Rainbow Strategy Video From IQoption. End Of Day Strategy. An end of day strategy for binary options can find you profitable trading opportunities while only requiring a very limited time investment. End Of Day Strategy Explained. The end of day strategy is less of a strategy that tells you which signals to use and more of a strategy that tells you when to look for signals. The strategy assumes that the best time of the day to trade is at the end of the day. The end of the trading day shows some unique characteristics. This is mostly due to the fact that day traders stop their trading when a stock exchange is about to close. Day traders are traders that never hold overnight positions. They invest for the short run and argue that a lot can happen overnight, which is why it would be unwise to hold a position during this time. Since there are a lot of day traders out there, their absence significantly reduces the trading volume. The market is a bit slower and does things it is unlikely to do at any other time of the day. Traders with an end of day strategy wait for this environment, arguing that signals are clearer and trading opportunities better. Trading End Of Day Options. While you can theoretically trade any trading strategy at the end of a trading day, there are a few strategies that work especially well during this time. Let s take a look at the most profitable of them trading closing gaps. Closing gaps are especially likely during times with low volume, which is why the end of the trading day is the best time of the day to trade them. The accurate predictions of closing gaps make them especially attractive to traders of binary options types with a higher payout such as one touch options. A gap is a jump in price action. For example, if an asset traded at 100 and jumped to 100. 1 without covering the range in between without trading for 100. 02, and so on , it creates a gap of 0. Depending on how this gap was created, it can mean different things. A gap that was accompanied by a high volume likely is the result of significant news reaching the market, which probably starts a strong new movement. Near the end of the trading day, however, such gaps almost never happen. What we find instead are gaps that are likely to close. Near the end of the trading day, there are so few traders left in the market that a few traders, possibly even a single trader, are enough to make the market jump. The resulting gaps are weak because they are the result of a single person s decision. Most other traders will consider the advance unjustified and invest in the opposite direction. If the gap points upwards, most traders will consider the new price too high. They will sell their assets. If the gap points downwards, most traders will consider the new price too low. They will buy new assets. Because of both reasons, gaps that happen near the end of the day are likely to close. This knowledge allows you to trade a one touch option. When your broker offers you a one touch option with a target price inside the reach of the gap, you know that the market will likely reach this target price. If the expiry is reasonable, too, invest. Alternatively, you can also trade a high low option that predicts a closing gap. Expiry Strategy. Base Line Expiry I learned a long time ago how to judge the duration of a given signal. Well before I began trading binary options. Here I will explain how to develop an expiry strategy. The first thing to do is to identify what your signal is. trend line bounce stochastic crossover shift in momentum candlestick pattern or a combination. Once done, you go back over your charts for a given period and identify all the signals. The time frame is not important at this point, this technique works in all. Mark the strong signals and weak signals. Now count how many bars or candles it takes for each signal to move into the money. Once that is done you can take an average of the number of bars needed. Both for the strong and for the weak signals to move into the money. These averages are now your base line expiry for the signal. If you are using a chart of hourly prices and your signal takes an average of 3. 7 candles to move into the money, you will want to use an expiry that coincides with that time. This could be a mid day, end of day, 4 hour or other option. Whatever expiry matches your signal horizon. If the signals takes 3. 7 candles and you are using a daily chart that means 3. If using the hourly chart, it means 3. 7 hours, and so on. Study the chart below. I am going to use a basic moving average strategy to demonstrate. I will use the 30 bar exponential moving average. It hugs prices closer than a simple moving average and will give us more signals to count. Also, in order to weed out bad signals and to improve results, I am only choosing the bullish trend following signals. So, there are 15 total signals. 6 weaker signals and 9 stronger signals. On average, it takes 4. 2 bars for these signals to move into the money and reach a peak. That means, since this is an hourly chart, that each signal will move into profitability and reach the peak of that movement in about 4 hours. So for expiry I would want to choose the closest expiry to 4 hours that is available. If a good choice is not available then no trade can be comfortably made. Do not try and force trades where they do not fit. Breaking it down a little, the weak signals peak out in about 2. 