BDB has sixty second EUR-USD binary options although they cap the investment at $100/per trade...then again you could probably make 200 trades in an hour if you were so inclined.

For use on the BDB 60 sec platform, here is a very simple EUR-USD signal system based on closing price only.

Three conditions must be met

1. An 8 min high has been reached (closing prices)
2. The two subsequent 1 min closes are higher than than the previous close.
3. The close at min 10 is 5 pips or more than the close at min 8

60.16% of the time this will result in a downward correction over the next min (again based on closing price)

eg.

Year Date Time OPEN HIGH LOW CLOSE
2009 01/02/09 4:35 1.3860 1.3861 1.3859 1.3859
2009 01/02/09 4:36 1.3858 1.3859 1.3853 1.3858
2009 01/02/09 4:37 1.3858 1.3859 1.3856 1.3858
2009 01/02/09 4:38 1.3858 1.3858 1.3857 1.3857
2009 01/02/09 4:39 1.3855 1.3857 1.3855 1.3855
2009 01/02/09 4:40 1.3855 1.3857 1.3854 1.3855
2009 01/02/09 4:41 1.3855 1.3860 1.3855 1.3858
2009 01/02/09 4:42 1.3858 1.3868 1.3857 1.3866 <--8 min high (close)
2009 01/02/09 4:43 1.3865 1.3872 1.3865 1.3870 <--9 min high (close)
2009 01/02/09 4:44 1.3871 1.3875 1.3869 1.3875 <--10 min high (close), >.0005
2009 01/02/09 4:45 1.3876 1.3879 1.3871 1.3872 <--downward correction

This method was developed analyzing a data set of 946,922 minute by minute EUR-USD data points. ~2.75 years of data. The frequency of occurrence is 1.2% which means you can find ~6 signals per 8 hr day based on 1 min closing prices. By the way the converse is also true...if you find an 8 min low followed by a 9 min low followed by a 10 min low and the change between min 8 and min 10 is 5 pips (.0005) or greater there is an upward correction 61.11% of the time in the subsequent minute. Although the frequency of this situation is only .8% meaning you can find 4 signals per 8 hr day. Still, between the two, this very simple system can give you 50 signals per 40 hr week.

Total downward (put) signals in data set: 12,081. 1 min downward corrections: 7,268 (60.16%)
Total upward (call) signals in data set: 8,138. 1 min upward correction 4,973 (61.11%)

Note: Data (from supplier) was rounded to the nearest pip. I have absolutely no reason to believe this rounding affects the underlying analysis. Signals which resulted in no change in price were eliminated from the analysis. Also note that condition #2 is not critical assuming no big downward spike in min 9.

Im certain there are subsets of this data set that will yield higher percentage signals than the ones I have given here....I'm just trying to make this as simple as possible. Metaphorically speaking I am pointing to a method to find "blacksand data". Valuable enough by itself but containing much more valuable material when filtered.

My conjecture is that looking at tick data rather than 1 min closing price will give you 20-30 signals per day. Possibly 40-50.

My second conjecture is that this system (or some small variant) will be applicable to other forex pairs, indices, commodities or stock prices. In other words any asset on the BDB platform.

My third conjecture is that this signal system is scalable. What I mean by that is that instead of looking at 1 min data, you can look at 5 min or 10 min data and look for the same patterns. My observation is that chart patterns are similar to fractals in that small patterns replicate to form larger patterns isomorphic in shape but larger in size. The scaled signal system could then be used on the BDB option builder platform.

m99

Followup: I just tested this on 7 years of 5 min DJIA data, the put signals are at 57%-58% which is mildly useful, but you only get one signal per day. The call signals are at 54-55% which is not useful. So scalablity is suspect without additional conditions. Anybody have any 1 minute DJIA data?

K.I.S.S.!!

I'm not a fan of getting "technical" in terms of details like counting pips or candles. The level of detail if/when you can get there is great if it works for you. But for people interested in trading 60 seconds options, these are FAST PACE options, you're in and out, it's not like 15 min expiries. You have to time it right and enter when you see it. To do all the extra work to figure out when/where/IF to enter, is a bit much.

Also, the longest I've been able to trade consistently is like 30 minutes. If I don't see an entry within 30 minutes, I'm tired of waiting/looking and just shut it down. I don't know how you trade your 15min/30min/60min expiries, but I do S/R + trendlines / patterns, it's simple, I draw my lines and wait for price to touch, done. That's not the case for 1mins, you have to watch and correlate action because it's only 60 seconds, there's no room for error!

Unless mine sounds equally complicated to yours, then ignore me. I simply use tick chart to determine direction + wait for a trend to set up on 1min chart.

I hope I don't have to define what a trend is, but what I ideally look for is 2-3+ consecutive 1min bars + the same color tick chart to show continuation of the trend. After this "confirmation", the trades just start rolling out and by the end of the trend, there should've been 3-10+ consecutive candles, giving at least 5-10 trades.

