The Tigger Factor – a highly effective method for options trading

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The “Tigger Factor” – a highly effective method for options trading

This technique is somewhat different from the majority of the most popular indicator trading systems. The “Tigger Factor” method has 87% efficiency, which opens up big opportunities for private investors on the binary market, as it provides dynamic growth of account capital with relatively low risk.

Requirements for the “Tigger Factor” method

Special custom types of professional auto analysis tools are used for the “Tigger Factor” method, and they are capable of assessing a wide range of parameters of price “behavior.” These tools, as they are not available on platforms from companies on the current options market, can be found at our “Analytics” section ( we will need live chart for using this trading method). After searching for and finding the asset you want, add the following auto indicators to its “live” quotes:

• The STARC Bands auto indicator;

• And the tool that gave its name to the technique – the Trend Tigger Factor.

Set the quote time frame to M1. The template field should end up looking as follows:

Since we do not analyze directly on the terminal, we will need to find the fastest and most reliable platform with the most accurate quotes and instantaneous opening of contracts. Platforms that are positioned closer to top will work optimally in this regard. It is a well-known and proven options operator which provides the following on its platform:

• FMRRC protection, which makes it possible to feel confident when working on the national segment of the options market;

• More than 80 types of different high profitability assets;

• Trading with “Turbo” and standard contracts;

• A choice of expiration terms starting at 1 minute;

• Accurate quotes from an outside trading service;

• Instant opening of trades;

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• No pauses or hangs;

• $10 for a starting account, $1 for the minimum contract;

• Technical support 24/7.

Expirations

In the system testing mode, it was determined that the optimal time for contracts to operate using the “Tigger Factor” method on the Binomo platform is from 5 to 15 minutes when using the M1 time frame of the price chart. When using those parameters, the method brings the highest amounts of profit.

Signals of the “Tigger Factor” method

Trades are to be opened UP when these signals from the auto indicators of the “Tigger Factor” method are recorded:

• On the STARC Bands auto indicator there is an intersection in an upward direction of its dotted line with the price of the asset;

• The AK Trend ID auto indicator line which is moving in an upward direction changes its color to green;

• The Trend Tigger Factor auto indicator uses its moving to intersect the critical lower level upwards:

After noting these movements from the auto indicators of the “Tigger Factor” method on the template field, proceed instantly to the platform you prepared in advance and trade UP:

Trades are to be opened DOWN when these signals from the auto indicators of the “Tigger Factor” method are recorded:

• On the STARC Bands auto indicator there is an intersection in a downward direction of its dotted line with the price of the asset;

• The AK Trend ID auto indicator line which is moving in a downward direction changes its color to red;

• The Trend Tigger Factor auto indicator uses it’s moving to intersect the critical upper level downwards:

After noting these movements from the auto indicators of the “Tigger Factor” method on the template field, proceed instantly to the platform you prepared in advance and trade DOWN:

Money management

Thus, a safe mode of trading on the exchange when using the “Tigger Factor” method can be achieved by applying the standard principles of money management. As for differences in the sizes of the account capital of private investors on the options market, the principles of capital management under various financial conditions will vary as follows:

• If you have not yet managed to “get very far” with the minimum amount of account capital, which is set on the most of platforms at 10 US dollars, then you should use apply only minimal trades worth 1 US dollar for some time.

• When the account has grown, or if it initially amounted to more than $100, the size of trades can fluctuate up to 5% of the volume of funds in the investor’s personal account.

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

A scalping strategy for options

The format of scalping on options is a fairly common way of making a profit in this area of the market. The speed of trading and its high profitability results are the main factors that attract people to this method of trading. Today we will consider the effectiveness of high-speed trading, as well as a few practical examples of scalping strategies for futures contracts that could become highly effective tools for predicting the market using short-term contracts.

How reliable is the scalping strategy for options?

