SlopefestV!: The time rapidly approaches for the gathering of THE Tribe, Slopers from around the country and even beyond. Now scheduled for May 18 and 19, 2013 in Las Vegas (where else?). Come and meet with old friends and make new ones! Match up avatars and handles with REAL people!! I can guarantee you one thing in this life for certain, you will have a great time! With any luck, our gracious host, Mr. Tim Knight, will also join us. For those of you who have not met him in person, you are in for a treat. Though notoriously reclusive and a home body, perhaps he can be persuaded to get out of Palo Alto and join us for a rollicking good time.
All of us are afraid of something. To say or think you are not afraid of anything is self delusion. Lack of fear is not bravery either. Bravery is being afraid and still following through and taking care of the task at hand.
There are two fears we must overcome to be successful traders as these two fears will hinder and handicap your ability to make money while trading markets. These fears can freeze you in your tracks. Not only will they hinder your abilities as a trader but but also handicap you in all other aspects of life as well.
Keeping fully in mind that NOBODY knows what happens next as well as the Zurich Major Axiom 4: On Forecasts..Human behavior cannot be predicted. Distrust anyone who claims to know the future, however dimly. Nobody has the foggiest notion of what will happen in the future. Nobody. Never lose sight of the possibility you have made a bad bet….I do recommend that you take a look at ALL the Zurich Axioms at your leisure. They can be found here.
Or in the immortal words the great Yogi Berra: The future ain't what it used to be. That being said, making predictions is so much fun, I cannot resist doing it. I think predicting the future is hard wired into us as a specie. What we CAN do is take a look at probabilities about the future and attempt to come to some idea of what the higher and lower probabilities of what happens next to be. That is what I will attempt to do with this post. These are my views and observations.
This is a follow up post to a post I did back on May 27,
2012 on the European binary options which is what I was trading at the time.
Here is a link to that post. http://slopeofhope.com/2012/05/binary-options-market-sniper.html . Since then, I also started trading binaries on
the NADEX (North American Derivatives Exchange) and have shut down my
trading of binaries through European binary brokers. The counter party risk in
continuing to trade through European brokers I feel is unacceptable.
Unfortunately, at this time, you must be a resident of the United States to
trade on the NADEX.
Most are familiar with the movie series The Matrix in which reality was totally divorced from perception. I believe we are faced with the same situation when we, as traders, engage the markets now.
Formerly relatively free markets have been replaced by The Matrix. Markets that, over a long period of time, reacted to fundamentals and over shorter periods of time reacted to supply and demand factors no longer exist. All of that has been replaced by The Matrix leading some to even question the validity of technical analysis.
Does it not seem that what used to work fairly well no longer does? Or works so sporadically as to call the usefulness of what we used to do into question? Does volume matter with the advent of dark pool trading and high frequency trading (HFT) machines? Does it seem that things no longer trend well at all? When you do identify a trend, it tends to end abruptly? Seeing a lot of chart patterns that used to work well fail more consistently than leading to the next technical expectation as to direction?
While relaxing on a Saturday afternoon, doing some market related work, I thought I would pass this on to my fellow traders on The Slope.
A while ago, I listened in on a video done by Tim Bourquin who has interviewed hundreds of successful traders. He has distilled some excellent points here that he keeps hearing over and over again. Said in different ways but the messages are the same. Here are actually 31 "habits" and in a few instances I have added a few comments to them. Some over lap as well. You would do well to incorporate these "concepts" into your trading. Tim Bourquin has done some excellent work in the area of trader psychology and great interviews with superior traders. You might want to visit his site. Here is a link to his latest work.
Binary options are fairly new to the speculation/trading landscape. They are called binary options as there can only be two possible outcomes. There are two types. Either cash-or-nothing binary options or asset-or-nothing binary options. They are binary in that you get all or nothing. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and Fixed Return Options (FROs) (on the AMEX). Binary options are usually European-style options.
There are two ways of going with this as well. There is exchange traded binary options such as offered on the NADEX and there is non-exchange traded options. Each are structured differently. With exchange traded binaries, there is a set strike price. With most non-exchange traded binary options, you set the strike price upon entry. Your strike is your entry in the trade. It then expires in or out of the money. Structure of payouts are also different. Both Amex and CBOE listed options have values between $0 and $1, with a multiplier of 100, and tick size of $0.01, and are cash settled. In 2009 Nadex, the North American Derivatives Exchange, launched and now offers a suite of binary options vehicles. Nadex binary options are available on a range Stock Index Futures, Spot Forex, Commodity Futures, and Economic Events.