I intend to make a video of my 60 second strat as part of my upcoming youtube video series, so if the above is unclear, just look out for it over the weekend.

Quote from cherrycoke on December 30, 2011, 23:34
i dont see the "simplicity" in this at all. but then i am looking forward to your updates on this. Good luck, you need it for this simple strategy of yours, using the 60 secs options. Not sure if you have noticed, the RR is working against your strategy.

Good point! I didn't even notice the win ratio affecting the RR!

Given an ITM of 65% up to an ITM of 75%, both with 0% OTM. This means your break even ratio ranges between 60.6% to 57.1%. So in order to profit, you need more than that. As Cherry pointed out, this system doesn't cut it.

I think you all are underestimating me a bit...

my strategy may be simpler than I described. Being some what new, I described the strategy in terms of my data analysis thinking rather than the language better understood by the traders here. My guess is that if I restate this in terms of 2 MA, 8 MA and 10 MA's, it will make more sense. Unfortunately I'm not sure I have grasped the language used here precisely enough to articulate this better...I'll work on it though. I could probably post a chart or two.

A secondary issue, perhaps incidental, perhaps not, is that I'm describing a correction strategy rather than a trend strategy. My perception is that most of the traders here identify and follow trends so a correction strategy is not immediately embraced.

As to the RR I'm acutely aware of what %ITM it takes to make a profit on any platform. My background is applied mathematics and I know the Kelly Criterion very well. After I identify any trend, I mathematically model the profitability using the Kelly Criterion and variations based on binomial distributions of the predicted ITM%. (I'm an Excel pro and MS Office even follows me on Twitter.) The only BDB sixty second trades I have done are 75% ITM. I wouldnt have posted this strategy if didnt have the possibility of being more than marginally profitable. I know the BDB returns go down after hours and yes this strategy has less appeal when the BDB returns go down to 70%. I have not seen 65% at BDB, but I will take your word for it. BTW, AUD-USD may be higher than 75%...I know the 15 min AUD-USD expiries have been 90%/1% recently compared to 79%/1% for Eur-USD.

Admittedly Im very new to trading. So far my personal methodology has been a combination of intense data analysis with a combination of real-money and demo trading based on what I see in the charts. For whatever reason I seem to be very good at knowing when the EUR/USD is due for a red correction. I think I focus there because when I started I noticed that OptionBit's predictive algorithm would be still be trending up when a correction was already underway and it was easy to take advantage of the 1-2 sec lag. It seems that sense of timing has carried over as Im doing very well identifying EUR-USD red corections at BDB. OptionBit was real money....I have a demo account at BDB. I quit OptionBit when the spreads suddenly got outrageously high.

Last comment...give me a little credit for analyzing a data set of 946,000 minutes of data. How many newbies do that much homework?

m99

For anybody who wants to fact check the Twitter comment its @sonomablue.

Quote from m99panama on December 31, 2011, 15:57
I think you all are underestimating me a bit...

my strategy may be simpler than I described ... My guess is that if I restate this in terms of 2 MA, 8 MA and 10 MA's, it will make more sense.

A secondary issue, perhaps incidental, perhaps not, is that I'm describing a correction strategy rather than a trend strategy. My perception is that most of the traders here identify and follow trends so a correction strategy is not immediately embraced.

As to the RR I'm acutely aware of what %ITM it takes to make a profit on any platform.

Last comment...give me a little credit for analyzing a data set of 946,000 minutes of data. How many newbies do that much homework?

For what it's worth, I (and maybe cherry is as well) think you're overcomplicating, no need to get defensive. This is the internet and don't feel intimidated if 3 mod's jump. Feel appreciated because we did jump in, possibly for the level of complexity and/or the fact that these are 60 second expiries which aren't very popular.

I didn't intend 1st post to be directed towards you persay, the gists of my message was to warn other people about the dangers of 60 second expiries. As for the RR post, BBinary is not the only broker that provides 60 second expiries. TradeRush offers them as well, fellow members of BOD know that I was among the first to start experimenting actively with 60 second options back in August. That's the broker that I use for 60 sec's, their ITM% ranges from 65%-70% while BBinary ranges from 70%-75%.

I'm pretty sure all 3 of us given our trading experience understood right off the bat, that you were describing a correction. Correction is merely high probability counter trend (in my opinion), which is something David and Brites have suggested I try doing. I didn't even comment on your strategy, I just provided my input so other people have a choice. If you want, I can remove my posts entirely, so as not to hijack your thread. Anyone who frequents the chat, knows all of the mods are happy to help whenever possible.

Once again, this is the internet, expect people to criticize you. Cherry pretty much posts a lot (look at her post count) and speaks her mind whenever she does. I don't post very often, but when I do, it's usually something that catches my attention. As for brites, he's always happy to provide alternatives.