The Greatest Trading Swindle - Binary Options - Part 2 by Jon McFarlane

The Greatest Trading Swindle – Binary Options – Part 2 by Jon McFarlane

The Greatest Trading Swindle – Binary Options – Part 2 by Jon McFarlane

If the Sex Pistols labelled themselves “The Greatest Rock ‘N Roll Swindle” then Binary Options can surely be labelled “The Greatest Trading Swindle”.

100% Deposit Bonus!  Make 80% in 5 minutes!

In part 1 I addressed Deposit Bonuses and in this part I will address “Make 80% in 5 minutes!”.

“Make 80% in 5 minutes!” – Sure, when trading Binary Options you can make 80% in 5 Minutes but there are two important things to bear in mind here.  First, you have to risk 100% to make a reward of 80% and secondly, you have just as much chance of losing your risk (100%) as you have of making your reward (80%).  This is because Binary Options trading is a coin flip, an already imbalanced coin flip based on the fact the broker makes 25% more than you, on EVERY bet you lose – 100% is 25% more than 80%.

To make money trading Binary Options you need to at least balance this imbalanced coin flip.  The only way to do this is to have a strategy with a (winning trade) hit rate of 56% or more.  55% or less and you will lose, here’s the simple maths (let’s use a £2,000 account again for reference):

  • 55 winning trades at £32 per trade = £1,760, 45 losing trades at £40 per trade = -£1,800, a net loss of -£40
  • 56 winning trades at £32 per trade = £1,792, 44 losing trades at £40 per trade = -£1,760, a net profit of £32 which equates to a 1.6% profit every 100 trades based on 2% risk (£40) per trade

Not convinced yet?

Your strategy must win 27.27% more times than it loses. Yes, to right the imbalanced coin flip (created by the £40 broker win amount and your £32 win amount) you must win at least 56% (56% is 27.27% greater than 44%) of the time just to make 1.6% (based on 2% risk per trade) every 100 trades. Win just 55% of the time and you make a net loss.

Now, also consider this. “Make 100% in 15 minutes!” is not actually 100% is it? Based on 2% risk per trade it is actually 1.6% which is a Risk:Reward of 5:4. Most “standard” trading strategies have a MINIMUM Risk:Reward of 1:1 with 1:2 being much more preferable. A “standard” trading system based on a Risk:Reward of 1:2 is still profitable with a hit rate of just 34%.

Need even more convincing?

I address Binary Option trading strategies in the my next article.

As promised I will end with my open offer – If you or anyone else has been profitably trading Binary Options for 12 months or more I will inform all of my members about you and your system/service.  Here are my very conservation conditions:

  • You must provide me with access to your Live account showing a profit (doesn’t matter how much) over a 12 month (or more) period and you must have traded at least once a week.
  • You must continue to trade that Live account (at least once a week) for 3 months and still show a profit (doesn’t matter how much) at the end of that 3 month period.
  • One final condition is that your risk per trade should be no more than 5% and your maximum drawdown should be no more than 50% – This is based on the fact I (and many others) consider 5% risk per trade to be more than aggressive and 50% drawdown to be less than acceptable.

[notify_box font_size=”15px” style=”green”]You are not making 80% in 5 minutes you are making 1.6% based on 2% risk per trade, a pathetic Risk:Reward of 5:4 – It means you must win 56% of the time to make even a slight profit.[/notify_box]

IMPORTANT – Jon’s book on this subject – Binary Options Trading – A Strategy Guaranteed To Beat The Brokers In 15 Minutes Flat – Is now available on Amazon HERE

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