6 hours versus the stronger signals. Stronger signals take about 5. Putting this knowledge in perspective, a weaker signal might be one that is close to resistance. A stronger signal might be one that is not close to resistance. Also, a stronger signal might be one where price action makes a long white candle and definitive move above or from the moving average whereas a weaker one might only create small candles and spinning tops. Additional Tips For Choosing Binary Options Expiry. Choosing an expiry is one of the most important factors in making a trade. The other key factor being direction. All too often I get asked questions about why a trade went bad in the final moments. One of the most common areas of error I find is in choosing expiry. Of course there can also be errors in analysis, trends or random events. But the focus of this discussion is expiry. It is obvious that you don t want to use 60 second expiry when trading on weekly charts. Just as clearly, you won t want to use end of day expiry when trading off the 60 second charts. So how do you determine what the best expiry will be. One question you must ask yourself is if you are trading with or against the trend. When trading against the trend I would suggest a shorter expiry than a longer one. Simply because there is less chance of an extended move counter to the trend. Your expiry must be more precise. When you trade with the trend your expiry can be a little farther out. A trend following trade has a higher likelihood of closing in the money so does not need to be as precise. A signal that follows the trend is a lot more likely to be in the money rather than one that goes against the trend. Another factor that can have a big impact on which expiry is best for a given trade is support and resistance. The relative level of prices to a support or resistance line is a factor in how likely a trade is to move in a given direction. If prices are near a S R line and moving away there is much more chance of your option closing in the money than if prices are near a S R line and moving toward it. When prices are moving toward one of these lines, the chances of the movement being halted and or reversed is much higher than when prices are moving away from one. So, how does this apply to expiry. If you are taking a signal that has a higher chance of being halted or reversed then you would want to choose a shorter expiry than if the same signal were not faced with a S R level. I purposefully did not say call or put, or bullish or bearish, because this applies to both bullish and bearish trading. Also, keep in mind that support and resistance can be in the form of lines drawn at areas of interesting price action or peaks, moving averages, Fibonacci s, envelopes and bands.
Strategy 1 Trading MFI extremes with high low optionsWith one exception, all 5-minute strategies are based on technical analysis. Over the next 5 minutes, fundamental influences are unimportant for example, no stock will rise because the company behind it is doing well. The only thing that matters is the relationship of supply and demand on the stock exchange whether traders are currently buying or selling. Technical analysis is the only way of understanding this relationship. One of the technical indicators that can best describe the relationship between supply and demand is the Money Flow Index MFI. The MFI compares the numbers of assets sold to the number of assets bought and generates a value between 0 and 100. When the MFI reads 0, everybody who wanted to trade the asset wanted to sell it. When the MFI reads 100, everybody who wanted to trade the asset wanted to buy it. When the MFI reads 50, the number of traders who wanted to sell the asset was exactly equal to the number of traders who wanted to buy it. The relationship between buying and selling traders allows you to understand what will happen to the price of the asset next. Since the price is determined by supply and demand, a strong movement where too many have already bought or sold exhausts one side of this relationship. The market has to turn around. When too many traders have already bought an asset, there are too few traders left to push the market upwards. Demand will exhaust, and the market will fall. When too many traders have already sold an asset, there are too few traders left to push the market downwards. Supply will exhaust, and the market will rise. The MFI helps you to identify these situations. When the MFI reaches a value over 80, the market is overbought. It will likely start to fall soon. When the MFI reaches a value below 20, the market is oversold. It will likely start to rise soon. Binary options offer you the ideal tool for trading this prediction. Invest in a low option when the MFI reaches a value over 80. Invest in a high option when the MFI reaches a value below 20. This strategy work especially great as a 5-minute strategy. During long-term trends one year or longer , the MFI often stay in the over- or underbought areas for long periods. Fundamental influences are strong on these time frames and can keep pushing the market in the same direction for years. On shorter time frames, fundamental influences are unimportant. It is more important to identify the number of traders that are left to buy or sell an asset and draw the right conclusions from this indication. The MFI is the perfect tool for this diagnosis, and binary options are the ideal way of trading it. 5 Min Strategy 2 Trading the news. If you feel uncomfortable with a strategy that uses only a mathematical basis for its prediction, there is one alternative to technical analysis as the basis of a 5-minute strategy trading the news. When important news hits the market, there usually is a quick, strong reaction. You can trade this reaction with a high low option, one touch option, or ladder option, depending on your preference and tolerance of risk. This strategy works well as a 5-minute strategy because longer expiries face the threat of other events influencing the market and causing a price change. For the next 5 minutes after the release of important news, however, you can be sure that the news will dominate the market. Rainbow Strategy. The rainbow strategy for binary options combines sophisticated predictions with simple signals. It is ideal for traders who want to increase their profits by using a