Options Trader - The First Profitable Expert Advisor for Binary Options

Hello, dear traders! Currently, binary options trade is gaining more popularity, many brokers allow you to trade them on a platform like MetaTrader 4. In spite of this, trading is mainly manual and there are no intelligent advisors for the binary options trading. So, I decided to eliminate this very injustice and want to present you a stable profitable trading advisor for binary options called OptionsTrader.

Prologue

Frankly, until recently, I greatly underestimated the possibilities that open when trading binary options. But the adviser, which my colleagues Sergei and Dmitry have created, made me, a lover of automated trading, experiment with this advisor. For that Sergei and Dmitry, thank you so much!

But in reality, it was not so easy. And there are several reasons - incorrect calculation of the test results for the options from MT4, the lack of historical data for testing and many others. But first things first.

So, I opened a demo account to trade American binary options. I found out that the European options are not suitable for this advisor, after spending a few days on testing attempts. Further complexity was to conduct tests, but first, I want to say a few words about the advisor and the principle of its work.

Advisor characteristics

Platform: Metatrader 4
Advisor version: 2.0
Currency pairs: AUDCAD, AUDCHF, AUDNZD, AUDUSD, CADCHF, CHFJPY, EURAUD, EURCAD, EURCHF, EURGBP, EURNZD, EURUSD, GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPUSD, NZDJPY, NZDUSD, USDCHF
Timeframe: М5
Operation time: round the clock
Option types: American, 85% to win, 20% on long-term closure of a profitable position, -10% penalty on long-term closure (details about the formula of profit calculation can be found on the broker website)
Broker: Grand Capital

Installation information

Install the Advisor by the standard instructions.

Attention! As the adviser does not work in the Forex market, but on binary options, it has its own test specifics, which I’ll discuss below. Test results from the terminal are calculated incorrectly, and have nothing to do with the real results!

Attention! In this Expert Advisor settings significantly affect the trading results, use the recommended preset-files (see archive at the end of this article).

Advisor strategy

Advisor strategy is very simple. Exponential moving average with a period of KCPeriod is built, and then around the top and bottom, two more lines at a distance equal to the ATR indicator readings with a period KAtrPeriod multiplied by KCDev are constructed. If the price is currently above (for sales) or below (for buys), respectively the upper or lower boundary of the channel, and one of the oscillators at overbought or oversold zone, buy Call or Put option with an expiration time equal to the Expiration parameter in the settings of the robot.

We use as the oscillators CCI with the period of CCIPeriod and the level CCIEnterLevel or WPR with the period of WPRPeriod and the level WPREnterLevel. Advisor also uses a filter. It serves to disable live trading with too high MaxVol or too low MinVol volatility that is calculated by the ATR indicator with a period of ATRPer.

It is also possible to disallow live trading in any day of the week, or even set up three breaks in the trade when adviser will not be allowed to trade during the day.

Examples of EA work

Expert Advisor backtests

Backtests are made on each pair individually, as Metatrader 4 platform does not allow for multicurrency tests. Moreover, the MT4 does not allow at all to get the test results of binary options advisors. Therefore, I created a special set of features to test various pairs. What do you need to do to conduct a test of this advisor?

Export the quotes from the terminal of any broker, preferably Alpari. Type of account does not matter. Push F2 and get into the “History”.

Choose the right pair for us, choose TF 1 minute, click “Download”. On top, you should see the number of quotes loaded (4). If you see something like 0/6363792, restart the terminal and try again. If you see something like 65000/6363792, get out of the archive and go to the tab Tools - Options or press Ctrl + O. There on the “Charts” tab, set the maximum value in the fields in the “Max. bars of history” and “Max. bars in the window”, and then download it again. Click “Export” (3) and save the file in a convenient location. Repeat the same for all periods and all currency pairs.

Import quotations to the MT4

Install the terminal, login to your account (you should have an opened one by this time, can be a demo). Wait for the connection to the server, then in the Navigator window right click on the name of your account and select “Connect to the trading account”. Then a window to type in the account number and password will appear, enter a wrong password. Connection to the server will be broken, but the server data will remain in the memory of the terminal. Now again we press the F2, select the desired pair and period, but click the “Import” instead of the “Export” button. Next, select the desired file and load it into the terminal. Once you have transferred all the quotations in the Grand Capital terminal, you can start testing.

