Category Archives: Michael Hodges

geek feature

Another Year Trading With The Geek

Another year with the Geek, me Michael Hodges, has come and gone. It was a good year, 2014, and this year will be even better. I must say that I have grown over the past year as a trader and as a writer and hope that continues into the future. The beauty of social trading is that I know there is opportunity to do just that, grow, and that is what I plan to do this year. This article is a look back at the past year, what I’ve done, how my trading has evolved and just how I am doing. If you don’t know already I write a column with free signals for the Geek Account each week, posted on BinaryOptionsThatSuck.com, and share all trades in my account on Communitraders.


Social Trading Is More Than A Website


Social trading, more specifically binary options social trading, is more than just one website. Over the past year I have embraced that and have been exploring the bounds of what is available. On top of my work with BOTS (BinaryOptionsThatSuck.com) and BONET (BinaryOptions.net) I have been researching every new platform, service and forum I can find. My two favorites for binary are still at the aforementioned websites but there are others worth mentioning. BabyPips.com and DailyForex.com are my favorite fx forums and places to find me talking about strategy and analysis with those traders.

I tend to focus more of my time on the forum at BOTS where I produce my tips, make trades and talk analysis with a growing number of other traders. The thing I have come to understand is that this thing we call social trading is not limited to one website, but encompasses the community of websites that provide these services as well as the traders themselves. I have noticed, more than once, conversations in one forum spilling over into another because the community of traders encompasses both, and more. Communitraders is a good, great even, addition to the community because of the free demo platform they provide and cheers to them for doing it!

copy 1 of ct logo
All in all the social trading experience is enlightening and has helped me improve my trading. Talking with the other traders has helped me to better understand my own positions as well as see new angles. All while helping me to improve my trading. Maintaining the Geek Account has been one of the best learning experiences I have ever had in trading, and I had already been trading for close to 10 years when I started binary. It helped my trading but it also helped my money management and overcoming the spectres of fear and greed. I no longer worry about any one trade and now simply enjoy the lifestyle knowing my win rate is good and that I am making money.


The Geeks Stochastic Strategy

The stochastic indicator is one of my top indicators, if not the top indicator. I use it as the backbone of my trading strategy on every asset in every time frame. I like it because it is based on randomness and chaos, and because it works. The name stochastic is derived from the Greek stokos and is a reference to the chaos and randomness of life. The indicator assumes that you cannot predict the day to day movement of an asset because it is too random and based on factors with varying degrees of importance. What the indicator does is track the close of any given day relative to a set period and from derives and underlying direction.
copy 1 of gld_stoch_signal
I like the assumption made by stochastic as it matches my own observations; you can never know what is going to happen tomorrow and how the market is going to react to it. What you can do is track the path of those day to day movements and derive the underlying path of the market and that is what stochastic does. It is often related to a man walking a dog. The dog will move side to side across the path of the man, and may pull the man from side to side as well, but the man will prevent the dog from moving too far in one direction or the other and over time will dictate the underlying direction in which the dog travels. I have begun to learn just how supple and responsive the indicator is, and not to discount the things it is telling me. It is a powerful tool for trend following techniques, and uncanny and identifying reversals before they happen.

Sounds complex and it is, I only understand the surface of the theories, but it is easy to use. Stochastic is an oscillator and as such provides dozens of types of signals, all of which can be incorporated into one macro stochastic strategy. Last year I began to summarize the ways in which I use this indicator with the Geeks Simple Stochastic Trend Following Strategy and have moved on to other articles and forum posts that go into further detail. I intend to continue with this in 2015, other articles will include how I use stochastic to measure divergence, to find resistance, to find support and other signal producing analysis. My suggestion, and the method in which I have begun to quantify my overall unifying Stochastic Method For Binary Options, is to start with the basic trend following strategy, master it and move on from there. You can keep get more info, talk to me and other traders about this strategy here The Geeks Simple Stochastic Strategy

Tips for successful trading

Some Tips For Successful Trading

Get In Tune With The Markets

This is a list of some tips I have developed over the years to make sure that my trading is successful. I know that I can never expect to win every trade but I can strive to win as many as possible, to limit my losses and basically to make sure that I am as ready as possible to make good trading decisions.  I have categorized my list into 4 sections; longer term prep, short term prep, what you might not consider and things I never do.

