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Anyone heard or trading with Nadex (North American Derivatives exchange) ?
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Anyone heard or trading with Nadex (North American Derivatives exchange) ?

  #61 (permalink)
Trading Apprentice
Indianapolis, IN
 
Futures Experience: Intermediate
Platform: North-American Derivatives Exchange
Broker/Data: Forexpros
Favorite Futures: forex binaries
 
lili's Avatar
 
Posts: 38 since Nov 2012
Thanks: 14 given, 21 received

Maybe that's the thing that makes Nadex so "different"?

You're not really "betting" on the final outcome (in or out of the money) of a certain option.
I never wait for any of my trades on Nadex to "settle" above or below a specific price (for the binaries).

I watch the underlying instrument's chart on my favorite real-time chart provider
and I also watch the chart for the corresponding option on Nadex.

I look for very clear (visible even for my untrained eye) directional moves, which have to be solid enough to be sustained for at least an hour (better five hours). I look at the 5 minutes, 15 minutes, hourly, and daily charts before deciding on an instrument to trade. Some days I don't find that kind of certainty - then I don't do it.

When the price on Nadex is somewhere between 40 and 60, I put in a buy order slightly below the low end of the Nadex price range for uptrending (with certainty!) underlying instrument - or I set up a sell order slightly above the high end of the Nadex price range for a (visibly!) downward moving underlying instrument.

As soon as my initial order is "triggered", I set up the corresponding closing order - figuring in the fees (.90 per contract, max. 9) and adding my target profit. About an hour later I come back to see if I'm "done" yet.

So far my average trade from open to close lived for only 20 minutes - I'm in and out of there long before any of those options settle.

I've also lost some of my trades.
When my initial assessment was incorrect, or I was curious to experiment, or there wasn't enough time left on the option, my closing order was never triggered - because I misjudged the direction or the timing of things - and then the opening trade eventually settled, out of the money in those cases.

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  #62 (permalink)
Trading Apprentice
morristown, nj
 
Futures Experience: Beginner
Platform: MetaTrader
Favorite Futures: eur/usd, gold, oil, forex
 
Posts: 1 since Dec 2012
Thanks: 0 given, 0 received

your strategy to stay profit


drmartinjr3i View Post
The creators?? Who is that??
Nadex is an exchange they only make fees ...traders and market makers on other sides .... If you understand them which is not hard you can make a lot I'm up 5k in 3 months starting with only $250

since you are doing so well, why don't you share your strategy to stay profit?

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  #63 (permalink)
Trading Apprentice
Indianapolis, IN
 
Futures Experience: Intermediate
Platform: North-American Derivatives Exchange
Broker/Data: Forexpros
Favorite Futures: forex binaries
 
lili's Avatar
 
Posts: 38 since Nov 2012
Thanks: 14 given, 21 received



newbie2013 View Post
since you are doing so well, why don't you share your strategy to stay profit?

he/she did already - just look for posts from @drmartinjr3, and you'll find a nice description of that strategy - which I adapted a little for my own level of comfort. And yes, it works nicely. Mostly because it's simple psycology and has little or nothing to do with the underlying instruments.

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  #64 (permalink)
Elite Member
Dallas, Texas, United States
 
Futures Experience: Intermediate
Platform: TradeStation
Favorite Futures: Forex
 
Posts: 2 since Dec 2011
Thanks: 1 given, 1 received

Here's some of my impressions after trading with NADEX for about a year, on and off:

1. They have 2 main products, binary options in 2 hour, daily, and weekly durations, and "bull spreads" which are really equivalent to bull or bear spreads depending on if you buy or sell them. The "bull spreads" are only available in intraday forms, or daily but the daily only has one really wide spread spanning the day's starting price so it's of limited use.

2. The bid/ask spreads are basically wide, so don't plan on scalping anything. It appears as if most of the liquidity is provided by market makers. The spread on FOREX is about 3 pips, sometimes 5 pips. The US 500 ( ES equivalent looks like a spread of about 0.40-0.50 ). The binaries are usually about a 10% spread ( ie Bid 50-Ask 55 ). I haven't seen slippage, but with those spreads it will feel like you slipped.

3. The risk control is the best aspect - you have 100% certainty of limited risk, and you can select some "swing for the fences" type plays in front of news events for not a bad price.

4. The leverage can be really strong, especially with 2 hour binaries nearing expiration. You can see swings from 20 to 80 on the contract in a couple minutes sometimes.

5. Contrary to previous posters, there is definitely a "time value" to the options. For instance if a bull spread on AUDUSD covers 1.0370-1.0390 and the spot price is currently at 1.0370, you will only be able to "buy the spread" for maybe 1.0375 or 1.0376 if there is 2 hours left. Binaries also show "time value" which will burn off when out of the money. For instance, if price is 25.00 with 1 hour left, it will probably be about 10.00 with 20 minutes left. This can help you if you buy in-the-money binaries, or hurt you if holding out of the money ones.

The best value I found was trading the 2 hour binaries for Forex moves. Unfortunately, this is only available during the 8 AM-3 PM ET timeframe, so it doesn't work for Asian session trades when it would have the most value in my opinion, since that is when prices are dead and you want something to amp up the leverage.

Occasionally, there can be a use for the box spreads when price is near some sort of support/resistance zone, and you want to put on a low risk trade at minimum risk, say overnight on Forex.

