Jurassic Robots

At least they didn't eat me

One of the most memorable moments of dialogue in the original Jurassic Park movie is the conversation between the park’s creator John Hammond and the mathematician/rock start Dr. Ian Malcom.  In one scene, John tries to justify the park’s failures and malfunctions by comparing his park to Disneyland.  “All major theme parks have delays,” Hammond explains.  “When they opened Disneyland in 1956, nothing worked!”  Dr. Malcolm quickly retorts back with, “Yeah, but John…If the Pirates of the Caribbean breaks down, they pirates don’t eat the tourist.”

Today reminded me of this now classic moment in cinema history.  Like the opening day at an amusement park, I was filled with anticipation to see the first Robot experiment in progress.  Waiting for the first trade to execute what like listening to the click click clack of a roller coaster as it climbs to new heights building kinetic energy along the way.

The height of anticipation quickly came crashing down when I realized that a programming malfunction stood in the way of giving this Robot a proper test run.  No, nobody gotten eaten by a tyrannosaurus or chased by velociraptors.  However, I did experience mechanical failure and had to abort the mission after three trades.  I am now investigating problems with the programming and will resume trading once the details have been sorted out.

What’s the problem?

The problem that occurred had to do with binary options expirations.  According to the email mentioned in my previous blog, the BINARY OPTION ROBOT(tm) recommends trading the MACD and RSI with 5 to 15 minute expirations.  As a U.S. trader limited to Tradorax, I am already limited to 5 minute trades.  One of the recommended options, then, is already off the table and beyond the realm of my experimentation.

However, today’s malfunction made matters worse.  I was limited to only trading 60 second binary options.  When I logged in through the Tradorax website outside of the Robot, options were available for 3 minute and 5 minute binaries.  However, the buttons to display these options were either covered up by a visual glitch or absent altogether.

As a result, I terminated the experiment after only three trades.  It did not appear that that 60 second time frame allowed enough time for the event detected by the indicator to swing into action far enough to trigger a gain.  The results of the trade were two losses and a wash.  The first trade was a loss.  The second was a wash, meaning that the entry price on the options contract matched the closing price at expiration.  Our initial investment was returned, so there was neither a gain nor loss on that transaction.  The third trade executed was also a loss.

Watch this experiment in action:

 

I stopped the experiment after the second loss in order to minimize my losses and regroup.  I then sent an email to both the customer service department of Tradorax and the technical support team of BINARY OPTION ROBOT(tm).  I am now awaiting a response.  I intend on resuming experiments once this minor glitch is resolved.

Was it a total loss?

No.  I learned a valuable lesson about 60 second trading.  While there may be merit in this fast paced expiration, it is not recommended for beginners who cannot afford consecutive losses.  The risk on a shorter time frame is higher, and the return rate through Tradorax on 60 second investments is lower.  I may revisit this group in the future, but for now it doesn’t add up.

I also learned a valuable lesson by acting rationally and exiting the experiment once it became apparent that the objectives were not going to be met.

I am also curious about the time frame.  Traffic seemed light during this experiment, which took place shortly after 3:00 pm eastern standard time.  That is well noted and will be compared with other time frames.  A bit of research about the times with the heaviest traffic may be in order, as I have  a feeling that high volume will increase the accuracy of the indicators.

For these reasons, while I may not have experience a gain in terms of balance sheets, I did receive a gain through education and experience.  We should consider today’s loss a “tuition cost.”  Or better yet – the price of ADMISSION!