In this episode of Truth About FX, Walter digs into naked strategies and how they could be used for binary options — or is this even viable? You will find out in this episode why trading binary options is like riding through the wild, wild west… and how it all may seem like a shiny new toy, at first
Download (Duration: 03:50 / 3:49 MB)
In This Episode:
00:34 – solid trades
01:50 – naked point of view
03:05 – ripped off
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. We’ve got a request here. Someone would love for you to do a videos on “Naked Trading Strategies for Binary Options” that would give you a 3 to 5 solid trades a day. I’m sure you’ve got a lot questions like this. What do you say to that?
Walter: That’s funny. First of, as bad as forex broker have in terms of reputation like the Binary Forex Broker, it’s like 10x worst. It’s totally the Wild West. I mean, as bad as the forex brokers have, reputation-wise, they have this reputation in the industry.
All these futures traders laughed at people who trade forex. They think it’s ridiculous. “Why would you ever do that when these brokers are going to completely kill you in terms of trading against you?”, and all that.
Futures traders think forex traders are insane. “They’re idiots. Why would they ever trader forex?” I think that it’s the way that forex brokers were. About 15 years ago in the industry, there was the Wild West.
You never knew if you’re going to build and get your money out. I think a lot of these binary option traders or brokers are the same way. I know that there’s like NADEX — I’ll put a link in the shownotes. There are some reputable ones that you can use but a lot of them are really dodgy.
So, that’s number one. Assume you’ve got the broker down the right way, then that’s fine but the only real strategy that would make sense to me from a Naked point of view which is the way I like to approach it is I would go for some sort of system where you expect the market to approach… Like, it looks like it’s accelerating towards a resistance, a support and resistance level. So, you would do something like that, right?
Or, you see that it’s hit a support and resistance level and you expect it to push off of that. Those are the only, basically your real basic naked support and resistance, where it’s sitting on that level and let’s say the market run up and it’s sitting on a resistance level, just kind of sitting there with a few candles.
You know it’s probably going to break higher and keep going so these are the sort of strategies that would make the most sense for binary options traders. That’s what I would say.
Other than that, I would just stay away. I really don’t know why you needed to trade Binaries. I mean, when you can just trade regular spot forex with a reputable broker. I don’t really understand that.
I think it’s just like the new thing. It’s a shiny new toy, let’s go play with it, that sort of thing. That’s cool if that’s what you want to but for me, it’s just not worth the risk. I mean if you’ve got something that works in spot forex, why don’t you just trade it as a retail spot trader and not worry about the binaries and all that.
You can look it up on the internet and you’ll see. People are getting ripped off everywhere with these binary brokers and you know it’s a real crap-shoot whether or not you’re going to be able to get your money.
You can have winning trades and they just refuse to pay out. You might not be able to withdraw your funds. All these stuffs are happening right now as we record this. I’m sure the regulators will step in but as we record this, it’s the Wild West so it’s probably not worth. To me, it’s just not. It’s just crazy so I wouldn’t do it.
Hugh: Yeah, I totally agree. Alright, thanks, Walter.