proven, successful strategy. What Is A Rainbow Strategy. A rainbow strategy is a three moving averages crossover strategy. Most traders use a different colour for every moving average, hence the name ͚rainbow͛ strategy. The idea behind the rainbow strategy is simple. Moving averages that use many periods for their calculation take longer to react to price changes than moving averages that use fewer periods. During a strong movement, multiple moving averages should, therefore, be stocked from slowest to fastest in the direction of the current market price. The fastest moving average should be the closest to the current market price. The second fastest moving average should be the second closest to the current market price, and so on. When you see multiple moving averages stacked in the right way you know that the market has a strong sense of direction and that now is a good time to invest. This is the basic logic of the rainbow strategy. Theoretically, you could use as many moving averages as you like for this strategy, but the rainbow strategy use three. Three is a good sweet spot because it keeps things accurate yet simple enough to handle. Adding more indicators would create no significant increase in accuracy, but using only two moving averages would be much less accurate without simplifying things. These three moving averages determine when you invest. When the shortest moving average is above the medium moving average which is above the longest moving average, you invest in rising prices. When the shortest moving average is below the medium moving average which is below the longest moving average, you invest in falling prices. You could use any number of periods for each moving average. There are two rules of thumb you should at least consider, though. Double the number of periods for each moving average. If your fastest moving average uses 5 periods, use 10 and 20 for the slower ones, for example. This ratio guarantees that the moving averages are different enough to create meaningful signals yet similar enough to create some signals at all. Use popular values. A trading week has five days, which is why using multiples of five is a good idea for this strategy. These values help you see the same trading opportunities as other traders, which increases the supply and demand that others will create to your advantage. How to trade a rainbow strategy with digital options. To trade the rainbow strategy with binary options, you have to wait for your moving averages to be stacked in the right order. When that happens, you have three options for when to invest. Invest right away. Some traders invest immediately when the final moving average positions itself in the right order. This way of trading the rainbow strategy creates the most signals, which is why it offers the most potential but also the highest risk. Wait a period. Some traders wait if the moving averages remain in the order until the next period is over. If it does, you have lost little time but gained a lot of security because you know that the signal was more than the result of a sideways movement. Wait for two or more periods. Some traders wait until two or more periods have confirmed the signal. Waiting for too long, however, reduces the accuracy of your signal because the market might have already started to turn. We recommend to wait no longer than three periods or ignore the signal. You can trade this strategy with high low options, one touch options, or ladder options. High low options are the safest way; ladder options have the highest potential. Decide which binary options types is right for you based on your personality, especially your risk tolerance.
Momentum Strategy. The momentum is an important indicator of the speed with which the price of an asset moves. For binary options traders, it can be both a great way to find trading opportunities and a helpful tool to pick the right binary options type for the current market environment. What Is A Momentum Strategy. The momentum is a technical indicator that compares where the price of an asset now to a price in the past. There are different ways of calculating the momentum. This way compares the current price to a price in the past and ignores everything in between. The most popular absolute interpretation is the momentum indicator, which compares the closing price of the last period to the closing price 14 periods ago you can also choose any other number, but 14 is the default setting. Process oriented. This way of analysing the momentum considers every period and calculates the distance which the average period has moved. Many technical indicators calculate this value in slightly different ways, but the most popular of them is the Average True Range. Some indicators compare the current momentum of the market to a historical average. These indicators help you understand whether the current market environment is better suited for binary options types that create higher payouts but require strong movements for example one touch options or ladder options or for their low-risk alternatives that can win trades with smaller movements but create lower payouts. Most of the time, these indicators display their result as a percentage value of the average momentum, with 100 being the baseline. Both indications are similar, but also very different. Let s see how you can use them to trade binary options. How Can I Trade A Momentum Strategy. Binary options offer a number of great strategies to trade the momentum. The simplest of them uses the momentum indicator and boundary options. Boundary options are such a great way of trading the momentum because they are the only options type that enables you to win a trade on momentum alone. Boundary options define two target prices, one above the current market price and one below it. Both target prices are equally far away, and you win your option as soon as the market touches one of the target prices. This means it is unimportant where the market moves, as long as it moves. The momentum can help you make this prediction. Assume that an asset is trading for 100. Your broker offers you a boundary option with target prices at 99 and 101, and when you adjust your momentum to meet your expiry, it reads 2. Now you know that the market has moved twice as far in the recent past as it would have to move to win your boundary options. This seems like a good investment opportunity. If the momentum were only 0. 