You have the following options for this in the EA settings:

PrintTestInfo - prints the test information to the log. This is the percentage of winning trades, the actual profit of the account, the value of the deposit and the drawdown on the account. Attention! Only the absolute drawdown is displayed, ie, how much the account lost with respect to the initial capital.

ReturnVariant -% profitable trades, deposit or drawdown. This option is needed to optimize the adviser on Custom option. Who needs it, will understand it anyway, but for beginners, I don‘t recommend doing optimization because of the testing complexity.

WriteTestInfo - when this option is enabled at the end of the test in tester files terminal folder you can find a CSV file with the name of the currency pair and the word Test. That‘s the file that we need. Open it in Excel, you will see one bar showing the account balance change from transaction to transaction.

The first thing we need to do is to replace all dots in the column with commas. To do this we press Ctrl + F, in the replace tab in the first field, put a dot, in the second put comma and click “Replace All.” Then click the “Insert” tab.

Right click on the opened chart, select “Select data” with the left button and click on the column (“A” in this case). The column thus should be highlighted by a different color. Then click OK in the dialog box and get something like this:

In my case, it is a deposit growth chart when trading 1 permanent option contract during all the last year on AUDCAD pair - similar test with a fixed lot on forex.

The first series of tests are done for the $10 contract. Initial deposit of $10 000. This allows you to evaluate the test results without regard to money management. That test I did since the year 2000 to assess the overall performance and stability of the system.

OptionsTrader 2000 2017 audcad fix 10$

OptionsTrader 2000 2017 audchf fix 10$

OptionsTrader 2000 2017 audjpy fix 10$

OptionsTrader 2000 2017 audnzd fix 10$

OptionsTrader 2000 2017 audusd fix 10$

OptionsTrader 2000 2017 cadchf fix 10$

OptionsTrader 2000 2017 cadjpy fix 10$

OptionsTrader 2000 2017 chfjpy fix 10$

OptionsTrader 2000 2017 euraud fix 10$

OptionsTrader 2000 2017 eurcad fix 10$

OptionsTrader 2000 2017 eurchf fix 10$

OptionsTrader 2000 2017 eurgbp fix 10$

OptionsTrader 2000 2017 eurnzd fix 10$

OptionsTrader 2000 2017 eurusd fix 10$

OptionsTrader 2000 2017 gbpaud fix 10$

OptionsTrader 2000 2017 gbpcad fix 10$

OptionsTrader 2000 2017 gbpchf fix 10$

OptionsTrader 2000 2017 gbpusd fix 10$

OptionsTrader 2000 2017 nzdusd fix 10$

OptionsTrader 2000 2017 usdchf fix 10$

OptionsTrader 2000 2017 usdjpy fix 10$

The second series of tests are done from 2016-2017 to assess the effectiveness of the EA on the latest historical data. The test are done for the $10 contract.

OptionsTrader 2016 2017 audcad fix 10$

OptionsTrader 2016 2017 audchf fix 10$

OptionsTrader 2016 2017 audjpy fix 10$

OptionsTrader 2016 2017 audnzd fix 10$

OptionsTrader 2016 2017 audusd fix 10$

OptionsTrader 2016 2017 cadchf fix 10$

OptionsTrader 2016 2017 cadjpy fix 10$

OptionsTrader 2016 2017 chfjpy fix 10$

OptionsTrader 2016 2017 euraud fix 10$

OptionsTrader 2016 2017 eurcad fix 10$

OptionsTrader 2016 2017 eurchf fix 10$

OptionsTrader 2016 2017 eurgbp fix 10$

OptionsTrader 2016 2017 eurnzd fix 10$

OptionsTrader 2016 2017 eurusd fix 10$

OptionsTrader 2016 2017 gbpaud fix 10$

OptionsTrader 2016 2017 gbpcad fix 10$

OptionsTrader 2016 2017 gbpchf fix 10$

OptionsTrader 2016 2017 gbpusd fix 10$

OptionsTrader 2016 2017 nzdusd fix 10$

OptionsTrader 2016 2017 usdchf fix 10$

OptionsTrader 2016 2017 usdjpy fix 10$

And the last series of tests carried out by testing from the year 2016 to show the robot’s profit during the year with a 1% risk of deposit, that is, if you deposit $ 100, your bet is 1 USD.