The question of reliability and effectiveness of this strategy for scalping on the market is primarily related to the effectiveness of the trading signals of the system, as well as the correct risk management. In addition, the reliability of this scalping strategy is tied to the professional level of the trading terminal and the parameters of the trading conditions that are available on the operator’s platform. By picking the right technical and trading parameters for the scalping strategy you can get fairly stable and high results using this trading format. Here are a set of recommendations that contribute to the effectiveness of scalping on options:

• Use platforms for trading from professional companies — in this regard, we recommend the terminal for futures trading from the our brokers rating, where you will find all the necessary technical indicators for scalping, as well as a set of highly effective forecasting tools
• Carefully and accurately calculate the risks when registering trading positions. The correct ratio of the cost of the trade to the volume of capital will help you avoid critical losses and drawdown in your account
• To conduct trading in scalping mode, use a system with an efficiency level of at least 85% and maximum universality for all underlying assets

This list of recommendations will allow you to engage in high-frequency trading in a safe and profitable mode.

Scalping indicators for options

Market professionals recommend using technical indicators that are capable of generating signals on fast impulse changes in the price of an asset as forecast indicators for scalping trades on the futures market. In this case, the main trend indicators work perfectly, and they can be found on the many platforms:

This set of forecasting tools will allow you to build universal strategies for scalping on electronic options.

A scalping strategy for futures trades – practice

For our first practical example of a strategy for scalping on the financial market, we will show a system that uses a combination of settings of two trend indicators. This format of generating technical signals allows you to best assess the current market situation on the asset chart and opens up the possibility of determining the points of price quotes where the chart reverses to build corrections or new trends. So, let’s set the following technical forecasting tools on the asset quotes:

• EMA Indicators with technical parameters 10, 20, 30
• 2 MACD indicators — 50/75/9 and the standard configuration

We will use turbo trades with an expiration period of 120 to 240 seconds, and we will register the positions when we receive the following signals from the indicators:

• EMA Indicators – a beam of movings reverses upwards on the chart after convergence in one point
• Indicator MACD 50/75/9 – the lines intersect upwards
• Standard MACD – the movings intersect level 0 upwards

Signals for trades DOWN will have the reverse building configuration. This scalping strategy format has a technical signal efficiency ratio of 90% and allows you to make the most stable earnings for short-term trading. It should be noted that the risk management parameters for this system are of the classic parameters – the maximum amount of trading funds for one trade should not exceed 3% of the total amount of capital.

Scalping in 1 minute

The next scalping strategy format for electronic options is designed to work with contracts that have the minimum expiration period of 1 minute. Here, trend indicators are also used with subtle settings parameters, allowing for the formation of two types of trading signals for turbo contracts. In this way, we will achieve high cyclicity of our technical signals and increase profit opportunities for scalping since this operating approach makes it possible to register contract packages. So, let’s install the following instruments on the trading chart:

• SMA 5 and 10 indicators — we use blue for the moving with a five-minute period of building, for the second technical tool we use the standard coloring.
• MACD indicator – standard

To register trades UP with expirations of 1 minute, we use the following types of technical indicator signals:

Signal for the 1st type:

• The technical movings of the MACD indicator intersect upwards
• The blue lines of the SMA indicator intersect the second moving upwards

Signal for the 2nd type:

• The MACD oscillator lines intersect level 0 upwards
• The SMA indicator movings diverge upwards on the chart without intersecting

Using these signals, you can register up to 40 trades with short-term options in one hour, of which 90% will close with a profitable result. This factor will make it possible for you to earn up to 300% per week on options scalping.

Let’s sum up — scalping with futures trades using the correct mode of risk management and in combination with an effective trading system is the most rapid way to increase your account balance.

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

7 Habits of Highly Effective GENCOS #7: Trading & Position Management

When it comes to reducing risk and maximizing value, the most successful market participants do much more than just bid load and offer generation into the day ahead (DA) market.

Relying solely on the spot market introduces unacceptable uncertainty and risk to GENCOs since spot optimization can result in a relatively wide distribution of asset returns such as higher earnings risks.

