Will earnings surprise to the upside, or will they disappoint? Will the Fed continue propping up the economy buy buying huge quantities of stocks and corporate bonds? We'll see.
In the meantime, markets are at least showing the appearance of being resilient.
The Dow Jones Industrial average has recently been flat but just made a move through the 200-day SMA, and traveling above the T-Line suggesting that there may be more room for the DOW to move to the upside.
If you believe the markets will stay ABOVE the 200 SMA (26249) for the remainder of the week, then you can trade with Nadex and express your opinion while keeping your risk tightly capped.
One way to trade with Nadex is with a Weekly Binary Option. In this case, I chose the strike price nearest the 200 SMA. That strike price is 26375. I placed a Limit GTC order for $50 per contract traded.
This simply means I'm putting up a maximum of $50 risk for a maximum $50 reward, per contract traded. When the order is executed, Nadex will withhold $50 per contract traded from my account
- If I buy 5 contracts, my maximum risk would be $250, and my maximum reward would be $250
- If I buy 10 contracts, my maximum risk would be $500 and my maximum reward would be $500.
Bear in mind, just because you place a weekly binary options trade doesn't mean you're married to it. You can exit the trade anytime you wish.
If you feel the market is moving against you, you can exit the trade for a partial loss. You can also exit the trade if you are comfortably in the green and want to lock in profits.
If you hold your contract(s) until expiration, then on Friday at 4:15 PM, only one thing will be true:
If you feel the market is moving against you, you can exit the trade for a partial loss. You can also exit the trade if you are comfortably in the green and want to lock in profits.
If you hold your contract(s) until expiration, then on Friday at 4:15 PM, only one thing will be true:
- You will be right, and you will collect $100, per contract traded, or
- You will be wrong, and your payout will be $0
There are many different ways to trade with Nadex, but all trades have one thing in common.
You always know your maximum risk before you place your trade. There are no surprises.
If you're curious about trading with Nadex, download their free demo here. Your account will be funded with $10,000 in play money and you can practice trading with defined risk.
You can fund a Nadex account for as little as $250. Nadex is available for traders in 41 countries.
It's Monday, July 13. This trade is currently open, and taking a little bit of late-day heat on a selloff. We'll revisit this trade later on in the Week