OptionsTrader 2016 2017 audcad 1% risk

OptionsTrader 2016 2017 audchf 1% risk

OptionsTrader 2016 2017 audjpy 1% risk

OptionsTrader 2016 2017 audnzd 1% risk

OptionsTrader 2016 2017 audusd 1% risk

OptionsTrader 2016 2017 cadchf 1% risk

OptionsTrader 2016 2017 cadjpy 1% risk

OptionsTrader 2016 2017 chfjpy 1% risk

OptionsTrader 2016 2017 euraud 1% risk

OptionsTrader 2016 2017 eurcad 1% risk

OptionsTrader 2016 2017 eurchf 1% risk

OptionsTrader 2016 2017 eurgbp 1% risk

OptionsTrader 2016 2017 eurnzd 1% risk

OptionsTrader 2016 2017 eurusd 1% risk

OptionsTrader 2016 2017 gbpaud 1% risk

OptionsTrader 2016 2017 gbpcad 1% risk

OptionsTrader 2016 2017 gbpchf 1% risk

OptionsTrader 2016 2017 gbpusd 1% risk

OptionsTrader 2016 2017 nzdusd 1% risk

OptionsTrader 2016 2017 usdchf 1% risk

OptionsTrader 2016 2017 usdjpy 1% risk

Conclusion: My first OptionsTrader advisor to work on binary options shows very stable profit growth without a significant drawdown for almost all traded instruments. Advisor on a long-term profit growth shows a small drawdown. However, we must be prepared for the fact that sometimes advisor can not make a profit, or even be in the red. Due to a large number of instruments available for trading advisor it is recommended to be put on one account for all available trade sets. This will reduce the overall risk and flatten the yield curve.

Account monitoring

Pay attention that binary options robot monitoring are specific, it is necessary to look not at the growth (gain) curve (as usual for forex robots monitoring), but at the balance or profit curve. This is because 85% payout in monitoring is seen as a $0.85 deposit and unprofitable trade as $1 withdrawal.

Settings description

PrintTestInfo – when enabling, gives some information about test results, namely, percent of profitable transactions, final deposit, maximal drawdown and profit factor.

ReturnVariant – parameter, by which the advisor optimization is carried out when choosing custom optimization parameter in the tester.

WriteTestInfo – file record with test information (balance value).

FinishDate – time of test finish (expected). It is needed to speedup test while using WriteTestInfo.

Lot – fixed amount of money to buy options

Risk – percent of deposit to buy options. If equal to zero, a lot is used. If not equal to zero, risk in deposit percentage is used.

Magic – magical number (identifier) of the advisor.

Expiration – option expiry time

WorkPeriod — period of market information update in the advisor. Leave it as it is.

SetPeriod — chart period, the advisor will be installed on.

IndicatorPeriod — advisor indicators calculation period.

WPRPeriod —WPR oscillator calculation period

WPREnterLevel –WPR level to enter

CCIPeriod —CCI oscillator calculation period

CCIEnterLevel –CCI entry level

MinVol, MaxVol, ATRPer – minimal and maximal volatility and the period of ATR indicator calculation

KCPeriod, KAtrPeriod, KCDev – channel calculation periods

CalculateDST —take into account change to winter/summer time

ManualGMTOffset — GMT offset

StartTradeHour1, StopTradeHour1 — hour of beginning and finish of the first trading period

StartTradeHour2, StopTradeHour2 — hour of beginning and finish of the second trading period

StartTradeHour3, StopTradeHour3 — hour of beginning and finish of the third trading period

MondayTrade, TuesdayTrade и т.д. — disallow trading on a particular day of the week (if false, don‘t trade on this day).

It is recommended to use presets given at the end of the article.

Attention! Do not change anything in the EA settings and use only the recommended values, if you don‘t exactly understand what you are doing!

Recommended money management

Recommended is the risk on the transaction in the amount of no more than 1-2 per cent of the deposit for each pair. In the case of all the sets at the same time, it is recommended to reduce the risk of 0.5-1%.

Results

Options Trader Advisor - the first ever in the history of ForexTraderPortal.com Advisor for binary options. The stability and profitability of trade are supported by the long-term tests. In the long-term period, profitability might be sometime in the neutral zone.

Important!

For correct advisor functioning, the trading platform should be enabled from the opening of the market on Sunday night till it closes on Friday evening. If you are unable to keep the computer in working order 24/5, it is recommended to use the VPS service.