Conversely, portfolio choice or optionality, allows market participants to better manage risks and extract value arising from uncertainty and volatility.

This final post in the blog series, “7 Habits of Highly Effective GENCOs”, discusses four key functions that effective modeling can improve to ultimately enhance overall trading and position management for risk reduction and profit maximization. They are:

  1. Position Management
  2. Bilateral Trading
  3. Co-optimizing Gas & Power
  4. Monetizing Extrinsic Value & Delta Hedging

I. Position Management: Long or Short?

Highly effective GENCOs begin each morning with two critical questions:

  1. Am I net long or short?
  2. What is my true production cost?

Reducing risks and maximizing value via bilateral and financial trading is impossible without accurately knowing your position. Cursory estimates will exacerbate risks and uncertainty that we seek to eliminate.

Sophisticated market participants utilize software to quickly estimate their net position by considering inputs such as:

  • Load (bid and forecasted)
  • Generation offers
  • Self-schedules and virtuals
  • Imports
  • Exports
  • Financial bilateral data

RTO market participants begin each morning “on the clock” preparing portfolios in a rush to beat the market submission deadline. There’s no time to waste manually calculating positions when state of the art software will provide the answer in minutes.

With an increasing reliance on natural gas to complement intermittent resources, there’s a significant requirement for accurate market price and fuel supply forecasts each morning. You need to correctly answer an important question:

“Will my generator be awarded in the day ahead market?”

The natural gas fuel supply challenge is only heightened inside of ISO/RTO markets due to the misalignment of gas and power, as well as the time sensitive and financially binding nature of market activities.

Precious time is also required for risk analysts to perform stochastic simulations (assessing the impact of market price volatilities, unit forced outages, load uncertainties, etc.). Here, automating low value data input tasks allow a trading floor to focus on high value analytical studies. Stochastic forecasts predict the probability of various outcomes under different conditions using random variables.

II. Bilateral Trading

Contrary to some perceptions, organized markets do not replace bilateral transactions altogether. Bilateral trading can complement ISO/RTO markets, while the efficiency and transparency of organized markets benefit bilateral transactions.

Buyers and sellers coalesce inside of markets at hubs, some of which offer more liquidity and volatility than others. For events like planned and unplanned unit outages, these bilateral trading points provide an important risk management tool.

For example, if a market participant loses a generator for a week, they may purchase power at a hub for a fixed price. The hub trade offers price certainty and transparency. The hub purchase also offers an alternative to relying on the spot market to cover your short.

Buyers face greater risks than sellers in waiting to transact in today’s spot markets, so sellers can often charge a premium for bilateral contracts.

Further, bilateral trading in markets relies heavily on precise Locational Marginal Pricing (LMP) forecasts, and the effective GENCO will leverage LMP forecasting solutions to evaluate opportunities and predict market awards.

In today’s markets, most bilateral transactions would be considered short-term, or less than two years.

Long-term bilateral contracts are often viewed as a source of stranded costs should spot prices ultimately fall behind contract prices for a prolonged period. However, even these long term PPAs present additional optionality for a GENCO to produce value via short term bilateral trades.

Many GENCOS view long-term bilateral PPAs as a more cost-effective way to integrate green power into their portfolio. Effective bilaterally trading strategies around these assets may lower the integration costs.

Value is extracted by identifying and monetizing the optionality of these long-term agreements.

III. Co-optimizing Gas & Power

Power plant valuation has traditionally focused on the intrinsic value, or the value of dispatching the plant against prices observed in forward markets. There’s an assumption here that you must use fuel to generate power.

You don’t have to.

As we know, many GENCOs today are experiencing large scale coal retirements coupled with an increase in renewable and gas generation:

Less Coal + More Renewables & Gas = Enhanced Portfolio Optionality

The added optionality gained by increasing the amount of renewable and gas resources in a portfolio enhances risk mitigation along with the ability to monetize asset value opportunities.