5, you know that this would be a bad time to invest. 5-Minute Strategy. A good 5-minute strategy is one of the best ways of trading binary options. To get it right, there are a few things you need to know. What Is A 5-Minute Strategy. A 5-minute strategy is a strategy for trading binary options with an expiry of 5-minutes. While there are thousands of possible 5-minute strategies, there are a few criteria that can help you identify those that are ideal for you. In the eyes of many traders, 5-minute expiries are the sweet spot of expiries. The market does not move as random as on shorter time frames, which reduces your risk. You can still make a lot of trades in a day, which increases your earning potential. 5-minute expiries are as short as possible but as long as necessary. A 5-minute strategy allows you to take advantage of this perfect connection. Let s take a look at two possible 5-minute strategies.
You might win the first one, but you will soon lose a flip, and all your money will be gone. To prevent bankruptcy, you have to limit your investments. This is the first purpose of a money management strategy. The second purpose is to help you adjust your investment according to your capabilities. Let s get back to the coin flip with a strategy that wins you 60 percent of your trades and look at a number of possible money management strategies that would fail. Always invest the same amount. If you start with 100 and invest 1 on every single trade, you would make a nice profit in the beginning. You would also have enough room to survive a streak of bad luck. As your account balance increases, however, your investment would soon get too small. Once you reach the 1,000 mark, for example, winning a 1 trade will hardly make a difference. The problem with this type of money management is that it fails to grow with you. Invest the way you feel. Some traders vary their investments based on their intuition. When they feel or have won their last trades, they invest more. This strategy is dangerous because losses weigh heavier than wins. When these traders lose a few trades in a row and have invested a little more on these trades, they have lost a large percentage of their overall account balance. They have to significantly reduce their investment, which makes it difficult for them to make it back. Step by step, they lose more and more money. The holes they dig for themselves will always be bigger than your ability to get out of them. Invest more after a loss. Some traders increase their investment after a loss, for example by doubling their investment. They hope to eventually win a trade, make a profit, and start the cycle anew. Such strategies work great until they fail. Even if you choose a very small starting investment, binary options enable you to make so many trades that you will be broke within a year. Lessons In Managing A Bankroll. What can we learn from these examples of failing strategies. There are three lessons. You need to adjust your investment to your overall account balance. You have to have a precise definition of how much you invest and increase your investment in proportion to your overall account balance. You must reduce your investment after a losing trade and increase it after a winning trade. To fulfill all three of these criteria, a good money management strategy always invests a small percentage of your overall account balance, ideally 2 to 5 percent. For example, if you decide to invest 2 percent per trade, you would invest 2 with an account balance of 100. If your account balance increases to 200, you would invest 4 per trade and so on. Whether you should invest 2 percent or 5 percent on every trade depends on your risk tolerance and your strategy. Investing more can make you more money, but losing streaks will be more expensive. We recommend using a demo account to find the right setting for you. Analysis And Improvement Strategy. An analysis and improvement strategy is the most overlooked sub-strategy you need. It helps you to find the weak points in your trading and improve over time. Without an analysis and improvement strategy, long-term success is at least difficult, if not impossible. When you get started in binary options, you still have a lot to learn. That means you have to try different strategies, vary the parameter of each strategy and make improvements. This might sound simple, but it is very difficult to figure out what works for you and what does not. There are so many variables that it is almost impossible to connect all the dots. Without an analysis and improvement strategy, newcomers lose themselves in the endless complexity of trading. An analysis and improvement strategy makes this complexity manageable. Defining Analysis. There is no precise definition of what your analysis and improvement strategy should look like, but by far the most common approach is using a trading diary. In a trading diary, you note every aspect of your decisions. After you invested, you write down which indicators you used, which time frame, which asset, and which expiry. You also write down your location, your mood, the time of the day, and your trading device. Once the trade is finished, you note the result. After a while, you can analyse your diary. You might find that you won significantly more trades in the morning in the afternoon, that you are a better trader with