ATTENTION FRIENDS AND FAMILY! I moderate a closed (only members can see posts) Facebook group called Nadex Ninjas and Pirates I wanted to take a moment to share an example of the kinds of posts we have going on in the group with you all. In the group we discuss many investing strategies that mainly focus on Nadex Binary Options and Bull Spreads. The group is free to join to anyone who is interested. Why am sharing this? I believe Nadex Binary options is an extremely viable means to invest capital and it is so good that I want to share it with everyone I know. It is not uncommon to average 1.5 to 3.5 % return on your capital every week! I do it making 1 to 2 trades a week that takes me about 1 hour of time. I know some seasoned traders making those percentages every day, even more! Nadex options can be traded any time during the day or night and you can make a trade in 5 minutes time or spend all day, its up to you. I just dont want to sit on something that could potentially help you make your financial goals become a reality! The community exists to help you succeed and share resources. Please feel free to share this with anyone you think might be interested! By the way, I am not trying to sell anyone anything or get them to sign up for a membership or join a cult or anything like that, we are just a community of like minded individuals looking to learn and make solid trading decisions. So here is the example: BREAKDOWN OF LAST WEEKS AUD/USD STRADDLE I used to trade straddles and strangles with binary options, and over time didn’t like them for one simple reason. Binary options are all or nothing and many times I would end up with a full loss on my straddle. I love Binaries for certain other strategies, but I finds Spreads for straddles far superior! Then I started to understand spreads a little more and realized one very important distinction over binaries. Spreads, AKA “Bull Spreads” as Nadex likes to refer to them are NOT all or nothing. Spreads can be used to mirror an underlying indice and your risk is not tied to a true or false statement. Your risk or reward is tied to the underlying movement of the indice you have bought or sold. One tick or pip in movement is worth $1 every time. How does this create a better Straddle with Spreads? Many times the market will either, make our full expected move and get us out at 1:1 profit, or UNLIKE binaries we can exit the trade and break even or have only a few dollar loss. Here is a basic breakdown of the movement on the AUD/USD straddle that happened last week (please see the attached pictures). I have marked the charts to breakdown the levels where we would have incurred a loss, broke even or hit our 1:1 profit target. Basic setup: I identified the spread that worked for the news announcement, in this case it was the 6PM to 11PM 200 point spread (announcement was at 9:30 PM EST) Bought the floor of .9160 -.9360 for $16 risk @ .9176; Sold the Ceiling of the .8960 -.9160 for $16 risk @ .9144 I identified my 1:1 take profit as $16 x 3 = 48 pips on one side. 48 pips will cover the risk of both sides as well as net a 1:1 on one side. Set buy side profit target to SELL back at .9208 Set my sell side profit target to BUY back at .9112 Announcement commenced at 9:30 PM EST and we hit our buy side profit target and got out with a full profit. I made sure to exit no later than 9:45 PM if I were monitoring or did not set a profit target. Straddling news announcements with spreads can be a very low risk way to add to your weekly percentages! Make sure you do some homework on past moves on those announcements and make sure the move will cover your 1:1 profit target on one side. Experiment in Demo and trade one or two instruments consistently until you have the math down and the execution. Then, start making some money! Happy Trading! ***PS - last nights GBP/USD straddle was also profitable :-)***
Posted on: Fri, 19 Sep 2014 00:04:44 +0000
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