Binary options trading system called Neighbor

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Binary options trading system called Neighbor

Binary options tactics called Neighbor

Binary options are able to bring considerable profit to anyone who finds the right approach to them, that is, find an effective trading strategy. Today we would like to offer you one such trading tactics — the “Neighbor”, which will allow even a beginner to make 85% of profitable deals.

The principles of the Neighbor trading pattern

The technical foundation of this system consists of lucrative binary options indicators: the Moving Average, Bollinger Bands and RSI. When combined, their signals show market turns and favorable price levels to open deal. The Moving Average indicator identifies the long-term market behavior and is applied with a very long period of moving. Bollinger Bands builds a price channel, which shows the trend and volatility, and the RSI indicator confirms a new trend emerging in the market. This will last long enough for you to open a deal and close it with a profit. Thus, you get a trading system, which will bring you a stable capital growth through a very simple form of determining trading signals of effective indicators.

Creating the trading scheme template

Like all indicator-based trading systems, Neighbor is applied using an indicator template, which you will need to build with the specific technical analysis tools on a quotation chart. This means you need a platform with built-in set of indicators with certain settings that can be set on the chart. When preparing this article, we chose the platform of the Binomo broker as an example. This terminal features all the necessary options for proper and profitable application of the strategy.

To build the template, choose the following tools with specific settings for the chart:

– The MA, period 100;

– RSI, period 75, trend levels markers 50/50.

It is best to apply 1-minute interval to properly analyse the market. Also, choose a high-volatility trading instrument as the base asset. The properly set chart should have the following layout:

A working strategy of binary options Neighbor: trading signals

Your main goal in trading with this trading system is to wait for the following signal: the Bollinger Bands channel crossed by the moving average and the RSI line moving relative to the trend level. Such a signal will mean that the market has reversed and you need to conclude a deal immediately.

A deal implying a decline of the asset’s price is opened when:

– The BB channel and the price of the asset cross the red moving average in a downward direction;

– RSI moving will start to form below the trend level.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
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  • Binomo
    Binomo

    2nd in our ranking!

A deal implying a rise of the asset’s price is opened when:

– The BB channel and the price of the asset cross the red moving average in an upward direction;

– RSI moving will start to form above the trend level.

Expiration

This strategy works on a 1-minute timeframe with indicators determining a long-term development of the trend in the asset market. Taking into account the duration of the trading signal, the expiration can be set for 15-20 minutes. We do not recommend applying this strategy to quotation charts with second timeframes, on which this strategy fails.

Money Management

For proper risk management, it is best to limit the cost of each option to 5% of one’s trading capital in order to avoid serious drawdowns after making several unprofitable trades in a row. The option size should be reduced to the minimum if the amount of funds on the trading account is modest. Binomo’s trading conditions are optimal in this case: the option price starts from $1.

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Trading system of binary options “Profitable channel”

Quite often, traders of the stock exchange of binary options, and especially the beginning specialists of this segment of the financial market – believe that the need to have a sufficiently large start-up capital is an indispensable condition for profitable trading and further achievement of financial independence. For this reason, beginners often postpone for an indefinite period the beginning of work in the options market, and often even gradually “cool down” to this idea, and not starting to trade and earn. All this is the result of misinformation and information myths, many of which are an annoying legacy of the Forex exchange, on which it is really necessary to invest large sums in order to have at least some income.

Nevertheless, myth is a myth, and it has nothing to do with the real situation on the binary-option market. For example, if you have only 10 USD – you can already enter the auctions on the platforms of option brokers from our TOP. That is, to start earning really impressive amounts, applying in practice any trading system that has high profitability indicators. The trading system, which we are considering today in detail, is called the “Profitable channel” and is the optimal way of trading for starting investment options, which by means of trading on the system almost immediately move to a different level. That is, the buildup of capital is so rapid that the trader literally does not have time to “blink an eye”.

But for work on the strategy “Profitable channel” it will be necessary to observe a number of indispensable conditions.

