Nadex Trade of the Day - 20-Minute Binary Options

With the recent volatility in the market place, trading the US Indices with Nadex  20-minute binary options requires a strong opinion about the direction of the market and the dexterity to take profits quickly or exit if a trade is moving against you.

Nadex offers 20-minute binary options for trading futures on four of the major US Indices:

• US 500 (S&P 500)
• Wall St. 30 (Dow 30)
• US Tech 100 (NASDAQ)
• US SmallCap 2,000 (Russell 2k)

In today's trade, a 20-minute binary option was placed on the US 500 index for the time period of 3:20-3:40 EST.

The US 500 had been on a brief uptrend and the indicators used to determine the direction of the market were largely in agreement that the market was going to continue to be bullish for the next 20 minutes:

• The candlesticks were riding above the T-Line (8 EMA) on the 5-minute chart (bullish)
• The candlesticks were above the 50 period MA on the 5-minute chart (bullish)
• The market was moving above the 1-minute Ichimoku cloud (bullish)
• Slow Stochastics (12, 3, 3) were overbought, but not tailing down (neutral/bearish)

Click on Chart to Enlarge

As soon as the session opened, a pending/working BUY order was placed deep into the money at >2034.75, risking $50 to make $50. This order stood very little chance of getting was filled, but was placed in the event of a sudden market reversal.

The market ground its way up, before making a Sharp reversal at 3:25. Another BUY order was placed at >2040.75. But this time the trade was out-of-the-money, risking $20 to make $80 per contract. This order filled.

Within four minutes, the market climbed above 2040.75 and the contract showed a profit of $33.00, with 8 minutes remaining in the trade. The decision was made to take profit and exit the trade. As it turns out that was a wise decision. For the trade to expire in the money, the contract had to settle greater than 2040.75. It expired exactly at 2040.75, which would have resulted in a $20 loss.

Free Nadex Education Reminder:

• Thursday, Feb. 5  Advanced Trading Strategies (Part One) 8pm-9pm CST Register Here
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The Purpose of this Blog

The Inquisitive Trader will be used  to share my experiences as an investor getting back into trading the markets. In June 2014 I joined the staff at TradingPub, and I am responsible for helping to book speakers for free webinars. Each week, I am exposed to a wealth of information from leading industry experts who teach how to trade the financial markets. When I come across interesting trading strategies, I will summarize my thoughts and share a link to the archived webinar. As I develop my own trading plan, I will also share some of my personal successes and failures. Responsible comments are welcome, but to avoid flaming posts and spam, I will be moderating all comments. I hope you find this blog useful, and wish you the very best on your journey trading the markets.

Disclaimer

The opinions expressed in this blog are solely those of the author, and should not be construed as trading advice. I am not a registered or certified financial planner. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. All individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.