Trade Binary Options

How to Trade Binary Options

General Risk Warning:

The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
  1. Binary options – the world’s financial instrument. They allow traders to  from price movements across all the world’s markets.
  2. There are only 2 types of transactions you can make with binary options: CALL and PUT.

The IQ Option platform allows our traders to make investments starting from just $1.



  1. Call – Option for rising prices. If you believe the price is about to go up, choose this option.

PUT – Option for falling prices. Buy this option when you expect the price to decrease.

If you see on the chart that the price isn’t rising or falling, that means that right now there’s a “neutral trend.” In this case, it’s best to hold off on buying this option. Consider choosing a different asset to invest in.

Trend examples:

2 3


  1. Never invest more than 2% of your capital in a single option. This is the golden rule for any investor. This way you can manage your investing without losing your head…or your money
  2. In order to improve the quality of your results, use technical & fundamental market analysis.
  3. Try different asset classes. If you’re not getting results with currency pairs, try stock indices. On IQ Option you can  find over 500 types of assets, including Amazon, Facebook, and Google.
  4. Sign up for IQ Option’s, where you’ll find out how to analyze trends, choose a trading pattern, and personally answer any questions you may have.

How to register & trade on IQ Option

General Risk Warning:

The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

General Risk Warning:

The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

Two years anniversary of this blog and a closing summary

Thank you

2 years, 47 posts, 22k page views…

I started this blog in December 2013 to share my story of becoming a consistently profitable forex trader, to help myself clarify my thoughts and plans, and to get some more motivation to follow my own trading plan.

Now in December 2015 I believe I can say that this blog has met the objective stated above 🙂 
And I hope it offered some helpful perspective and materials to my readers.

At this point I am most likely to discontinue posting here, but the materials will remain available online.

I will continue to be active in the markets and I will now most likely focus on strategies that offer the highest return vs. time spent on trading… such as weekly momentum stocks strategy and a portfolio of ETFs that I will re-balance quarterly.

Trend following system on forex and commodities, using daily bars… I continue to think is a good strategy and yet I came to realize that its time requirements and capital requirements to make trading it really worthwhile… are somewhat higher than I estimated.

And so I felt like sharing this insight also here, in all honesty. But anyway most aspiring traders will need to experience this on their own vs. just reading about it.

Thank you and all the best in 2016 and beyond. 

Two great trading books

Two great trading books I’d like to recommend

1. Stocks on the Move (link)
2. Following the Trend (link)
by Andreas F. Clenow

His website is here.

What is absolutely unique about these books:

  • mechanical properly backtested system, fully disclosed, tested on a large sample of markets and long period of time, with great results, with results that can be verified
  • a story how it would likely feel like to trade the strategy, year by year, very powerful, so true… and those who actually traded a strategy will understand this part very well
  • hints on how to properly test the systems: right data, considering dividents, special events; portfolio re-balancing, right benchmark, etc. Plus a unique, and critical, view on Wall Street and S&P500.
I very much recommend them (this is not affilate link, this is an unbiased reco).
I actually am planning to implement the stratgies from the book, on another account dedicated for them.
Again, I really recommend these two books.

New resources

New resources and tools I use

This is to share a couple of resources I am using now and I am finding them very helpful.


I now use trello boards and lists as my trading journal. I have a trading “board”, then I have a list for each strategy or technique or system that I trade, and then an “item” for each market or currency pair. As I open each item, I paste chart screenshots and record my comments. It is very visual, very easy to find things, easy to use. It also makes it easy to share charts with a get image URL function.

Portable MT4

I have my MetaTrader 4 installations on And I launch terminal.exe with a /portable option. As a result, it stores the data in its sub-folder only. And box synchronizes it automatically across different PCs I am using.  Very effective productivity help this is for me.  For example, when I add a new script or chart template… it automatically gets added on all my PCs.  And backed up.

I am finding this blog very relevant and inspiring, also authentic. Comments discussions are also valuable.

Password manager

I really got tired of situations where I forgot the password. So I started using a password manager. It gets the job done. Search for a “password manager” and choose the right for you. Open source is a plus, as the community can check the source code to validate the security features.
In terms of my trading strategies… as my approach evolves I currently focus on a flawless execution of two strategies that I deeply backtested, both on a daily time frame, traded end-of-day. One is trend-following type, the other one is shorter-term and based on a candle pattern.

End of day Trend Following system rules

This is to present an end-of-day trend following trading system rules

trend following system rules

Here I will provide specific rules for a trend following system I backtested and I believe it can be profitable.

It can be traded at the end-of-day, i.e. once per day, by spending 5-15 minutes per day to go through ~30 major forex and commodities markets, search for setups, place orders, manage existing positions.

It has a potential to be a profitable system moving forward. I know it has been profitable over the last 15 years, based on backtesting. Of course, not at all times and not across all markets, but generally, on a portfolio level, it has been profitable! I coded it as a EA in MT4 and tested. Equity curves look good for most forex and commodity markets, as well as equity indices. Again, this is not a holy grail, 66% of trades are losers, and per market there are 2-3 years drawdowns.  If this discourages your from trading it, I understand. But this system is robust. It is profitable on a wide range of parameters and markets. It is not curve fitted. Winners are a few times larger than losers.

