feeling is that you are best and safest when using basic math to guide you. That's true for personal account management (how much risked per trade/day/week/session etc) along with your entry and trade prices you take (again basic maths pre determining the optimum points of entry and trading).

    Truly Dan if there was even a remote possibility or potential for a true winning long run system we would all know about it by now, or at least we would be watching the guy who is using it and not sharing it with fascination Truth is, things can be made to be extremely simple.

    So, rather than quote other systems I see and try to use I will ask you a simple question. Why do we make a trade in the first place? I want the simplest reason possible, and that my friend is because we feel the price is going to go up, or we feel the price is going down. That is the brutal honest truth that most ignore.

    All the technical and fundamental indication that we use and add on to it, simply makes us feel better about our initial instinctive feeling The crazy thing is, its so bloody true it can hurt! The fact is not one single indicator alone guarantees success, neither does any particular combo of indicators. Sometimes we stumble across something that works for a time, very much like my method above, where as other times it doesn't work at all, reason being the market price is a wild animal, uncontrollable and unpredictable.

    However, my view and I hope you trust in this seeing as I am the horrible bastard that wins when others lose, is that basic math is all you need in every way imaginable. Basic math means you dont over trade, it means you dont over risk, it means you get optimum entry points and prices, and most importantly it allows you to go back and dissect old closed trades to work out what you did right and what you could be doing better.

    ****Even though my opinion on it all is super strong and rooted in plenty of history I am always willing to have my view changed and to learn something new from others. Best advice from me is leave any pride you have at the door, and remember always that we have two ears and one mouth for a reason

  6. #6
    Specialist Member TAllen1429's Avatar
    Hi Adam,

    I hear what you are saying and you are definitely trying to define some complex issues well.

    My major concern is this. I do not think that binary options trading can be based on gut instincts and feelings.

    The reason for this is that the odds are simply not in the trader's favor.

    As wins produce 65% to 85% payouts while 'out-of-the-money' results generate 85% to 100% losses, a trader needs to achieve a win-to-loss ratio above 55% just to breakeven.

    The only way that this is possible over the long-term is to define, test and perfect some method or strategy that is capable of achieving such a performance.

    This is by no means a simple task as the financial markets are subjected to a gigantic number of stimuli.

    I do agree with you that the basic cornerstones fro such an approach is to minimize risks and be able to identify quality entry positions.

  7. #7
    Rookie Member
    @TAllen1429 I really enjoyed that reply, it was relevant sharp and for the most part spot on.

    Just to be a bit of a pain, I want to ask you a question.
    If binary or other forms of trading are not founded first on gut instincts and feelings then what? And if you can answer that Surely we would all be using that "what" to trade and win consistently.

    I dont want you guys to think I am belittling real traders or what it really takes to develop, test and run certain strategies and systems. It's just that I'm always left with this feeling and instinctive pull that truly the best way to trade is by tapping into that particular instinct when asking yourself do I feel price is set to move up or down.

    Can't find it now which is annoying, but I love the scientific style reports and tests that happen here and there. I read one recently getting under 5 year olds to predict chart patterns. This particular group were given 10 different price charts on a page, and their reactions (positive/negative) were monitored. Charts that they felt good about/happy about for the most part went up in price, charts they felt sad/unhappy about went down in price! Seriously it's stuff like that in particular that drives my brain crazy.

    I guess being a bit outside the box is my style, others do well with a really strong and coherent structure...To each their own there. Still I cant get my mind past the point that truly if we wanted to a feeling good or bad could make or break a life/career/balance

    Food for thought!

    Best,

    Adam

  8. #8
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    I have a little different view about strategies posted by people on forums. Criticism is always there but we have to see positive side too. In Adam's strategy, I found that it has potential of working in binary options. But it doesnt mean "start winning immediately". I think it will need a lot of work to adopt this strategy. This adoption process is different for everyone.
    I like the simplicity in this system which can be a good base to build our own strategy.

  9. #9
    Specialist Member TAllen1429's Avatar
    Quote Originally Posted by M.J View Post
    I have a little different view about strategies posted by people on forums. Criticism is always there but we have to see positive side too. In Adam's strategy, I found that it has potential of working in binary options. But it doesnt mean "start winning immediately". I think it will need a lot of work to adopt this strategy. This adoption process is different for everyone.
    I like the simplicity in this system which can be a good base to build our own strategy.
    I think what you have just said is what I was trying to do as well.

  10. #10
    Rookie Member
    Still playing with this one, managing to have some success with very short term trades but unable to work it right at 30 mins and more. Getting very frustrated...

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