Binary Options Factual Guru Strategy

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The Fractal Guru Strategy – Too Confusing for Newbies?

To be honest I don’t really know what’s up with the name of the strategy and I usually walk away when I hear stuff like “Guru”, “Expert” or anything along those lines. Well, I decided to give the strategy a go and try it out on my Meta Trader 4 charts. The main reasons why I didn’t dismiss it from the start was because it uses ADX (I am sure you remember the article where ADX is thoroughly explained), Fractals (don’t worry, I will explain them here) and Japanese candlesticks. The strategy is created by a guy named Navin Prithyani and can be found here http://forex-strategies-revealed.com/basic/fractal-guru-strategy, but I will try to explain it in more detail. First, a few words about Fractals:

What are Fractals?

The Fractals used in trading are part of a strategy created by Bill Williams and are different from the Fractals used in mathematics. I am not going to explain them in full detail, because that is not necessary for this strategy, but what you need to know is that a bearish Fractal is actually a 5 candle formation and it is formed when the high of the middle candle is higher than the highs of the two candles to the left and the two on the right. A bullish Fractal is a five candle formation with the low of the middle candle being lower than the lows of the other four candles. Complicated? Here’s the picture:

Above we have a bullish Fractal formation (a bearish one is an exact opposite) and although they might seem difficult to identify at first, let me assure you that it’s actually very simple. See that gray arrow below the middle candle? It will appear automatically whenever a Fractal is identified by the Fractal indicator…yes, there is an indicator that helps us. After all, it’s the third millennium so an indicator for Fractals is not such a complicated task.

The Meta Trader 4 platform has both Fractals and ADX indicators built-in, so you will easily find them by clicking on Insert – Indicators – Trend – Average Directional Movement Index (for the ADX) and Insert – Indicators – Bill Williams – Fractals to display Fractals on your charts. One thing you have to remember: the Fractal is a 5 candle formation so until the fifth candle is not closed, the arrow can disappear. Any trade will be entered on the opening of the third candle after the one where the Fractal appeared. Ok, enough about this, I don’t want to bore you so let’s get to the good part:

How To Use The “Fractal Guru Strategy” For FX, CFD, Crypto and BO Trading

The strategy relies heavily on the ADX and we only take bullish trades (Buy/Call) when the ADX is rising, the Green dotted line is above the Red dotted line and a complete Fractal appears (all 5 candles are closed). As an extra precaution, we only trade if the candle corresponding to the Fractal arrow has a long wick pointing towards the Fractal and a short wick on the other side. A picture will make things clearer:

The picture above explains a valid bullish trade entry according to the strategy and for a bearish trade, the opposite applies, except the ADX blue line: that must be rising, just like in the case of a bullish trade because it (the Blue line) shows the strength of a move, not its direction. Here’s a brief summary of both types of entries:

Bullish Trade Entry:

  1. ADX Blue line is steadily RISING
  2. The Green dotted line is ABOVE the Red dotted line
  3. A bullish Fractal must be locked in/fixed/fully established (all 5 candles must be closed)
  4. The candle corresponding to the Fractal arrow must have a long wick pointing towards the Fractal arrow and a short wick on the other side.
  5. If you are trading Forex, CFD or Crypto, open a Buy trade
  6. If you are trading BO, open a Call

Bearish Trade Entry:

  1. ADX Blue line is steadily RISING
  2. The Green dotted line is BELOW the Red dotted line
  3. A bearish Fractal must be locked in/fixed/fully established (all 5 candles must be closed)
  4. The candle corresponding to the Fractal arrow must have a long wick pointing towards the Fractal arrow and a short wick on the other side.
  5. If you are trading Forex, CFD or Crypto, open a Sell trade
  6. If you are trading BO, open a Put

Trade Management

For FX/CFD/Crypto trades you will have to choose a good placement for your Stop Loss and Take Profit orders but the good news is that it’s not such a difficult task. And because it’s a trend following strategy, you can use a tight Stop Loss, a few pips behind the Fractal, just make sure the trade has enough room to breathe. For Take Profit, use at least 1:2 Risk to Reward (RR) but you can go even higher in some cases. Keep in mind that cryptocurrencies are more volatile so you will have to use a wider Stop Loss but you can also get away with a bigger Take Profit.