It is a trend following kind of system. Read more about this approach, e.g. Michael Covel books. In short, it will buy when something is going up and it will sell when it starts going down. It will lose money in ranging markets, but it will surely participate in, and profit from, big moves. It will not predict them, it will react and follow. It is similar to the turtle’s system you may have heard about. They used 50 days breakout for entry, I use RSI, and it showed better results in backtests than using channel breakouts for entry.

The rules
Open a long position if RSI(20) is above 65. Note this is contrary to popular use. It opens a long trade if the price is going up. This is a trend following!

Open a short position is RSI is below 35.

Initial and emergency stop loss at 7*ATR(20). This is a very wide stop, trade small positions, e.g. 0.02 lots to make sure losses are small & acceptable, e.g. around 1% of your trading capital loss per trade.

Close a long position if the price prints a 50 days low.
Close a short position if the price prints a 50 days high.

Position entry method: at market on close.

Position closing method: if the price closes below the 50 days low, exit at market.
If it protrudes but rejects the 50 days low, i.e. shows a false break, then place a stop loss below last bar low (i.e. move the initial stop to the new level).

Trade with this system all liquid majors and commodity markets. It can also be traded on equity indices, but I would trade it long only. Although in backtests it made a lot of money in 2008 shorting S&P500, note this is a long term system and long term the equity indices are designed in a way that they go up.  For commodities, of course be careful about gaps, limits, contracts roll-overs and expirations.

Use a trustworthy and low cost broker. Consider spreads and swaps (roll-over cost) as this system holds positions for days or weeks and sometimes months.

Backtest it manually before trading it. Trade it only if it shows positive results on a portfolio level over a sample of at least a few hundred trades.  Yes, a few hundred. Trade it on a separate account, to easily be able to track the results of this specific system. Once you decide to trade it, just follow the rules. It requires almost no thinking.

Trade it only if you accept the drawdown levels and losing streaks, as seen in the backtest, in fact, assume 2x larger ones and 2x longer series of losing trades.

That’s what I do. I trade this as one of my actively traded strategies. For a while I ran a public journal on forex factory with a very similar trend following system (at a time I used channel breakouts) and I made money (luckily there were a few big trends at a time I ran the journal for 3 months).

I hope you will find it helpful. I searched for long time for a “holy grail”, or a system that I could trade end-of-day, on a variety of markets, that I trust has an edge. This is what I found.  This is best what I have found so far.  It is simple and I believe it can be profitable.

Technically, it is easy to trade.

Difficulty in making money trading this system, especially if traded in size, lies in the fact that it has significant expected drawdowns and losing streaks, but they are a natural consequence of using a trend following system.

I am starting to trade this and I may provide an update some time from now. In backtests this system took 30-40 trades per market between 2000 and 2014, so it is just 2-3 trades per year per market. So it will take time to see any statistically significant results of trading this method.

Good things about this method: it is low cost (not many trades), makes money independently from trends in equity markets (in fact, in case of a bear market, likely there will be trends on a few forex and commodity markets, which this system will benefit from), it requires little time (just minutes per day, at the end of the day).

In summary, I presented a trend following system, with specific trading rules, that can be used in a mechanical way, it has been backtested and it has been profitable over 2000-2014 period on most major markets, with the same parameters. I hope you will find this beneficial.  I surely would have appreciated someone showing me this a few years ago.

Great book and a real profitable trader who shares his learnings

I wanted to share two links today

One is a website of Oli Hille at
He is authentic, a real trader, consistently profitable one, and sharing his valuable lessons with others.

The other one is a book by Brent Penfold, “The Universal Principles of Successful Trading”.
I found it very relevant, inspiring in spite of some pessimism there.
Very realistic, very authentic, I can certainly relate to many experiences the author shared and I am finding his solutions very practical and real.

In fact, while I continue to trade discretionary trend following system today, I am planing to re-open the project of qualifying an automated trading system, to backtest is mechanically, and then trade manually.

I hope you will enjoy the two resources I shared.

It is so simple!

It is so simple.

trading action plan wordle


How to become a consistently profitable trader?

Here is the action plan to become a pro trader, in its simplest form:

  1. find and learn to trade a profitable trading system
  2. execute it flawlessly

That’s it.  Simple yet hard. 

I am not there yet. Writing helps me clarify my approach. Those who traded for a while will understand what I mean.

If I had a chance to read this “action plan” a few years ago, I would probably think: “blah, blah, just share a profitable trading system and I can make money”. Yeah, this is less simple, now I know. Read on.

To actually execute this action plan, we need more answers. 

How to find a profitable trading system that is right for you?

What is a trading system? A trading method, strategy, approach. This is what I mean here, not necessarily a mechanical “system”.

How to find the system that is right for you? Or more than one, for different market conditions or use depending on how much time you have available.

How to effectively learn to trade it? What tools, methods, how to test and qualify it? How to tell if it is good?