Let’s take a moment to consider one strategy to utilize optionality for co-optimizing gas and power in short-term markets.

The spark spread is the difference between the price received by a generator for electricity produced and the cost of the natural gas needed to produce that electricity. It is typically calculated using daily spot prices for natural gas and power at various regional trading points.

Depending on spreads and their liquidity conditions at hubs and pipelines, an opportunity may exist to buy power cheaper than your ability to produce and sell the gas at a profit. In other words, a GENCO could evaluate the optimal solution to either:

  1. Burn fuel & produce power?
  2. Transact fuel & power separately?

The only efficient way to identify and capitalize on these optimization opportunities is to utilize advanced modeling capabilities such as stochastic forecasting.

IV. Monetizing Extrinsic Value & Delta Hedging

Power plants may also be viewed as “options” and opportunities exist to monetize extrinsic value, which is the value assigned to an option by factors other than the underlying asset’s price. By extension, this is the opposite of intrinsic value.

For example, fuel and operational flexibility afford chances to monetize the extrinsic value of a power plant. Some coal and gas plants incorporate fuel switching. Operational flexibility refers to power plant dynamic behavior such as start/stop regimen, minimum load and ramping.

If you use a robust unit commitment model (one that offers near real-time decision support, long range planning, and post analytics) you can unearth and monetize the extrinsic value of your entire generation fleet. GENCOs may execute this strategy via a rolling intrinsic or delta hedging strategy that monetizes volatility.

Delta hedging is the process of setting or keeping the delta of a portfolio as close to zero as possible. It’s an active process and ongoing activity performed daily by the portfolio manager. Liquidity challenges with long-term bilateral hedging essentially mandate the highly effective GENCO to use financial options to protect from downside price risk.

As forward prices fluctuate, managers can adjust and improve on forward hedge positions to increase generator returns.

As real-time delivery approaches, they can capture additional value using the operational flexibility (e.g., of a combined cycle asset) to respond to spot market volatility.

Extrinsic value is often not as clear to some as intrinsic value and capturing it relies heavily on market liquidity and clear definition of what are “acceptable” transaction costs.

In order to properly value a generator, it is always useful to consider it as an option with both intrinsic and extrinsic value elements.

Conclusion

Throughout our “7 Habits” blog series, we’ve examined methods and systems that can substantively assist GENCOs in minimizing uncertainties inherent in energy markets – where almost nothing stays the same for long, including:

  • Policies and priorities
  • Industry structure
  • Market design and rules

Dynamism and change are everywhere, demanding the highly effective GENCO take a 360° view of portfolio optimization and management by utilizing techniques and tools such as those referenced in this article (Position Management, Bilateral/Financial Trading, Co-optimizing Fuel/Power, and Monetizing Extrinsic Value).

A GENCO has four primary objectives:

  1. Automation and streamlining of operations
  2. Seizing every potential market opportunity
  3. Cost minimization
  4. Profit maximization

These objectives must be achieved but further, truly innovative GENCOs must also ensure that commercial operations staff are able to focus on the highest value-added activities. Implementing a platform like PCI GenManager to manage key components of the bid-to-settlement trading cycle empowers employees to devote more time analyzing ways to mitigate adverse portfolio impacts and risks.

PCI’s GenTrader platform allows you to model your entire asset portfolio, including:

  • Thermal generation including, complex combined-cycle assets
  • Hydro generation (e.g., cascaded and pumped storage assets)
  • Renewable generation
  • Market prices (power, fuel, ancillary services, emissions, etc.)
  • Complex option and forward contracts
  • Fuel constraints and energy-limited options

There are other, key capabilities critical to GENCO success today that include:

  • Energy Trading & Risk Management (ETRM)
  • Post analytics
  • Front-to-back office workflow management
  • Business Intelligence (BI) and reporting

All of the mission critical functions mentioned should ideally be performed on a single platform in order to create operational efficiency and actionable insights. PCI provides that common platform to enable all of this (and more) across all parts of the highly effective GENCO.

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