your phone than with your PC, or that you can interpret moving averages more effectively than candlestick formations. Spot Trends To Identify Strengths And Weaknesses. Regardless of what you find, the result helps you to focus on the elements of your trading strategy and your money management that work for you and eliminate everything else. You will get better and better, and eventually, you will be good enough to turn a profit. Keep writing your diary anyway, and you will be able to recognise mistakes creeping in before they cost you a lot of money. In theory, anything can be your trading diary. Some traders take screenshots, others keep an Excel file, and some write old-fashioned books. Pick the diary that works for you, and you will be fine. Sub-Strategy Conclusion. A binary options strategy is your guide to trading success. While it can seem difficult to find the right strategy at first, with the right information, things are rather simple. You need a trading strategy, a money management strategy, and an analysis and improvement strategy, and you will be fine. Specific Strategy Examples. 60 Second Expiries. This basic strategy aimed at 60-second Listed as 1 minute options at some brokers goes as follows. Find support and resistance levels in the market where short-term bounces can be had. Pivot points and Fibonacci retracement levels can be particularly useful, just as they are on other timeframes while trading longer-term instruments. Take trade set-ups on the first touch of the level. When you are trading assets that have a high level of noise. I believe that taking a higher volume of trades can actually play to your advantage. 60 second 1 minute trades certainly fall into this category. For those who are not familiar with this form of analysis on longer term expiries The advice is to look for an initial rejection of a price level already marked ahead of trading. So marking support and resistance is a vital. If it does reject the level, this helps to further validate the robustness of the price level. Trade on any subsequent touch. This will lead to a lower volume of trades taken in exchange for higher accuracy trades. The first touch is not traded, but used to validate following trades. So less trades, but more accurate. 60 Second Trades Lead To Higher Trade Volume. Since the inherent noise in each 60-second trade is so large to begin with, I believe trading more often can actually work to the trader s gain. In that it helps to even out the accuracy fluctuations that come when trading such short-term expiry times. Overall accuracy of in the money trades will drop. This means lower expected value from each trade. Higher volume however, can compensate. For example, 100 trades with an expected profit of 1. 25 would return 125 Profit of 25. But 200 trades with a lower value, say 1. 18, would net 236 Profit of 36. So a lower strike rate does not always mean lower profit if more trades can be found over the same period. Let us take a different view. If you re trading 60-second options, and only taking 1-2 trades in a 4 -hour session i. , being super conservative. It is very likely that you are going to be waiting a long time before your true trading skill level becomes clear. I could be that you are not profitable using 60 second options. It is better to find that out sooner, rather than later. Don t blindly trade all touches of support and resistance. Continue to consider price action e. , candlestick types and formations , trend direction, and momentum. Also be open to gut feel. Your trading experience will continue to grow, and your feel for the markets will improve. On occasion, those instincts can over-ride any other signal. But bear in mind many trading lessons are learnt the hard way with losing trades.
A Guide To Strategy. When trading binary options, a winning strategy requires a method that wins more trades that it loses, and crucially, at a payout that more than covers the losses. Digital trades generally payout at less than 100 on the investment amount so simply winning more trades than are lost may not necessarily be enough to turn a long term profit. The art of trading binaries profitably shares some similarities with the sports betting world. The important trait that links both enterprises is that of expectancy. Long term profit trading binaries can only be derived where the expectancy the theoretical profit within any trade results in a positive expectation from that trade. Binary options trading strategies are therefore used to identify repeatable trends and circumstances, where a trade can be made with a positive profitable expectancy. It may be as simple as;. If asset X falls in value for three sessions in a row, open a call option for the duration of the next session. The above is an extremely simple example of a trading strategy. Strategies do not need to be hugely complex though they can be , sometimes the simplest strategies work best. Types Of Trading Strategy. There are a range of techniques that can be used to identify a binary options strategy. New investors may like to explore all of them each has the ability to be profitable when used correctly. In addition to the type of basic, or traditional, trading strategy highlighted above, there are also alternative methods;. Charting and technical analysis charting the analysis of graphs and other technical indicators is often considered first when discussing strategy. Much has been written about the trends and patterns that are regularly seen within the pricing charts, and many of these can translate directly into trading strategies. Retaining a simple strategy whilst trying to drill into technical analysis is not always easy, but does provide a route to some insight that may not be immediately obvious elsewhere. Fundamentals Analysis of the fundamentals is almost a prerequisite for most types of investment or trading. With binary options