How to build discipline to execute the system with consistently high quality? Managing the risk, taking trades only if and always when all criteria are met.

Each question above can be answered in one sentence, or it can be a topic for a book, or a blog post. This will be topics for my posts over next months, feel free to subscribe if it looks interesting.

If you are earlier than me in your trading journey, in case you think “just share a good trading system rules and anyone can make money trading it”, here you go:

  1. Find a trending market. It will have higher highs and higher lows. EMA 20 above EMA 50. EMA 50 slope up (reverse for downtrend).
  2. Look for a candle that touched the EMA 20. It is called pullback or retracement or a correction. In uptrends, we want the low if this candle to be below EMA 20. We still want it to close above EMA 50. This is a trigger candle. It should be a relatively small candle in terms of its range.
  3. Place a buy stop order above the high of the trigger candle. Stop loss below the low of the trigger candle. Position size such that – if the stop is hit – you will lose a small amount of money that you are comfortable with losing. If the next bar does not make a higher high and so your order is not filled, update the order.
  4. If you are filled, trail the stop behind the last low, or the last bar, depending on your preference on letting the winners run vs. grabbing a quick profit.


  • You can experiment with different EMA parameters.
  • Before you trade it, qualify this setup.
  • Of course this is not a holy grail, but I believe this is a potentially profitable trading strategy. It is simple. It looks for low risk places to join the trend.
  • Choice of markets is also key, scan many markets (forex, stock indices, commodities, ETFs) and apply this strategy to ones that are trending. Watch out for correlated positions.
  • Timeframe is anything from hourly to weekly, depending on how much time you have available, as you should check the chart every bar.

Will you do this? A few things make it hard: there will be series or losing trades in a row, there will be “giving back” a lot of paper profits, most of the trades will be losers, but, if executed right, there will be small number of trades that are big winners, a few times bigger than initial loss, making this overall potentially profitable.

If you are more experienced than me in your trading journey, and reading this anyway, please feel free to share any comments or insights. I will appreciate it a lot, I am trying to learn a new thing every day.

Zen Habits

I recommend a Zen Habits blog by Leo Babauta at

His guidance for simplicity, meditation, focus, ways to implement good habits… I am finding all of this very related to forx trading!

Think about this. Good habits, which Leo on his blog provides lots of ideas how to build, are something you need to become a consistently profitable trader: habit to journal the trades, to test new systems, to properly review the markets, to approach trading in a calm and controlled way, etc.

Another one is simplicity that he is calling for… simple trading systems are ususally the ones that work best. Often thing as simple as buying on the break of the candle that touched the EMA 20, if we a re in an uptrend is better than a very complex system with lots of indicators.

See it for yourself 🙂
I am finding Zen Habits materials very helpful and I hope you will as well.

BTW, I am repeating myself, I shared a link to this back in my January 2014 post 😉

Back to basics – Trend Following and Channel Breakouts

Trend Following – and a specific system well-defined

trend following channel breakout

“Trend is your friend” and trend following systems provide an edge, and forex is the right market to trade the trend following systems because it often trends… lots of good books and pro trades say this.

OK, great, but many people including myself ask: “Fantastic, sounds good, I buy it, but how?”  How exactly to trade? How do I do “trend following”?

Read on for my take on the channel breakout system, as defined by Courtney Smith in his book called: “How to Make a Living Trading Foreign Exchange: A Guaranteed Income for Life“.

It offers a specific, almost mechanical set of rules to trade forex, in a trend following method, on an end of day basis.

The system, in a nutshell… Channel Breakout: it is to place a buy stop above the last 55-days high. Stop loss at the last bar. Exit if the price does not close above the channel for the first two days, exit if ADX turns down from 40, and trail the stop to last 20 days low. Reverse the rules for short. You can also use a multi-unit tactic and exit half of the trade, for profit at around 1R, i.e. a distance of the initial stop.

ADX shows a strength of a trend. If it is above 35-40, it means trend is very strong, if it then turns down, it indicates a trend may soon reverse or at least correct.

Buying the break of 55 high ensures we will participate in a big trend, if there is a big trend. Last bar stop and a rejection rule make our losses small. Trailing the stop lets the profits run and not exit on a noise, while exiting on ADX turn down often let’s us exit close to the top.

Lastly, there is an ADX filter: the buy stop order should be in place only if the ADX is raising, i.e. the trend is gaining strength. Buy stop order needs to look at Ask price, sell top at Bid, of course.

For buy stop and sell stop orders, we add 3 pips for majors and 5 pips for crosses to avoid some false breaks. See below how to try to profit from some false breaks.

We can trade a “ride the rejection rule” setup, from the Courtney book. If the price fails to close above the breakout channel level for the first two days, we exit at market on close and reverse the position, and close it on the following day, hopefully at profit, while the stop loss on this setup is above last bar high.

For a full description of the system, please get the book. I am not selling it, this is not an affiliate link, I just recommend it.

I believe it is a good approach to forex trading and am starting to test it now, you can follow it in this journal on forex factory.