Posted In: Forex Trading Posted On: 2020/06/13 13:30 PM Posted By: ituglobal
A few weeks ago, we mentioned that we were testing our BO trading system on Volatility Indices (VIs).
Primarily the strategy was developed on currency markets, but we discovered something interesting after 5 weeks of testing on VIs.
In order to know more details about the testing, please visit here: http://www.ituglobalfx.com.ng/blog/posts/were-testing-our-binary-options-strategy-on-volatility-indices
These are what we discovered during the period of testing:
A. Trading BO on VIs offers better reward that trading it on FX. For example, if we risk 200 USD on an FX pair, we get an average of 125 USD if we win; whereas we will be given an average of 185 USD if the risk was on VIs.
Although there are times you get even 200 USD if you risk 200 USD on a popular currency like EURUSD, but such occurrence is extremely rare.
That means we get less than 65 USD if we risk 100 USD on FX, but we get around 92.5 USD if we risk the same amount on VIs. Therefore, the hit rate we need to survive on VIs is slightly less than the hit rate we need to survive on FX. This reduces the pressure on us.
If we need 85% to survive on FX, then we need only 70% to survive on VIs (whereas we cannot lose more than our stake on both financial instruments). The higher the rewards, the lower the accuracy needed to survive and vice versa.
B. The results of our trades on VIs are slightly better than the results of our trades on FX.
A. The results on VIs are more stable. More stability. We got about 5% better returns than the results on FX.
B. There is less drawdown on VIs when compared to FX. The equity curves on VIs are less volatile than the equity curves on FX.
We know that trading our BO strategy is OK for us, but we would not ignore opportunities for better results. When we test a new idea, it can be worse than the one we’re currently using: But we would switch to a better trading idea if it proves to be better than the one we’re using.
This is the only way to go ahead and have permanent success.
You may contact us to get our strategy or have us manage funds for you.
To fund and withdraw with Neteller, please visit: www.instantforex.com.ng