trading however, the time scales are often too short for the fundamentals to shift the price in the expected direction. There are still some binary options trades that can be gleaned from study of the fundamentals though, and it is another potential route for a successful strategy. Particularly longer term options. Some brokers now offer expiry times of one and two months ahead making this form of strategy much more realistic. The Benefits Of Good Trading Strategy. A good binary trading strategy will simplify much of the decision making about where and when to trade. With timing the key to everything where trading is concerned, the less guess work there is around entry and exit points, the better. Particularly for less experienced traders. A repeatable strategy will always highlight the trading opportunities, where otherwise, the majority of those openings would be missed. Strategies encourage discipline, aid money management and provide the clearest predictor for positive expectation. While it is possible for traders to profit from binary options without a strategy, it will be exponentially harder. Novice traders will also benefit simply from trying to build their own binary options trading strategy. Once some time has been spent analysing different methods and building a strategy from scratch. It is much easier to appraise strategies offered by others. Without that initial grounding in the art of trading strategies, it would be very easy to become intoxicated by the promise of untold riches using someone else s trading strategy or expensive software. Demo accounts can be a good place to start experimenting with binary options trading strategies without risking any capital. Read our full list of demo account brokers here. Leading Brokers. Elements Of A Profitable Strategy. There are three binary strategy elements every trader must know. In this article, we present each type strategy and examples for beginners and advanced traders. In detail, you will learn. Which types of binary options strategies are there. Why do I need a trading strategy. Why do I need a money management strategy. Why do I need an analysis and improvement strategy. With this information, you will immediately be able to pick the right strategies for you and become a successful binary options trader. Sub-Strategy Choices. To create a successful binary options strategy, you have to combine three sub-strategies. A trading strategy A money management strategy An analysis and improvement strategy. Each of these strategy does a very specific thing for you. To be successful, you need all three. If you lack one, the other two become useless. Let s take a look at each type of sub-strategy and see how you can find the right one. Why Use A Strategy. The trading strategy is the most famous type of sub-strategy for binary options. It is so famous that many traders make the mistake of thinking that it is the only strategy they need. But more on that later. For now, let s focus on how you can find a good trading strategy. A trading strategy helps you to find profitable investment opportunities. It defines which assets you analyze, how you analyze them, and how your create signals. For example, a trading strategy could define that you trade only big currency pairs between 8 and 12 in the morning, that you use a 15 minute price chart, and that you invest when a 10 period moving average and the Money Flow Index MFI both indicate the same direction for example, the moving average has to point up, and the MFI has to be in an oversold area, or vice versa. The great advantage of such a definite strategy is that it makes your trading repeatable you always make the same decisions in the same situations. Value Investing. This way of trading is crucially important to your success because binary options are a numbers game. Financial investments, in general, include the risk of losing trades, but the short time frames of binary options are especially erratic. You can never be completely sure what will happen next. Even the best traders will win only 70 to 80 percent of their trades, those with high-payout strategies might even turn a profit with a winning percentage of 30 percent. Successful trading does not mean to be always right. It means to be right often enough to turn a profit. Think of a coin flip. When you win 50 percent of your trades and get twice your investment on winning trades, you know that you would break even after 100 flips. If there were some way for you to increase your winning percentage to 60 percent, however, you knew that you would make money. The same applies if there were a way to increase your payout. Your trading strategy does exactly this for your binary options trading. Strike Rate. When you trade high low options, for example, you can expect an average payout of 70 to 75 percent. This means you need to win 60 percent of your trades to make money. A trading strategy helps you to identify situations in which you know that if you always invest according to your strategy, you will win at least 60 percent of your trades and make a profit. Without a concrete trading strategy, you would never know if you would win enough trades to make a profit. On some days, you might get lucky and make a lot of money, but on others, you would lose half of your account balance. Sooner or later, you would have a bad day and lose all of your money. With a trading strategy, you can avoid such a disaster. A trading strategy is a crucial cornerstone of long-term trading success. Why Use Money Management. A money management strategy is the second cornerstone of your trading success. To understand its purpose, let s get back to the example of the coin flip. Even if you have a strategy that gets the odds in your favour, for example by guaranteeing that you will win 60 percent of the flips, this strategy will lead to disaster if you always bet all your money on every flip.