Binary Options Strategy Testing Script — Indicator by aquajets1

This is a script for testing binary options trading strategies. To test a strategy, modify the 'go_down' or 'go_up' booleans. These SHOULD NOT access any current values (for example, 'ohlc4' or 'close'), or the backtesting will not be an accurate representation of the forward values.

Modify the fraction_return input to be the return rate of the option on success. This is assumed to be a true 100 or 0 option- i.e. if the choice is not correct, there is a 100% loss.

The strategy in place is merely an example, and as you can see, has a very negative rate of return when implemented as a strategy.

Please comment in your code if you use this in any future posts. Thanks!

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.

Want to use this script on a chart?

//@version=2
study("Binary Options Tester", overlay=false)

sma_12_min = sma(hl2,12)
sma_60_min = sma(hl2,60)

go_down = (open[1] > close[1]) and (open[2] > close[2]) and (sma_12_min[1] < sma_60_min[1])
go_up = (open[1] < close[1]) and (open[2] < close[2]) and (sma_12_min[1] > sma_60_min[1])

//win/lose testing. leave these lines for tester
val_win = go_down ? ((open[0] > close[0]) ? (val_win[1] + 1) : (val_win[1])) : (go_up ? ((open[0] < close[0]) ? (val_win[1] + 1) : (val_win[1])) : (nz(val_win[1]) + 0))
val_lose = go_down ? ((open[0] > close[0]) ? (val_lose[1]) : (val_lose[1] + 1)) : (go_up ? ((open[0] < close[0]) ? (val_lose[1]) : (val_lose[1] + 1)) : (nz(val_lose[1]) + 0))
//

fraction_return = input(.88, title='fraction_return')

return = (val_win * fraction_return)  - val_lose

plot(return)
//plot(val_win,color=green)
//plot(val_lose,color=red)
//plot(sma_12_min, color=blue)
//plot(sma_60_min, color=orange)