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(REQ) 20Up Up or down system

dpat30
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litxus82 Newbie

litxus82

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This looks like the the system on ebay http://cgi.ebay.ph/ws/eBayISAPI.dll?ViewItem&item=200455896323#ht_1017wt_1133 , which I considered at one point but never got it due to its high price. From what I recall it is something to do with spread betting, and ironically or by coincidence same broker is recommended for both 20UP and ebay systems. The only good thing I see is that 20UP is through clickbank so refund should be a no issue.
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joeytrader Newbie

joeytrader

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thanks for share, litxus82.

 

I have never used spread-betting or binary betting before, so this is a new concept I am still struggling a bit to understand. Can this strategy be translated to normal fx spot market? So I do not need to change broker?

 

Has anyone w/ a better understanding of this looked at this? or backtested this yet? Is the system really going to double one's account within weeks? I would hate to open up a new a/c with IG Market, and then only find this to be another disappointment. But if it does double one's a/c every couple of weeks, then it is worth doing?

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litxus82 Newbie

litxus82

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Hi Joeytrader,

 

As I understand it works like options of fx, and can be traded only with brokers which have fx options. It seems the value of this particular option is between 0 to 100 theoretically but usually it falls between those lines. Strategy says once it is at 20 level sell, and at 80 level buy as most of the time it mentions goes either to 0 or 100 once past those levels. One thing is that you can't put stops or take profit levels on these instruments, but only open and close (buy or sell), so you have to watch it constantly. It also mentions that if the price is very close to 100 or 0 close the position and if you do not, all your positions will be liquidated at 20gmt. Stop loss have to be executed manually if price goes from 80 to 40 or from 20 to 60. I've never tried this as it seems, pretty much betting for long past 80 and short past 20 levels and risk looks like 2 times the profit. Anyone who have better explanations please pitch in as I'm new to this too.

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joeytrader Newbie

joeytrader

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Thanks litxus82, for the explanation. I think it makes a bit more sense to me now. What I still don't understand is, how does IG Index or IG Market determine what are the 100 and 0 levels for that particular day for a particular currency, in relation to actual currency price.

 

Thanks also for businessman9821, will look forward to your testing.

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joeytrader Newbie

joeytrader

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Megaupload link don't work(Not Found). Please re-upload file. Thanks.

 

I just tried the link, it works, and I downloaded a 2nd time. You need to change "@" to "a".

 

Anyhow, just in case it is your country or some other reasons you cannot access MegaUpload, here it is again, re-uploaded to 4shared:

 

http://www.4shared.com/document/kd7lj53n/Down_or_up.html

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soundfx Newbie

soundfx

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joeytrader,

 

The pricing of binaries is pretty complex mathematical stuff using calculations from the options pricing model (Black Scholes). I don't understand this, though if you're really interested, I found this explanation:

 

"Where S = spot, X = strike, b = carry, sigma = implied vol, T = time to exp as proportion of year, r = risk free rate, CND is the cumulative normal distribution and W = win amount if the binary pays out.

 

 

Binary call price = W * Exp(-r * T) * CND(d)

so it follows that a binary put must be: W * Exp(-r * T) * CND(-d)

 

Where, as in Black Scholes:

 

d = (Log(S / X) + (b - sigma^ 2 / 2) * T) / (sigma * Sqr(T))

 

Simply stated, it is the present value of the payout if the bet is won multiplied by the probability of winning."

 

I'm wondering if it's possible to use a similar system in normal trading too. At the start of the day the probability of price closing up on the day is 50%.

 

If we take something like the 20 day ATR then that should give us an idea of how many pips the pair is likely to move in a given day. Let's say that the USD/JPY ATR is 120 pips.

 

So, if we take the open as a central point and measure current price in pips from there we should be able to calculate the current probability of price closing up on the day from the direction from the open, the number of pips from the open and taking that as a % of the ATR.

 

If price zooms up 120 pips and then ranges, the probabilty of it closing higher than the open will be around 100%.

 

In normal trading we can only trade spot price, so we have to miss out on some scenarios which will affect binary prices.

 

The only way I can think that we can at least simulate this system is to treat ATR as 100% and if price gets to 80% of ATR in one direction we place a trade in the same direction. In fact rather than using ATR which is based on H-L, maybe we should be creating averages of O-L and H-O and using those instead.

 

For example, if price is currently going up and is at 80% of the H-O (High-Open) 20 day average, then we assume it's going to reach 100% and trade Long.

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slipknot Newbie

slipknot

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This looks like the the system on ebay http://cgi.ebay.ph/ws/eBayISAPI.dll?ViewItem&item=200455896323#ht_1017wt_1133 , which I considered at one point but never got it due to its high price. From what I recall it is something to do with spread betting, and ironically or by coincidence same broker is recommended for both 20UP and ebay systems. The only good thing I see is that 20UP is through clickbank so refund should be a no issue.

