[if i read your post correctly] after the presentation, for those of us who have read Jessie Livermore's biography, the image of a bucket shop comes to mind . If its true that 90% of the traders lose, it pays to be the house!
in all fairness, we as traders, all we do is make bets.
I think what nadex does, at least for the binary options is to allow a smaller retail account be able to trade the markets. for example, I believe 5 nadex options = 1 emini sp500 futures contract. so a trader can adjust the risk, trade 1/5 or 1/2 the emini. or be able to trade more volatile mkts like crude oil or gold with limited risk and limited capital.
no need for a broker, you open an account directly with the 'exchange'. with as little at $100
I don't want to cloud up your view with my reality. There is no certainty that what works for me or what doesn't work for me will mean anything to you.
If I believed that Nadex was the place to trade I'd open an account there. You should do the same.
My simple response was that given my background I will not be opening an account there this afternoon. I was just asking that those contemplating such would consider the structure of the "market" and discover how and what is working for or against them.
When I suggest "read between the lines" I should provide a broader context. Here is a valuable mantra:
Be open and consider all things, evaluate them for what they are and the specific value that they provide to your end. RETAIN what is valuable and LET PASS without harm, that which is not valuable.
My statement that I will not be opening an account there this afternoon is all I will say about that. Guys can do their own research and make their own determination. My statement just means that it does not work at this time for me.
I am posting this to encourage anyone who is considering Nadex. The more volume traded better for everyone. Nadex’s “Bull Spread” will allow you to trade the underlying instrument WITHOUT a stop loss. You can laterally have a 10-point margin of error on an ES futures contract if you are properly hedge with an accompanying Nadex contract. Of course you have to pay for the privilege: The cost can be as small as one ES point for every ES contract traded.
If you don’t want to trade futures, you can just trade the “Bull Spread” on Nadex. The costs are very competitive and again - you have a defined risk.
The Nadex website does a poor job at explaining how to hedge...too bad.
I guess this stuff is only for the advanced trader....
I had never heard about this until I came across this thread. I just opened a demo account to see how it works.
This post is neither a recommendation for or against trading with them., but rather my impression after a short review of their platform and website.
They are regulated by the CFTC. But then again, MF Global was regulated and we saw how well that turned out.
Their focus is on small traders. They have very small account requirements which can be wiped out in one trade.
It's very different from trading a regular futures or forex account, which could lead to an expensive learning curve.
You have a fixed maximum risk which is shown before you place an order. However that risk could be $500 per contract. If a small trader was concerned with limited risk, he might be better off trading a forex mini account.
It is an interesting concept and will appeal to some traders who want something more exotic than trading regular forex or futures accounts. My concern is that with low account requirements and complicated trading concepts a lot of small traders will pay a heavy price.
That's just my $0.02 worth.
I'm just a simple man trading a simple plan.
My daddy always said, "Every day above ground is a good day!"