For BO trades things are a bit more difficult because you will have to adjust your expiry according to the conditions of the market you are trading. If the trend is strong, use a short expiry of about 2 candles (that would be 10 minutes if you are trading a 5-minute chart). If the market is slow, use a longer expiry to allow the trade to develop. And always keep in mind this is just an opinion and you shouldn’t take it literally; always do your research and decide on your own.

Why Does The “Fractal Guru” Strategy Suck?

First of all, I think it is much too complicated for a newbie and he/she could easily get confused by all the ADX lines, the five candles of a Fractal or even the entry point that is the opening of the third candle after the Fractal arrow appears. Furthermore, I think that the ADX rule is too subjective and leaves a lot of room for interpretation. The exact words of the creator of the strategy are: “when the ADX is trending by seeing the blue line rising steadily…” I am not saying it is wrong, but what exactly does it mean? For how long should the ADX rise steadily and what values are considered safe in terms of this strategy? We don’t have a clear answer to that and all we could do is to speculate about it. Maybe a seasoned trader can easily identify a steadily rising ADX but a novice will be in trouble.

Why The “Fractal Guru” Strategy Doesn’t Suck?

Although it is a pretty complicated strategy, it is based on sound principles that can generate a high probability trade: we are trading with the trend as long as the ADX is rising and the Fractal formation is actually the retracement. This is the best place to join a trend: after the retracement. Then there’s the long wick rule: the candle with a long wick that the strategy talks about is something similar to a Pin bar (Pinocchio bar) which is a reversal candle. I will always like Pin bars because I’ve seen their power in action and the extra confirmation provided by them is beneficial for the strategy.

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Wrapping it up

I like trend following strategies because they provide good and pretty safe entry points, but I don’t feel that the ADX is the best trend indicator. At least, not used as the main indicator in a strategy. Fractals are …too complicated for what they actually do and can be easily re-painted (re-painting occurs when an arrow appears and then disappears when the next candle is printed). Overall, the principle behind it is good, but the tools it uses are just too subjective and can confuse traders. My conclusion is that the individual trader who uses this strategy makes all the difference and it can be profitable for some traders while others will just thrash it and move on.

What a Sunny Day for a Good Binary Options Guru Education

According to the Merriam – Webster Dictionary, a “Guru” is:

– A religious teacher and spiritual guide in Hinduism

– A teacher or guide that you trust

– A person who has a lot of experience in or knowledge about a particular subject

According to the Internet, the word “Guru” has a slightly different meaning: a dude who found the ultimate and absolute truth and is willing to share it with you. These guys know how to make money out of thin air, they can show you how to lose weight, how to pick up girls and probably they could teach you how to be elected President of your own country.

The Guru’s of Binary Options

Among all these Jedi Knights of the Internet, the Binary Options Gurus are a special breed: they are all filthy rich, smart, polite and of course, they all found the secret to trading and making a truckload of money out of it. Oh, and did I mention they are so caring that they all want to share with us this awesome secret? Yes, they all feel an inner urge to make us, mere mortals, rich… if we pay them. Wait, something doesn’t add up: it they are so loaded, why do they need our money? After all, they didn’t become rich because they won the Lottery, but because they are such amazing traders… well, the market is still here so if they need more money, they could just trade, like the market wizards they are. But nooo, they go through the trouble of launching a website, promoting it and writing one-mile long sales letters to convince us their intentions are really the best.

If I would find a strategy as good as they claim to have, I would trade it day in and day out until I can buy a house in Bora Bora… with internet access so I can trade some more. If for some reason I would decide to share this gem of a strategy, I would do it for free. Because I’m filthy rich and I don’t need your money, right? However, all the Keith Jones’ of the internet don’t share my point of view and they want your 99, 47 or even 17 bucks. It’s laughable to see how naïve they consider us but even funnier is how they only have a limited number of copies of the strategy or software: usually their sales pitch is accompanied by a warning like “Act now! There are only 10 copies left”.

