A Novice Binary Options Trader's Adventure

Useful Tools for Chart Analysis – Bollinger Bands

Bollinger Bands

Bollinger Bands are used on trader’s graphs as indicators to demonstrate market volatility. The bands incorporate a moving average line and two standard deviation lines. To analyse the trade movements using the Bollinger Bands, you have to see whether they are converging or diverging. A convergence suggests a reduction in volatility and a divergence suggests that an asset has become volatile, and is therefore likely to move price. They are important factors to assess in gaining an entry. You should include them on your trading graphs to check to see if the time is right for your trade.

Useful website: http://bollingerbandgenius.com/

Useful Tools for Chart Analysis: Fibonacci and Moving Averages


When I first started trading, I was looking at graphs and sort of just guessing trends – are they bullish or bearish, or flat? Guesswork is no good. You have to learn when to enter a market, when to get out and learn what the candlestick graphs are actually showing. In my research today, I found out about Fibonacci and Moving Averages. Both are useful tools to implement on your trading graphs as by understanding how to use them properly you will know when to enter the market. They explain almost perfectly the underlying trends on the graphs. Below are three good vides that are well worth watching. There are more good videos in the Video section of this site which you can access using the above menu.

A Fresh Start – Back Trading


Well, my finances have recovered slightly and I’m back in the game. As of tomorrow, I’m investing $500 in Banc De Binary – That $500 will be doubled to $1000 with the signup bonus so I shall have a nice balance to play with. I’ve been researching the best brokers and Banc De Binary are consistently reviewed as being the best. I’ve had a good chat with one of the advisors there and he’s filled me full of confidence.

To help me with signals and to help learn how to trade properly, I’ve also signed up with Binary Options Free or Intellitraders – They’re going to give me pro signals to advise me on my trades and I look forward to the 75% return rate they promise. I shall keep you informed of how the trading goes. I have decided to tweet all my results so you’ll be able to see for yourselves, how, on a daily basis, my profit / loss goes.

The Importance of Charts

Japanese Candlestick Chart

I had been trading blind, really. I’d been following the trends on the brokers’ websites. These graphs aren’t detailed enough to analyse properly. After scouting around a bit I found the IBFX MT4 platform which was free to install. You get much more detailed graphs of the stock, which you can extend back in time and scale to whatever time frame you like. The graphs which are most useful for traders are Japanese Candlestick charts. As illustrated above, these charts comprise of little bars, either green or red, showing up or down and according to scale they show the stocks highs and lows for each scale unit.

Whatever platform you use for your charts, make sure you can draw lines etc on it, so that you can visualise the actual trends. As for analysing the graphs, perhaps the experts know far more than a mere novice such as myself. I needed to research what patterns to look for and I found this excellent Visual Training Guide from Fennelly And Co Ltd. It’s in pdf format and can be seen here http://media.wix.com/ugd/56d156_d58ad5d3f2bd4d4e84cbf60acbbd4a22.pdf

As you can see, it gets quite complicated. But now I guess, by putting these techniques into practice I can be on the way to generating my own signals. I’ll be on the lookout for flag and pennant formations. And be in the money, for sure!

A Disastrous Second Day Of Trading

I woke up feeling refreshed and keen to learn more about Binary Options. I set up accounts with three other brokers. I was trying to get the new robot I’d purchased working but couldn’t link it up to my accounts. The glowing lines on the trading graphs enticed me in and I couldn’t wait to start making money. I got involved. Automatically I was chasing losses. I started betting on silly things like one minute expiries and losing cash quickly. At the touch of the button you can fry your money so easily. I discovered what doubling up did and when s trade started initially going in the wrong direction, I thought it’s OK, it will turn, I’ll just take a better price now and double up. I was going in at $100 a trade. With the new brokers I’d got between 50% and 100% signup bonuses so there was plenty of funds to play with. I looked into these bonuses and apparently you can’t withdraw until you’ve completed 20 times the bonus amount in trade volume, so it is a bit of a con… JUST WATCH OUT!

I realised I knew very little and needed help. I’d been hearing a lot about signals and after a bit of surfing, found what seemed a reputable firm, promising 75% success rates. For $14, I got a 14 day trial period of texts to my phone and emails, advising me what options to take. I thought I had it sealed and started backing the signals, but only about 33% of them were proving successful.

After a long and frustrating day where I was chasing losses from the start, I finally exhausted literally all my money. In two days of trading I had lost £800 (about $1200), more if you include the bonuses that had disappeared also. I felt depressed and saddened, but I was still keen on this new line of work. I know that money can be made on these markets. I just had to do my research. It was back to the drawing board. I wouldn’t be able to trade for real money for a week or two when my bank funds allowed it. I thought I’d use my time wisely and plan and research. One of the earliest ideas that came to me was to create this website. I had hoards of emails flying in and was surfing the web in every direction. I wanted a blog-based site where I could record information for my own use as much as anything else. Krakatoa Trade was born and I had to recoup my early losses. It was time to hit the books.

I am a Robot

Well – what next? In my trawling the web I cam across the idea of automatic trading. Out there on the market there were robots that automatically controlled your trading platform and bet using their signals on your account. They were offering amazing payouts, and you literally had to do nothing. Just sit back and relax and watch your money roll in. It sounded a bit too good to be true but this was a cake I wanted in on.

I settled about the Binary Trading Robot from http://jvz8.com/c/134504/44001

It cost $47 with paypal and offered a 60 day money back guarantee if you weren’t satisfied. I had a good look and looking at the videos, it was clear that the site’s owner, Jerry Biener, had a huge profit showing in his trading account… Over a million dollars… I wanted in on the action.