If trading long binaries, a good strategy is to buy around 25, and sell at 50 when it crosses just past the strike. Another potential strategy is to buy binaries at 55 or so, expecting to hold until expiration, which allows time to work for you in the event the price just stagnates.

NADEX is OK for learning at a cheap price with real money. Say, if somebody blew out their account and was trying to rebuild it would give somebody a way to trade for minimal $$. Or to try out some new strategies. You can put some box spreads on for maybe $6 or $7 at times, so it doesn't always have to be a $50+ binary option.

The biggest drawback besides the spreads are that the majority of products are intraday and daily, so you will tend to get mentally coerced into a scalping/intraday mindset, and will not be able to put swing trade positions on and ride them through very much adverse price action. I found my 2 hour box spreads were sometimes expiring before the move got fully underway. Also, NADEX is closed between 3 PM-6 PM ET, so you can't trade FOREX across that time. Weekly binaries are OK for swing trades sometimes, but you are screwed if you see an opportunity on late Thursday or Friday, since the only options available at that point expire Friday at 3 PM ET. You can't trade for next Friday like you could on a normal weekly option.

Another drawback is that you cannot place any advanced orders, such as stop orders, brackets or anything like that. You are stuck with Limit orders only. That means you need to only buy options that you feel comfortable holding to expiration for the most part, or else have a hard target and place the Limit order at the time of the trade. Attempting to "stop out" is problematic since you have to watch the screen and be there to put the exit orders in.

If anyone wants to learn about trading NADEX, check Youtube and look for their channel, and there is also a company called "Trade with Precision" that was putting on free webinars for them as well. Lately, NADEX has taken to using APEX for their recent webinars, but I think the "Trade with Precision" webinars were better and less hype.

Also, FWIW - I am not affiliated with NADEX, Trade with Precision, or Apex.

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  #65 (permalink)
Trading Apprentice
Indianapolis, IN
 
Futures Experience: Intermediate
Platform: North-American Derivatives Exchange
Broker/Data: Forexpros
Favorite Futures: forex binaries
 
lili's Avatar
 
Posts: 38 since Nov 2012
Thanks: 14 given, 21 received

yes, that assessment would be absolutely correct - given my personal (limited) experience with Nadex.

It's what makes this my favourite trading platform, because it has everything I want.
I just need some "entertainment" during my lunch break, to keep the brain active.
I like the strictly limited risk, the low amount of capital needed, and the "instant gratification" easily attained.

I focus on their daily forex binaries, I only go long, and I never wait for my contracts to settle.

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  #66 (permalink)
"simplify."
Lincoln, NE, Husker Nation
 
Futures Experience: Intermediate
Platform: NINJA7, Zen/CQG
Broker/Data: Global, CQG
Favorite Futures: CL, TF
 
Posts: 31 since Jun 2012
Thanks: 38 given, 10 received

NADEX

Looking into NADEX right now myself. Low risk, US Regulated. I like that. Currently Demo-ing.

Anyone tried Spread Straddles/Binary Straddles?

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  #67 (permalink)
Elite Member
Bay Area California
 
Futures Experience: None
Platform: TT T4
Favorite Futures: Futures
 
Posts: 719 since Nov 2011
Thanks: 635 given, 740 received

Binary options are actually very cool betting instruments. Nadex seems to use a standard options pricing model which assumes a normal probability distribution. couple that with the all or nothing fixed payout It actually seems to provide an asymmetric amount of leverage. It becomes a VERY cheap way of picking tops/ bottoms.

"If I agreed with you, we'd both be wrong."
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  #68 (permalink)
Trading Apprentice
Indianapolis, IN
 
Futures Experience: Intermediate
Platform: North-American Derivatives Exchange
Broker/Data: Forexpros
Favorite Futures: forex binaries
 
lili's Avatar
 
Posts: 38 since Nov 2012
Thanks: 14 given, 21 received

in my opinion the best part is that you don't even have to wait for the "all or nothing" settlement payout you can take profit early.

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  #69 (permalink)
Trading Apprentice
New York, NY
 
Futures Experience: Beginner
Platform: Multicharts DT
Favorite Futures: Russell 2000 (TF)
 
nytrader's Avatar
 
Posts: 4 since Jan 2013
Thanks: 1 given, 0 received

Hello everyone!

I am currently trading futures but I am not profitable because I keep getting stopped out. My situation is similar to some guy that posted in this thread. Iam usually right in predicting the market but get stopped out before I am right.

Can someone please explain to me how their commissions are compared to regular futures brokers. I currently pay $5.52 for round turn.

Thanks

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  #70 (permalink)
Trading Apprentice
Indianapolis, IN
 
Futures Experience: Intermediate
Platform: North-American Derivatives Exchange
Broker/Data: Forexpros
Favorite Futures: forex binaries
 
lili's Avatar
 
Posts: 38 since Nov 2012
Thanks: 14 given, 21 received


Nadex charges a flat 90 cents fee per contract, capped at $9.

Means, if you buy or sell one contract, you pay $0.90.
If you buy or sell 10 contracts (with one order), you pay $9.
If you buy or sell 100 contracts (in one order), you still pay $9.

So, in a nutshell, your "round-trip" will cost you anywhere between $1.80 and $18 - depending on how many contracts you are moving around.

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