The most basic requirement is the possibility of applying transactions with their minimum size – and this, as we have already explained, can be carried out on trading terminals from companies from our top, since the starting volume of the deal on this resource is 1 US dollar. It is worth mentioning that when trading at a minimum deposit for the system will be characterized by a large value of financial risk, namely – about 10% of the volume of financial depot. However, despite this high level, when working on a strategy with increased recoverability, the deposit will still grow rapidly enough. But the market risk, accordingly, will decrease down to the lowest possible (2% of the size of the financial depot), increasing the additional growth rate of the private investor’s financial capital. Since the trading system “Profitable channel” refers to a variant of indicator type strategies, then again – we come to the fact that for work within this methodology we will be approached by a terminal from brokers from the rating, which is presented on our website.

This fact is undeniable for the reason that this platform provides an integrated set of autoindicators, in which there are available those technical means that are required for us in this case. Among other things, the terminal is characterized by a record speed of execution of trade orders and has a lot of other advantages that will work in your favor when you engage in the bidding of almost any of the currently existing methods of keeping track of binary contracts.
But back to our trading system. On the chart of quotations of the underlying asset (let’s take the asset of the EUR-USD currency pair) we will need to establish:

• With the initial settings – we set the Bollinger wave indicator on the quoted schedule of the asset being traded;
• With the initial settings, we also set the asset quotation chart and the MACD auto indicator;
• And for the RSI autoindicator, we will keep the original setting parameters for building its moving, but we will change the values ​​of its critical levels by 30 and 70 (oversold and overbought zones).

When the indicator template is set on the quotation schedule of the asset, a similar kind of working field should appear in front of you on the monitor:

In the system of binary-option trading “Profitable Channel” traders use the standard classical approaches to channel trading with the use of the Bollinger Wave tool, working, however, in combination with two confirmatory signaling tools. The main indicator signal to enter the market is, of course, the indicators of the actual Bollinger Indicator, but in themselves they may be false – therefore, as a filter signal, indicators of two more automotive tools playing the role of filters – MACD and RSI are included. This method achieves a significant reduction in the number of knowingly unprofitable contracts, which means that the overall performance of the private investor of the options market also increases.
Signals of the indicator complex of the “Profitable Channel” system look quite simple on the chart, yet possess high reliability.
For the Danish trade contract, the following set of indicators should be visually fixed:

• The upper yellow color of the wall of the Bollinger channel was affected by quotations due to their fluctuations;
• The red-colored line was crossed downwards by black with the MACD indicator, and under the center line of the histogram appeared a column of red;
• The downward trend direction is indicated by the removal of the RSI auto tool, which left the overbought zone on the chart.

For the trade contract UP the following complex of indicator indicators is visually fixed:

• The lower green wall of the Bollinger channel was affected by quotations due to their fluctuations;
• The red-colored line was crossed upward by a black MACD indicator, and a green bar appears above the centerline of the histogram;
• The upward trend direction is indicated by the removal of the RSI auto tool, which left the oversold zone on the chart.

As a result of the application of signal complexes in practical private binary-option trading, we receive a dynamic growth of the deposit account and approximately 87% of the successfully completed trade contracts. The recovery of the system, as mentioned above, occurs quite quickly, therefore, in just one working day at the stock exchange of binary options, if trading on a profitable asset, you can increase the initial capital by at least two times.

With regard to setting the time for expiration and following the rules of money management for private option investment within the specified trading system, it is recommended to follow very simple principles. To operate on the stock exchange firstly follows only the minimum amount of transactions, and when a high financial result and the growth of trading capital to a significant amount – you can reduce market risks up to the bar in 2% of the value of the deposit. This is a classic rule of capital management, operating in the option market for years.

As for the expiration of trade contracts, in this case it should be limited to a time range of 180 seconds.

Finally, we note that the size of the starting financial depot for trading on the ultramodern platform as part of a highly profitable multi-component trading strategy is not a primary factor affecting the further achievement of financial success by the private investor. Even with a minimum deposit capital, you can quickly become the owner of a large trading account. Your effectiveness as a binary-optional trader will depend solely on your general care, discipline, and on the effectiveness of the approaches you take to obtain a reliable forecast for the opening of exchange contracts. By the way, when trading with a demo account without financial investments, Binomo allows you to earn real capital to start trading on the stock exchange as a financial investor. The company holds tournaments, the winners of which get the opportunity to enter the market without their own financial investments.

