Tips for Binary Traders from Fellow Traders


  1. There are two principal binary betting providers; Binary and IG Index.
  2. It is a good idea to try your hand at spot forex first before considering binary trading. This might sound like a contradiction on my part, but binaries requires that you understand the TIMING of the Forex market (as well as its volatility patterns). So pay close attention to volatility and try to be on the right side of it (especially with regards to pricing).
  3. Patience is the most important attribute. Always, always exercise patience. There's always tomorrow. Better to miss out than to lose money. I have found there is only one way to learn this...lose money.
  4. Start slow and steady: Start by selecting relatively modest winnings because this keeps the cost of the bet to a minimum. Will be nothing brutally honest with you guys because if you do this, you *will* make mistakes at some point. You will read a binary wrong, you will bet down when you meant to bet up, you will forget...etc. You can increase the amounts as you become more experienced. Never bet all your pot, there is no need. Slowly and surely will serve you much better.
  5. Risk/Reward all depends on the price you take at the time you enter the contract. The higher the price (say 82 - 88) the better the odds, in theory, of the target being hit. The risk is high compared to the reward and I only take those sorts of trades early in the trading day on the close above type binaries, when my assessment of the charts gives me solid indication that a Support level should hold. The lower the price (say 45.5 - 51.5) the greater the chance - in this case 50/50 - that the target won't get hit. Your risk is lower but the reward is greater IF the touch is made (this is for the one-touch contract).
  6. I trade anywhere between £1.00 and £10.00 per point depending on the potential risk/reward situation and depending on how I've performed for that day. If it's going well, the trades will tend to increase with confidence. If not, the trades decrease. (note this is the reverse of doubling up on losing trades). I have a simple target of 25 points a day. Sometimes I'm well over, sometimes near to it but sometimes I'm negative. Today I lost 12 points, Friday I won 34 and tomorrow, well that's another day and we'll have to wait and see.
  7. Betting on weekly (or daily) binaries is quite risky. Options prices are affected by multiple factors (not existent in spot or futures), with the most important one being TIME. Time can kill a position if you've measured wrongly.
  8. I never double up or trade an amount that would give me serious heart palpitations. It appears to me that a lot of people seem to trade big numbers to get 1 correct trade and take the rest of the day off. You should trade regularly with smaller amounts and try to maintain a constant flow of winning trades. This builds confidence and reduces heart rate.
  9. I never trade during the first half hour on an hourly as more often than not, due to time frame it will move against you.
  10. Maintain an open mind and try to make reversal trades as well as backing the favourite. Too many times I see traders doing nothing but going with the favourite.
  11. Watch the market very carefully. If it's a whipsawing day, trade more reversals but if it's a day when it's trending, back the favourite.
  12. Have several accounts and if one goes down then you can open another trade with another firm in the opposite direction thus effectively closing your winning trade.
  13. Always close a trade close to the extremes and don't wait for expiry unless you are 100% sure. That last minute can be a bitch at times.
  14. Set strict stop losses and never leave a trade unattended. As an example though not always, if I am buying at 80, my stop might be 60 so it's an equal trade I will either win 15 - 20 pts or lose 20 pts but better to lose 20 even if it does climb back up after you're out than 80 outright.
  15. Newsfeeds are great for reversals. FTSE 1-2 is great if big US news is due at 1.30. Open your trade at 1.28pm'ish.
  16. We all know that binaries are manipulated in some way or another. Just remember to use this your advantage. I never trade the FTSE frenzy as my fingers have been burnt too many times.
  17. No binary betting firm offers stops so you just have to watch it and close the trade at your stop level manually. Discipline is the key. It's so easy to watch it fall through your stop expecting it to reverse back up. This can happen but in my experience, it usually doesn't. If you allow it to fall through your stop expecting a reversal, you are gambling and gamblers never prosper. If you are stopped out, it might mean the pattern has changed and therefore, it's time to revaluate and re-adjust your thinking and plan ready for the next trade.
  18. There is always another deal, in the next binary. The next hour, day, week, etc. Binary hourlies for example. There's no point getting in at 10 mins past the hour or 30 mins past because the strategy is wrong. There's too much fluctuation and chance involved and invariably you could get it wrong too often. Don't get in too early and if a trade is not there don't punt it. I have traded nothing these last 3 weeks I have just watched and I will continue to watch. It is not the end of the world to miss a trade.
  19. Most of the time, the binaries are priced against you and its more like going to a casino to gamble your money away. Spreads are usually too large for scalping. Every so often though, you can find a binary with a huge payout and high probability. This usually happens when the bet is close to expiry, at a solid support/resistance level or long bets which are priced very cheaply. In those cases, risk/reward can be as high as 1:9.
  20. Like all trading, money management applies to binary options as well. Just don't risk more than 3% - 5% of your account per trade. Trading is 10% strategy, 10% money management and 80% discipline/self control. You can't get wiped out fast on binary options unless you LET yourself get wiped out fast.
  21. If you're making money with binaries, then by all means be a binary trader. If it works for you, then nobody can tell you wrong. In the long run you can only profit with binaries if you're already a pretty profitable trader anyway. It's a great way of optimizing profits but if you can't trade normally, you will most likely find it difficult to be consistently profitable trading binaries.
  22. In my book, options are a great instrument. It is just the matter of capital allocation that makes all the difference in the world. And in that allocation, binaries take only a percentage of the capital I have for options trading. Building your option pricing model is also a plus....
  23. To sum up, it's really about your personality type. There is no right or wrong way to do it. You've just got to concentrate on your own method and what feels comfortable for you and understand your method and chosen timeframe thoroughly