 

I have this eBay system if you want me to share it. Don't know if it is already in here somewhere. But binary betting isn't hard to understand. At the start of the day, both up and down bets will have a 50/50 chance of happening, but there is the spread of 4 points.

 

Market to end higher: If you think the market will end higher than the opening, you are buying at 52 points. If you think it will end lower, you are selling at 48 points. At the end of the trading hours the market will settle at either 0 points (if the market ended lower) or 100 points (if the market ended higher).

 

Market to end lower: If you think the market will end lower than the opening, you are buying at 52 points. If you think it will end higher you are selling at 48 points. At the end of the trading hours the market will settle at 0 points (if the market ended higher) or 100 points (if the market ended lower).

 

That's basically it. Ofcourse, the 48 and 52 points are only available at the opening of the market. If for example you step in when the market is already 2 hours far, depending on the up or down bet, and depending on how far or close to the actual result the market is at this stage, you will get smaller or larger buy and sell prices, but always between 0 and 100 points.

 

So for this 20 up or down stuff... you will sell at 20 points once the binary market reaches this level and let it close at 0 points for a 20 points profit OR you will buy at 80 points once the binary market reaches this level and let it close at 100 points for a 20 points profit.

 

The only thing is that you are trying to get 20 points profit, but your stop loss will always be 40 points. So risk/reward is 2/1, or in other words, you need 2 consecutive winners for every loser just to break even and 3 consecutive winners for every loser to make 20 points profit.

 

I'll see if I can locate the eBay system on my CD's and share it later.

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Diesel 10 Newbie

Diesel 10

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The main problem I had with this system is you couldn't place stops or alerts so you had to watch the position constantly. Therefore I haven't traded it and money has just sat at IG Markets. HOWEVER, I checked with IG Markets 2 days ago and alerts are now available with Binarys! Even better, you can place a "working order" which according to the rep I spoke with is the equivalent of a stop!!! So I may indeed revisit this system.

 

***Here is something even better that I have never shared before. When you have a huge announcement coming up shortly and the binary is trading at say 20, you can buy it and if the announcement is favorable, the thing has a good chance of finishing at 100! If not, you may even be able to recoup some or all of the 20. In other words, it is a small risk and a huge potential reward. Of course you only do this when there is extremely hot news imminent because these options are settled each day (if I remember correctly 3pm est). If the binary was trading at 75, you might want to short it, hoping for bad news and it to go to zero. These binaries move quite fast, especially on big news... Hope you appreciate this insight into a powerful new way to use binarys!

Edited by Diesel 10
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joeytrader Newbie

joeytrader

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Thanks to soundfx for your explanations. I have actually leaned about "Black Scholes formula" almost two decades ago in some MBA financial investment classes. But it was just too esoteric for me even back then. Perhaps I will just stick with the practical side of how to use it, as opposed to trying to understand the formulas. Also, I think there is merits in looking at the ATR to predict the possible price movements during the current day. However, rather than using it trade from 80% to 100%, I may be more tempted to use ATR to trade reversal: ie. when price reaches 100% then expects to trade its reversal. (Something like the Good Vibr@tion trading system, except that was based on hour-by-hour range, and here we are talking about daily range). And I also never thought of idea of using average of H-O and O-L before. That is an interesting angle which makes a lot of logical sense too. I want to think more about this in my spare time, to see if I can apply this in regular forex market, without using binary betting.

 

And thanks slipknot for your explanation too. Yeah, I also notice the 2/1 risk/reward. Combining this with the fact that, at the moment, I am not ready to either move my account to, or open a new one with, IG Market. So most likely I will move this system to the bottom of my list of systems to try out immediately. But I will look forward to seeing the ebay system you mentioned and see how does that one compare with this one.

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litxus82 Newbie

litxus82

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Slipknot,

 

If you could share the system from eBay it would be great, as I have seen plenty on times, but never pulled the trigger.

 

 

Has anyone tried to backtest this system if there is a way to do it? Although I still wonder what is the advantage of using binaries compared to spot forex?

 

 

Diesel10,

 

Can you share more info on "working orders" as if that is the case it will be same thing as stop and you can set your orders and leave it?

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Diesel 10 Newbie

Diesel 10

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Litxus82:

 

 

This system is the same as one sold on ebay. (I bought the ebay one for $$$ and it is same PDF).

 

Regarding working orders, it is my understanding that it would be equivalent to a stop order, but would not affect or place other orders so if you placed a stop order to enter and it hit, you wouldn't have an exit stop until you placed it... best you call IG Markets and get further clarification.

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slipknot Newbie

slipknot

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Slipknot,

 

If you could share the system from eBay it would be great, as I have seen plenty on times, but never pulled the trigger.

Okay dear friends,

 

Finally found it hidden somewhere in my huge system collection. I bought it in the middle of February 2009 and have seen it being sold ever since under different names and by different eBay sellers. Anyway, feel free to grab your copy from here:

 

hxxp://xxx.mirrorcreator.com/files/CCYQTSKA/80up_30down.pdf_links

Enjoy,

Cheers...

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