Longer Term Preparation For Trading 

  1. Education is the root of success for any endeavor. The more you know, the more you learn, the more you mature as a trader the better you will be. Education is not limited to tools or strategy but also includes fundamental analysis, market mechanics, economics, trading psychology and any other subject that helps you to grow. Education never should never stop, you should always seek out new information. Each new angle you learn will give you a new insight to the market.
  2. Strategy is how you make trades. Your strategy is the framework that guides your actions.   I always stick to my strategy to ensure that I am not making random or knee jerk trades. It’s OK to use more than one strategy, or a combination of strategies so long as you can keep them organized. Using a different account for each strategy is one way to do it.
  3. Money management is how much I trade. Money management is the key to long term success no matter how good a trader you are. By keeping your trades small you never risk your whole account on one trade, or one streak of bad trades. By keeping your trades set to a percent of your account you can make sure you never trade too much while also allowing your trade size to grow with your account. The average successful trader will risk between 1% and 5% of their account. 1% is a very low risk tolerance,5% more risky. I use the 2% rule as a standard for the Geek Account, my weekly tips column on BinaryOptionsThatSuck.com.
  4. Fundamental analysis is the study of the economy, business and market conditions. It is crucial to understand the underlying fundamentals of the market in order to better understand trend and how the market might react to a change in those fundamentals. I follow economic data on a week to week basis, it’s not important to become an economist, just to keep up with it the same way you do the local sports scores. Think of it as keeping score on the economy, when things are good the bulls are winning, when they are bad the bears are winning.

Short Term Prep 

  1. Checking the news is the first thing I always do. I use a variety of sources including email alerts, a news app on my phone, the TV and the internet. I always wake up, at least on trading days, by 8AM eastern time so that I have time to catch up on it all while drinking my coffee with leisure. I check up first on Asia, because the trading day starts in the East. I move on the Europe because those markets are open in the early part of my day, ahead of the US open. After that I move on to domestic news and then drill down to any specific reports or stories I want to know more about.
  2. Checking the charts is the last thing before making a trade. I browse through, always before the opening, looking for the asset I think is best for day trading and longer term signals for the Geek Account. I am a trend follower and make all my trades based on trend following signals, which include corrections and reversals, depending on the time frame, asset, analysis etc. I never force a trade on a chart, either it’s there or it isn’t. If it isn’t then I move on to the next and the next until I find the one I like all the while waiting for the signs to develop.

What You Might Not Consider 

  1. Rest is very important to trading well. Staying on top of the market is mentally challenging and requires plenty of sleep and good nutrition.  You need to be sharp and staying up late is not how you stay sharp.
  2. If you treat trading like a hobby, or a game, it will treat you the same way. Hobbies may make you money but you don’t get rich on them whereas a game, if you lose who cares, it’s just a game. If you want to have real long term success you have to treat trading like a business, make good trading decisions for your business, manage your business’ money well and it will take care of you well.

Some Things I Never Do 

  1. I never let my account balance influence my trading. It is easy to be tempted to trade too much, or too often, or too risky, or all of the above, for both greed and fear. If you are winning a lot you may want to win more, and more. If you are losing a lot you may want to try to win it back quickly. You need to know your balance so you can apply money management but you must always follow your risk management rules.
  2. I never let my open trades affect my trading decisions. Sometimes I may have 5 or even 10 trades in the red. This can be quite discouraging and I admit, is something hard to ignore. I don’t ignore it, I just don’t let it bother me. I know that over time I win more than 60% of the time, I also know that my money management is protecting my account like it always does. I usually don’t even know that I have a losing month until after it happens and I tally up all the trades that closed in that month.
  3. I never trade more money than my risk percent. I never trade less money than my risk percent.  I always trade my 2%. If for some reason that I can’t trade exactly that amount (broker trade size/increments for example) I will round up, not down.