I’m revisiting this article more than 2 years after I’ve initially wrote it… and Oh Boy, how things have changed. We have even more Gurus, even more ways to become rich overnight, but now they don’t teach you to trade, they don’t give you a strategy! Instead, they give you a robot, a software that does all the work for you. Basically, you push the “ON” button and the software trades automatically for you, makes money and all you have to do is withdraw it. And it gets better: most of these autopilots/robots are Free! Yup, now they don’t ask you for money anymore; all you have to do is deposit with the broker they direct you to. Easy! But let me spoil it for you: none of these magic tricks work. They all tell you how they’ve developed the software after years of hard work, have invested tons of money and now they are ready to share it with you for free. Why for free? I don’t know *hint: because they want you to deposit with their recommended broker and because they get paid for that*. Anyway, they are all the same…actually there are so many similarities between all the Binary Options Gurus that I almost believe they bought an Instant Guru Kit. I wonder where I can buy one… and what’s inside.

The “Instant Guru Kit” Contents

Item number 1: Cool sounding Guru name. Of course they need such a name; after all, you wouldn’t want to give your money to a guy whose name doesn’t inspire confidence. So the first item must be a name. You didn’t think that a Keith Jones actually exist did you? Well, maybe there are guys named Keith Jones in this world, but the well-known Binary Options guru who “invented” the “60 Seconds Profit Strategy” strategy is probably not named Keith Jones.

Item number 2: Fictive trading background for the so-called “guru”. Something like: “In my Wall Street trading days I was making 10K every day but the pressure was just too high so I gave it up” or “I used to work for the biggest trading companies in London for 10 years.” … bla, bla, information that cannot be verified but it sounds trustworthy to a naïve ear.

Item Number 3: A strategy + a story. Any strategy will do, even a cross of two Moving Averages, because the actual strategy is not that important. What is important is to have a good story behind it. It must be something intriguing like: “I discovered this by accident while working for the largest bank in the world.” or “It is based on artificial intelligence, neural network and quant algorithms all put together to produce the best signals ever”. Anyway, it was a secret before and now for some reason it isn’t anymore. Lucky us…

Item number 4: Access to solar satellites, as well as a copy of Warren Buffett’s mind. With these you can build your story, achieving amazing results and fooling all the visitors of your website. As a bonus, you get a Fiverr account so you can hire actors to pose as traders with 35 years of experience.

Item number 5: Cool sounding name for the strategy or software they are selling. It must be something along the lines of Binary Turbo, Unlimited-Profit Bot 2.0, Magical Cr4p or Pot-of-Gold-at-the-end-of-the-Rainbow. Here are some funny videos about those “profitable Binary Options gurus and autotraders“.

Item number 6: “Undeniable Proof”. All our beloved gurus claim to have this kind of proof, but all they can show are some badly modified pictures of their bank accounts or some testimonials of “real” people. Yea, of course they are real people… just not real traders.

Deluxe Item *Only available in the Premium Package*: Instruments to trash other gurus, saying how they lie to you and just want your money. Lately this is a widely used tactic in the Guru Wars (they have their own battle for supremacy) because each guru wants your money in his pocket, not in someone else’s.

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Don’t Buy What Fake Gurus Sell You.

Whenever you think about paying a fake Guru for some secret to Binary Options riches, imagine the smirk on his face when he gets your money or makes you deposit with his recommended broker and all you get in return is a POS (Piece of S…) software or strategy. Think about how hard you worked for that money and how easy he got it off of you. Oh, and some more food for thought: a guy selling you a gazillion-dollar-making strategy is similar to Coca-Cola selling you their formula for 99 bucks. Something doesn’t sound quite right, does it?

The Truth About Binary Options: #11 Facts

#1 Avoid Unlicensed Binary Options Brokers

Why are unlicensed binary options brokers dangerous? Although officially outside EU/USA it’s not required for a binary options broker to be licensed, it is very much recommended to trade with a licensed broker. Some traders and many governments doesn’t care if a broker is licensed or not and they treat all them the same way, as if license doesn’t provide any advantage or goodwill. Actually, it does.

There are a few advantages for a trader. First, you have a chance to complain if you face any kind of fraud, like delay of payments, blocked account or manipulation of market data. CySEC has fined many brokers and the fines were not nominal. Second, a licensed broker cares of his reputation, because when a fine happens, this is a huge news in the industry and competitors will be happy to make such case as loud as possible. So in many conflicts you will be able actually to negotiate effectively, just telling the broker, you can go all the way to the regulator.

