I got to know binary trading after investing in a crypto project aiming to dirsupt the industry by introducing a new broker less concept. Nothing predestined me to trading, as I’m a risk adverse person. But, I guess, in life sometimes things just happen, unplanned. I will share what I’m doing as I progress. I’m almost nowhere in the learning process, so I’ll probably write a lot of stupid things, like in a journal. If you are an experienced trader, don’t hesitate to share your observations in the comments section.
Getting to binary options
As a crypto investor I started a trading course to learn technical analysis so I could time better my moves. I did not plan to trade. But as I progressed in the course I started to like what I was learning. I have to provide my tutor with some successful trades based on the strategies they teach. So I had to trade anyway.
I could have chosen to trade with a demo account. But I don’t think it is meaningful, so I wanted to go with real money. Of course I bet very small amounts. As a beginner I don’t want my learning process to cost me a fortune (actually thanks to this special BSB offer my digital options training course costs me virtually nothing). With Spectre you can bet as low as 1 dollar (more details here). Today is my first day, and right now I’m forbidden to trade as my account is locked. Did I lose too much ? I would have expected that. But, instead, I reached my maximum winning streak of 5. Don’t worry, I’m not claiming victory. This is beginner’s luck. That’s why risk management is so important. We’ll talk about that later, now let’s see the first binary option trades I made on a live account.
Binary options trading as a beginner: a bad start
First trade: I hate pipettes
I started the day with 2 losses. The first one was quite frustrating, I lost for… 3 pipettes, or 0.3 pip. I wanted to play a Bollinger bounce on EURNZD, but it seems I set my call option too early. If I had timed better my trade, those 3 pipettes would not have mattered I guess. Oh well, losing is part of the game, especially at the beginning.
Second trade: horrible
For the second trade I chose a longer expiry, one hour, this time on eurusd as I had the feeling some upward momentum was building. It went well during the first 20 minutes, then it collapsed. No pipette to blame for being OTM, I lost by a wide margin. Very wide.
Third trade: introducing Sir Martin Gale; now I love pipettes
Even if I trade ridiculous amounts, I can feel a bit of frustration. Just a bit. I know that I have to tame my emotions when trading, but it is incredibly difficult. So I did something that I shouldn’t have done : I « martingaled », or doubled down. It worked. Still, it was a mistake.
Instead of continuing my attempts with Bollinger bounces, I used after that a “strategy” derived from my charts observations since I started my trading course. It has maybe a name, but I don’t know it. I call it « trend surfing ». Once I see that a trend starts, after a reversal or not, especially when the MACD signal line crosses the moving average one. I noticed that in these setups a trend would last for 5-20 minutes, and it is pretty reliable.
My first try with this new “strategy” happened again on EURUSD pair, even before I lost my second trade as I could see that the momentum was going south. So as I said I doubled down my stake on a put with a 10 min expiry. I won by a small margin, again 3 pipettes. I might have thought after the first trade that the platform scammed me by gaming the chart so that I lose. This is the proof that there is not such manipulation here.
I finally got my first win. The fact that I won by such a small margin is the proof that this martingale strategy is very dangerous. If I lost that one I would have been down like 4 trades. So hopefully I learned the lesson and I won’t do it again. But I cannot promise 🙂 I hope you will be wiser and smarter than me.
It’s as of now that things started to go really well. Like a boy would get a reward for bad behavior.
Fourth trade: luck is in the air
So I won my first trade with a lot of luck. But I was right : the trend was clearly going south. So I decided to put another… put on the EURUSD pair (15 min expiry). A nice downtrend followed, I won, but this time convicily.
Of course I really love binary options all of sudden. It seems this extremely simple MACD strategy works, so why not ?
Fifth trade : same same but different
Such downtrend can be seen on the AUDCHF graph, so let’s go with another put there. 15 min works well ? Let’s go with this expiry. Easy win, I’m ITM almost instantly and during the whole trade.
3 wins in a row. The mood is completely different now. Even if I trade peanuts, I feel the emotions already. What would it be with 100 dollars at stake ? I refuse to find out before/if I have proven track record !
You never change a winning team. Or do you ? I connected to my binary options account to make my « homework ». But since I failed when forcing to trade certain strategies that do not fit in the market mood, or I did not see the right things, I’m not eager to continue right now. And since what I’ve been doing is working, I want to continue. Let’s see this AUDCHF chart. Another comfortable win.
Sixth trade: gimme moar
I keep browsing the charts to find some upward or downward momentum to play them short term. The fifth trade is on the USDJPY pair, 15 min expiry. I’m not even sure why I made this call (I looked at 5, 15 and 30 min charts too). Maybe because of this red candle making a decent point of entry? Even if the timing does not look fantastic (in hindsight I should have aimed to place my trade on the moving average line) the upward trend is sufficiently strong to give you a win, which I got :
I think at that moment I already started to get overconfident.
7th trade: GBPJPY on 5 min expiry
On GBPJPY the trend was south during the morning, then around 8.30 am GMT time things started to revert. I was not sure if it will continue or not (like I know something… but remember, I won 4 in a row so I feel very smart and knowledgable all of a sudden), but short term it seems a safe bet. I make a call, 5 minutes expiry. Another easy win. I could have chosen 10, 15 min, 30 min, the outcome would have been the same. Then Spectre spoiled the party 🙂
While I’m already wondering on which chart I’m going to chase momentum, the system abruptly puts an end to my streak by locking my account for three hours. Well, it’s not really the system that did it. It just did what I asked him to do. In this case it is planned that in case of five wins in a row, the platform gives me a timeout of three hours. Even if I know it’s the right thing to do, I would probably have traded again if I was not forced to step back. That’s why this risk management feature is very nice to protect you against yourself.
Risk management : important when you trade binary options
After a couple of hours trading money like it was substantial amounts, I can already feel the emotions and the pressure of trading. People who know me rather think I’m a cold-blooded person. They just ignore how much is boiling inside. So maybe I’m more prone than you of making mistakes because of psychological reasons. However, I don’t think anybody can be totally immune. That’s why having rules set in stone in your binary trading account is quite important. Yes, you will probably be pissed once the block is triggered. But it’s better like this. Whether you lose too much, you “win too much”, etc.
As I’m almost done with this first article sharing my experience as a binary option dummy, I still have more than an hour to wait before I can trade again. I can already feel that I am in a calmer mood. Definitely in better shape to take decisions compared to two hours ago. I’m not even sure I’m going to trade once the timeout is lifted. I will probably wait for tonight to get those « calm markets » strategy trades that I have to show to my tutor.
I end up the day, or this session, with an amazing win rate of 71%, or a ROI of 6%. Will it continue? See you next time for the next episode of my learning journey in digital options trading.