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Forex Algorithmic Trading: A Practical Tale for Engineers

As you may know, the Foreign Exchange (Forex, or FX) market is used for trading between currency pairs. But you might not be aware that it’s the most liquid market in the world.

A few years ago, driven by my curiosity, I took my first steps into the world of Forex algorithmic trading by creating a demo account and playing out simulations (with fake money) on the Meta Trader 4 trading platform.

After a week of ‘trading’, I’d almost doubled my money. Spurred on by my own successful algorithmic trading, I dug deeper and eventually signed up for a number of FX forums. Soon, I was spending hours reading about algorithmic trading systems (rule sets that determine whether you should buy or sell), custom indicators, market moods, and more.

My First Client

Around this time, coincidentally, I heard that someone was trying to find a software developer to automate a simple trading system. This was back in my college days when I was learning about concurrent programming in Java (threads, semaphores, and all that junk). I thought that this automated system this couldn’t be much more complicated than my advanced data science course work, so I inquired about the job and came on-board.

The client wanted algorithmic trading software built with MQL4, a functional programming language used by the Meta Trader 4 platform for performing stock-related actions.

The role of the trading platform (Meta Trader 4, in this case) is to provide a connection to a Forex broker. The broker then provides a platform with real-time information about the market and executes your buy/sell orders. For readers unfamiliar with Forex trading, here’s the information that is provided by the data feed:

Through Meta Trader 4, you can access all this data with internal functions, accessible in various timeframes: every minute (M1), every five minutes (M5), M15, M30, every hour (H1), H4, D1, W1, MN.

The movement of the Current Price is called a tick. In other words, a tick is a change in the Bid or Ask price for a currency pair. During active markets, there may be numerous ticks per second. During slow markets, there can be minutes without a tick. The tick is the heartbeat of a currency market robot.

When you place an order through such a platform, you buy or sell a certain volume of a certain currency. You also set stop-loss and take-profit limits. The stop-loss limit is the maximum amount of pips (price variations) that you can afford to lose before giving up on a trade. The take-profit limit is the amount of pips that you’ll accumulate in your favor before cashing out.

The client’s algorithmic trading specifications were simple: they wanted a Forex robot based on two indicators. For background, indicators are very helpful when trying to define a market state and make trading decisions, as they’re based on past data (e.g., highest price value in the last n days). Many come built-in to Meta Trader 4. However, the indicators that my client was interested in came from a custom trading system.

They wanted to trade every time two of these custom indicators intersected, and only at a certain angle.

Hands On

As I got my hands dirty, I learned that MQL4 programs have the following structure:

  • [Preprocessor Directives]
  • [External Parameters]
  • [Global Variables]
  • [Init Function]
  • [Deinit Function]
  • [Start Function]
  • [Custom Functions]

The start function is the heart of every MQL4 program since it is executed every time the market moves (ergo, this function will execute once per tick). This is the case regardless of the timeframe you’re using. For example, you could be operating on the H1 (one hour) timeframe, yet the start function would execute many thousands of times per timeframe.

To work around this, I forced the function to execute once per period unit:

Getting the values of the indicators:

The decision logic, including intersection of the indicators and their angles:

Sending the orders:

If you’re interested, you can find the complete, runnable code on GitHub.

Backtesting

Once I built my algorithmic trading system, I wanted to know: 1) if it was behaving appropriately, and 2) if the Forex trading strategy it used was any good.

Backtesting (sometimes written “back-testing”) is the process of testing a particular (automated or not) system under the events of the past. In other words, you test your system using the past as a proxy for the present.

MT4 comes with an acceptable tool for backtesting a Forex trading strategy (nowadays, there are more professional tools that offer greater functionality). To start, you setup your timeframes and run your program under a simulation; the tool will simulate each tick knowing that for each unit it should open at certain price, close at a certain price and, reach specified highs and lows.

After comparing the actions of the program against historic prices, you’ll have a good sense for whether or not it’s executing correctly.