CySEC, based in Cyprus, is the most widely used regulator and it is also very reachable and active, but there are others, who work with binary options brokers, like UK’s FSA, BaFin from Germany, Spanish CNMV, Indian SEBI, – all good.

Only make sure, that the broker’s license is currently valid, as in some cases brokers were deprived of licenses due to various wrongdoings, or have abandoned regulators voluntarily.

#2 More Than 50% of Traders Lose Their Deposit on the First Day of Trading

How not to lose your deposit on the first day of trading? Unfortunately, it’s a common situation. A person comes to binary options or to forex trading or to any market all and loses all the money he has got to trade during the very first day. So how to avoid this? The strategy is very easy – don’t use the whole of your deposit during the first day.

The first day of trade is your first test. Can you stay cool, can you keep your head cold, can you limit yourself and keep your trading within firm borders of 10 – 20% of the deposit. If you can, you can be a successful trader.

Control your emotions, control your behavior, stick to your strategy,- those are the main qualities of good traders. Knowing how to use the charts and trading tools is secondary.

You will master the market if you can master yourself.

#3 Shady Brokers Will Try To Convince You To Keep The Money (Until You Lose Them)

How to withdraw large earnings from binary options brokers? So, you made it and you have earned thousands, or even tens of thousands dollars on binary options! Congratulations, but it will not be a complete feeling, until you don’t have a significant sum in your pocket. And here are a few moments you should know about withdrawing lots of money form binary options broker.

  • First, a broker will try to convince you to keep the money. Of course, brokers are not really used to deal with winners, only as little as 1-10% of traders win and withdraw significant money. But they have strategies to make the numbers of withdrawals less. They will offer you huge bonuses, a personal manager, risk free trade, secret strategies,- everything to keep you trading, trading big, risking and eventually making a mistake. Don’t succumb. If you have in mind a certain amount of money you want to withdraw, stay cool and stand firm. Get your hard earn profit, celebrate, and then risk with the remaining bank.
  • Second, there are limits. In all the advertising brokers promise 1 hour withdrawal and usually it works with small sums. But deep inside terms and conditions you will find, that a broker actually can be very slow in sending your money, they can start a very slow so-called “confirmation” process, and sometimes it will take months to get your winnings in full, particularly with small brokers.

So trade with a large licensed broker (like IQ Option, Binary.com or Olymp Trade) and have a clear strategy – how much money you are ready to keep and don’t let any “exclusive” offers shake that.

#4 What Are The Three Worst Mistakes Of A Beginning Trader?

First of the worst mistakes is trading on a very short timeframe, when you can’t predict anything and rely on fortuity, not on calculation.

Second, lack of risk management. You must know and control your risks. Don’t do too many deals in a short period, or don’t bet on vey “costly” deals when you use too much of your deposit. Those are the ways to lose everything, in case of mistakes it will be pointless even to analyze them, because you will have no money to strike back and use the experience you always gain from your losses.

Third, choosing the wrong broker. You can be a genius or you can learn to be a very good trader and make lots of profits, but if you choose the wrong broker, you will be cheated and the broker simply will not pay you. So always choose a licensed broker with good reputation.

#5 What Is The Main Quality Of A Successful Trader?

Self-control is the main quality of any successful trader, you will not find a really successful trader who makes rush decisions and keeps braking the borders of his strategy.

You need to set the limits, how much you can afford to lose, how much you are ready to spend on one deal, how much risk you are ready to afford in your strategy,- and stay within those limits.

Before each deal you need a clear idea, why are you doing this and why it will work, if you are mistaken – recognize this, take time to analyze, make new strategy and keep going.

Remember, you need to limit yourself both in situations of losses and high wins, so that you will not lose too much in one case, and leave the game as planned, taking the profits in another case.

#6 How To Double The Amount Of Successful Deals?

The answer is – make less mistakes in your trading. How to do it? Trade on longer timeframes.

Why longer timeframes are better? You will have more time to analyze the situation and make a decision on whether to make a deal or not. The more time you have to decide, the less mistakes you make.

By the way, if you choose not the first class broker, shorter timeframes are even more dangerous, because lots of frauds and cheating on the broker side are carried out with traders, who choose shortest timeframes.