I started setting the product up and to do so had to sign up to a new trading platform using the site’s links. I would need to invest more money to set this thing going. I set up with Trader XP and deposited £200 which was matched by a £100 signup bonus. I am still waiting for the accounts to be linked so cannot start trading just yet with the robot. I will let you know how I progress with this. I have read mixed reviews on the net about robots with many claiming it is a scam but also there are stories of people turning good profits. I do hope it works.

My First Trade

I discovered a broker pretty rapidly though my initial surfing and signed up with GlobalTrader365 http://globaltrader365.com A pleasant broker from that company over in the USA telephoned me almost immediately and I was pleased to hear that my initial deposit would be granted a 100% signup bonus. I had some spare funds in my bank account and decided to invest an intial $300 which is about £200. This was matched so I had $600 in my account to play around with. I was keen to get going so, having worked out how to proceed, I placed my first $25 trade. $25 is the minimum amount you can invest on a single trade. I picked that the EUR/USD would rise over a ten minute expiry and unfortunately it didn’t, but watching the moving graph undulate for ten minutes was great fun and instantly I was hooked. Two trades later, one on the USD/JAP going down and another on the EUR/USD going up and still I was without a win… Then it happened. I placed a call on the USD/JAP rather than the previous put and ten minutes later, it came in and I won $43 (including the $25 investment). I was thrilled and got carried away, putting 4 simultaneous trades with my winnings. One failed but 3 came in. I had branched out to USD/CHF which lost but two USD/JAP and one EUR/USD came in – I was now in profit. I realised that this scam email had truth in it. Before the weekend I would be $20000 richer and the bubbly would be on me!

It gets very addictive, placing your first trades. A proper gambler’s rush. I got carried away and just following the trends on the graphs on the broker’s site seemed the easiest way to continue. It was either bearish (up) or bullish (down) or somewhere inbetween, a level horizontal line trend. I tried to avoid the ones with no definite trend, and also the ones which showed reversals from the trend. I figured these were no-gos. The sheer multitude of options available, different currency pairs, meant that by scanning around there was plenty of scope to find a big bull or bear on offer. I was winning one, losing one and my balance was creeping down and then I hit a losing streak. Six in a row, all losing. I remembered the advice about doubling up and started trading $50 at a time. One drew, where it finished exactly level at the price, giving you your money back and then one won. I lost a $40 trade and then won another $50. I realised from my old gambling days that I was already chasing losses which is never healthy but the adrenaline was flowing. Sensibly I backed down to $25 trades. I was doing well on the USD/JAP and had been basing my trading on the fact that the US dollar was performing very strongly against the Japanese currency. I put this down to the fact that the Asian markets must have been closed and all the patriotic New Yorkers were backing their money to win. A bit naive I now realise, but these things go through your head. The EUR/USD however, was proving a nightmare. It was very much undulating and over several hours I noticed it went from bull to bear faster than an Ovid Metamorphosis. I was losing the majority of these trades. Another bad run and I found myself doubling up again. This time, however, my luck had run out. 4 large trades and only one $50 won. That was $87.50 return on a $200 investment. I had already lost all the initial signup bonus and was eating well into my initial capital. I realised it was time to go back to the drawing board. I’d been having great fun, but I knew I had to research more. I started surfing again, but was still hooked on trading, I stuck to the USD/JAP and bet away, larger and larger, stepping up to $57 investments and then, down to my last $87 and with it getting on to 1.00 in the morning I threw it all at a call which ultimately lost. I had fried $600 in one day with one broker. I was angry and upset, but thought about it and realised I had enjoyed my experience. I could make money being a binary trader, I was convinced. I just needed a plan. I started hearing about money management policies and did some really decent tutorial videos which advised on sensible 5/15 trade percentage policies with a 10/30 for aggressive traders. This meant never betting more than 5% of your total portfolio value on a single trade (10% aggressive) and never exceeding more than 15% (or 30 aggressive) of your portfolio value on simultaneous trades, thus limiting you to 3 simultaneous trades. I slept like a baby that night, after a tiresome day’s trading. My dreams had graphs whirring around in them, green and red. I was on the floor of the stock exchange, tic-tacking about and at one point I saw a helicopter emerge from a big oak tree with pilots flying me up into the sky. It was pie in the sky, Leonardo Da Vinci -esque. The technology had brought man from nature into the digital revolution. I was going to make a fortune as a trader. I was there for the long stay. Next morning I jumped out of bed, fresh as a daisy. Time for a day on the floors. And time to make my fortune!

Introduction to Krakatoa Trade

72 hours ago I opened a random email which at first I thought was just spam. It introduced me to Binary Trading. Binary Options Trading is a simple means of gambling on the stock market. You place simple bets over set expiry times for prices of a certain stock / currency pair / exchange to either rise (Call) or fall (Put). I did some basic research and within an hour or so began trading. I have thoroughly enjoyed the past three days and being a bit of an internet junkie, I decided to set up a blog-based website to record my activities. The aim of Krakatoa Trade is to provide me a diary of what I’ve been up to as I learn this new line of work. Also, I felt I would open it up to the public, to maybe educate and help people who might use this form of trading to line their own pockets. I’m sure it will be an adventure whatever the outcome. Your feedback is encouraged and any help you may be able to offer me in my quest for financial success would be very much obliged. Thanks. Enjoy Krakatoa Trade!

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