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FX Binary Options Scalper Strategy – Bullshit or Real?

Full Review of the FX Binary Options Scalper

Boiled to down to its essence this is just another hyped up “sure thing” for binary options traders who “crave…fast action”. The system was developed for 60 second options, a trading vehicle with highly dubious value as an investment (For more info on this strategy by the developer -http://fxbinaryoptionscalper.com/). In fact, the author even admits that short term trades of the type he describes are nothing more than “gambling” and that technical indicators are of little use.  So, just how does he claim to provide this sure thing? With binary options scalping, a much lamented form of trading that has been gaining popularity with large scale forex and algorithmic traders.

 

In his advertisement, and that is just what this is, an advertisement, he builds up the need for a good strategy to trade in the 60 second time frame.  The letter, as it is put forth, is addressed to “trading partner” and is signed only “Trader Ed”.  If this strategy is so good and makes you so much money why can’t you tell us your name? Well, anyway, Trader Ed claims that he has devised a strategy that guarantees more winning trades than losers.  He also claims that with his system signals are generated multiple times a day on the same instrument. He claims that by utilizing his signal generating techniques and options scalping strategies you too can make 11 out of 12 winning trades in under four hours!

 

Sounds too good to be true, doesn’t it?  That’s because it is.  For one, no strategy can generate that many winning trades for long.  Technical analysis assumes that the market will learn of the strategy and adjust to cancel it out.  For another, the underlying strategy for his system is flawed.  He claims there is little to no risk but as I see it there is unlimited risk and really no guarantee of success.

 

What Is Option Scalping?

Option scalping is a binary options strategy developed in the forex markets. The technique is based on super short term trades and very small movements in the underlying currency pair. The technique has been around for many years but is getting more attention from retail investors now that binary options trading is more widespread. The system is based on the assumption that you can profit in small movements in currency pairs in a short period of time. As an example, if the USD/JPY moves 2 pips in 2 minutes you could theoretically make $10 on the trade. This by itself is not enough to overcome commissions or provide an attractive risk/reward ratio but if you increase your trade by 10%, 100% or more you can start making $100 or $1000 in the same 2 minutes. In theory your risk is limited because your time in trade is limited.  By trading in this way multiple times in one day traders can return fairly large amounts of profits.  The risk is that there is no guarantee that a trade will move the direction you want in the time you have allotted, or that you will be able to get out of the trade avoiding slippage.

 

Why FX Binary Options Scalper Doesn’t Suck

FX Binary Options Scalper Doesn’t Suck because it does offer some form of system for trading 60 second binary options.  Even though I think that 60 second options are pointless and that this system is inherently sucky.  After reading this strategy, and learning more about binary option scalping, I can see that 60 second options were probably invented for just this kind of trading. The average investor can’t trade traditional forex markets profitably using a scalping strategy, it takes too much capital.  In order to make $100 bucks on only a pip or two of movement you would have to trade $1,000’s or $10,000’s.  This is just not realistic for most retail investors who wish to keep some kind of money management system in play for their accounts. Binary options make options scalping feasible.  You can trade as much or as little as you want and expect to either lose it all or make back your investment plus the prearranged return.

 

Why FX Binary Options Scalper Sucks

This trading system sucks because there is no guarantee that the trade will move the direction you want it to within a few minutes. What happens when you enter a trade and it moves the wrong way? Do you hold it and pray for the best? With most binary options platforms you will have to because binary options trading is usually an all or nothing proposition.   Even if your platform does offer early out options, most of the ones I know of that do don’t allow it after the option enters its “waiting for expiration” window.  Further, the author, Trader Ed, cancels out his own claims for finding a working system with his own words.  In the first paragraph of his letter he states that trading in the 60 second time frame is “just pure luck and gambling”.  After he says this how can you believe that he believes he really has a good system!

 

My Last Word On FX Binary Options Scalper

My last word on FX Binary Options Scalper is don’t waste your money.  Based on Trader Ed’s own words 60 second options are gambling and technical indicators won’t work. If you really want to trade 60 second options I think you will have just as much luck flipping a coin or using some other indicator as you will using his system.  Ironically, his own system is based on the same technical indicators he claims don’t work. 

 

 

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