Reduce the amount of your deals, increase the time between your deals – and you will lower your risks and raise your profits.

#7 Why 99% Of Trading Systems Don’t Work?

Lots of brokers offer trading systems to their clients nowadays, as well as other parties on the market, like financial consultants and various market gurus.

There are two reason why most of those systems don’t work.

First, those ideas may have been brilliant at first. But any successful strategy, when it is promoted and offered for copying by many traders, eventually simply stops working.

Second, some strategies are actually designed to work against you, those are the strategies offered by brokers. Yes, you may benefit from them for some time, but in the end the broker wants you to lose and you will lose if keeps working within the inflicted strategy.

The only strategy that works is your own strategy, when you choose the required risk tolerance, trading instruments that you understand, and timeframes that are not too short.

#8 What Are The Three Common Delusions About Binary Options?

  • People see the high profits of binary options trading and lose sight of high risks. Risks and profits are interrelated, if there’s a chance to win a lot, there’s a high chance to lose everything.
  • People want instant success. With binary options you can earn quick money, yes, but this will not last. If you are a beginning trader, who instantly wins, you will probably experience losses very soon. Be ready for a long game and, lots of high and lows and keep control of your emotions in good times and in bad times.
  • Easy money – people think binary options trading is a very easy thing, but it’s not. You will have to learn to be a successful trader, and you will have to pay for that education – with your nerves and with your money.

#9 Is It Possible To Become A Millionaire By Trading Binary Options?

Many people ask the same question: How to make millions by trading binary options? First, there are no credibly cases of millionaire traders, who made fortune on binary options. A more realistic strategy to earn millions, is start with binary options and forex, build small fortune and move on to other markets, where you can earn millions.

There are two things to consider, if you want to make millions with your trading.

First, you can’t just come to the market and become a millionaire immediately, the secret of millionaire traders – they all have vast experience, that helped them to create a unique trading strategy, backed by some brilliant ideas. To have a brilliant idea, that will be a base for a winning strategy, you’ll need to have lot’s of ideas. And that means test lots of ideas and lots of strategy, losing and winning on the way.

So as a beginner you should be ready for a long game.

Second, how much money you make depends on how much you can put in to start with, and to earn millions you’ll have to put in hundreds of thousands. But for hundreds of thousands binary options market is simply not safe enough.

#10 Why You Shouldn’t Trust Your Binary Options Broker?

Whatever your binary options brokers tells in his advertising, he makes profits only when the traders lose, so he is not interested in your success.

Of course, it doesn’t mean that you can only lose. On the one hand, there’s regulation, and good binary options brokers are accountable, on the other hand, there’s competition, and brokers value their reputation and don’t want scandals.

But you should be ready, that even the best brokers will want to cheat you.

First, some brokers offer you managers, that give trading advice, to some extend that advice could be helpful at the beginning, but the broker will not want you to end up with huge winnings, so on later stages advice will be misleading.

Second, the brokers will try to convince you to trade more and to take more and more risks. They will offer exclusive conditions, only to keep you trading. Don’t listen, have your own limits and take out money when you win.

#11 Do You Read Terms And Conditions?

In any industry terms and conditions will contain surprises, that will go against what you see in advertising or what sales people tell you.

In binary options there are several things to consider, so make sure you read terms and conditions before you choose the right broker.

First, some brokers will charge you with 2-5% of the money you want to withdraw, sometimes there’s even a minimum limit of this charge, 10-30 USD (but no maximum limit), so if you withdraw 50 dollars of winning, your broker will want to keep 30 of them. This is not because a broker wants that 30 dollars badly, this is because a broker wants you to keep going, keep trading. So in such case just understand, that your broker charges this money and withdraw your winnings anyway, if such was your strategy.

Second, your broker may have the right to keep your money if they are not satisfied with your documents, officially it is said to be targeted against money laundering. But in fact it is often used to keep the money of hugely successful traders. Your broker doesn’t reject your withdrawal, it just puts it on hold and keeps asking for more and more documents, that may last forever. So trade with a licensed broker, in this case you will have an option to complain.

Finally, there are commissions, and with commissions you can do nothing. Some brokers charge commission if your trading account was inactive for 60 days, some – charge several dollars every month from every trader, others charge commissions on your winning. For this you just need to be aware of.

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