From backtesting, I’d checked out the FX robot’s return ratio for some random time intervals; needless to say, I knew that my client wasn’t going to get rich with it—the indicators that he’d chosen, along with the decision logic, were not profitable. As a sample, here are the results of running the program over the M15 window for 164 operations:

Note that our balance (the blue line) finishes below its starting point.

Parameter Optimization, and its Lies

Although backtesting had made me wary of this FX robot’s usefulness, I was intrigued when I started playing around with its external parameters and noticed big differences in the overall Return Ratio. This particular science is known as Parameter Optimization.

I did some rough testing to try and infer the significance of the external parameters on the Return Ratio and came up with something like this:

You may think (as I did) that you should use the Parameter A. But the decision isn’t as straightforward as it may appear. Specifically, note the unpredictability of Parameter A: for small error values, its return changes dramatically. In other words, Parameter A is very likely to over-predict future results since any uncertainty, any shift at all will result in worse performance.

But indeed, the future is uncertain! And so the return of Parameter A is also uncertain. The best choice, in fact, is to rely on unpredictability. Often, a parameter with a lower maximum return but superior predictability (less fluctuation) will be preferable to a parameter with high return but poor predictability.

The only thing you can be sure is that you don’t know the future of the market, and thinking you know how the market is going to perform based on past data is a mistake. In turn, you must acknowledge this unpredictability in your Forex predictions.

This does not necessarily mean we should use Parameter B, because even the lower returns of Parameter A performs better than Parameter B; this is just to show you that Optimizing Parameters can result in tests that overstate likely future results, and such thinking is not obvious.

Overall Forex Algorithmic Trading Considerations

Since that first algorithmic Forex trading experience, I’ve built several automated trading systems for clients, and I can tell you that there’s always room to explore and further Forex analysis to be done. For example, I recently built a system based on finding so-called “Big Fish” movements; that is, huge pips variations in tiny, tiny units of time. This is a subject that fascinates me.

Building your own FX simulation system is an excellent option to learn more about Forex market trading, and the possibilities are endless. For example, you could try to decipher the probability distribution of the price variations as a function of volatility in one market (EUR/USD for example), and maybe make a Monte Carlo simulation model using the distribution per volatility state, using whatever degree of accuracy you want. I’ll leave this as an exercise for the eager reader.

The Forex world can be overwhelming at times, but I hope that this write-up has given you some points on how to start on your own Forex trading strategy.

Further Reading

Nowadays, there is a vast pool of tools to build, test, and improve Trading System Automations: Trading Blox for testing, NinjaTrader for trading, OCaml for programming, to name a few.

I’ve read extensively about the mysterious world that is the currency market. Here are a few write-ups that I recommend for programmers and enthusiastic readers:

  • BabyPips: This is the starting point if you don’t know squat about Forex trading.
  • The Way of the Turtle, by Curtis Faith: This one, in my opinion, is the Forex Bible. Read it once you have some experience trading and know some Forex strategies.
  • Technical Analysis for the Trading Professional — Strategies and Techniques for Today’s Turbulent Global Financial Markets, by Constance M. Brown
  • Expert Advisor Programming – Creating Automated Trading Systems in MQL for Meta Trader 4, by Andrew R. Young
  • Trading Systems – A New Approach to System Development and Portfolio Optimisation, by Urban Jeckle and Emilio Tomasini: Very technical, very focused on FX testing.
  • A Step-By-Step Implementation of a Multi-Agent Currency Trading System, by Rui Pedro Barbosa and Orlando Belo: This one is very professional, describing how you might create a trading system and testing platform.

Understanding the basics

What is Forex trading all about?

Forex (or FX) trading is buying and selling via currency pairs (e.g. USD vs EUR) on the foreign exchange market.

How does Forex make money?

Forex brokers make money through commissions and fees. Forex traders make (or lose) money based on their timing: If they’re able to sell high enough compared to when they bought, they can turn a profit.

What is backtesting a trading strategy?

Backtesting is the process of testing a particular strategy or system using the events of the past.

What is algorithmic trading?

Algorithmic trading is when a robot/program uses a set of rules that tell it when to buy or sell.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo
    Binomo

    2nd in our ranking!

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