The Inquisitive Trader: Binary Trade Group

Showing posts with label Binary Trade Group. Show all posts

Saturday, July 4, 2015

My 3rd Quarter Nadex Trading Plan.

7am-9am "Strudel" Strategy

One year ago, I started my trading journey with Nadex. I was immediately drawn to this trading platform because I liked the idea that all of my trades were capped with a maximum risk and a maximum reward. There was no way a trade could run away from me. I also liked the fact that Nadex is a federally regulated exchange (CFTC) and not an offshore bucket shop.

Trading isn't easy. If it were, everyone would be raking in money hand over fist. It requires patience, alertness and hours of study to manage your trading emotions and to master strategies with a proven track record of performance.

Like most successful veteran traders I've talked to, I have made my fair share of rookie mistakes. Name a trading mistake, and I'm pretty sure I've made it.

One of the key elements of successful trading is to have a trading plan. This is your road map to trading. Without a trading plan, traders can trade randomly, jump in on untested theories, and lose money.

In this article, I'm going to share how I am going to map out my trading day for the 3rd Quarter of 2015 in my live trading account.

Daily Trading Calendar:

Before I start trading, I check the Economic Calendar for the day on Investing.com. During Earnings Season, I also take a look at the Earnings Calendar on Morningstar.com to see which companies are reporting for that day, and whether results are being released before the market open or after market close. Finally, I take a quick look at Google News, CNBC and Bloomberg to see if there's any overnight geopolitical news that might affect the markets. Now I'm ready to trade.

5:00am - 8:00am EDT: The London Breakout Strategy

London Breakout Strategy Feb 5, 2015 (Click on Chart to Enlarge)

If I wake up early enough, I check the Economic Calendar, and pull up the charts for the GBP/USD. I watch the price movement of this currency pair between 2am-5am. What I'm looking for is to see if a breakout is occurring during this time frame. If there's economic news being released out of the UK, it normally happens at 4:30 am. If the market breaks out bullish, I BUY from support, If the GBP/USD breaks bearish, I SELL from resistance. I set my expiration for 3pm daily on this trade.

During the 4th Quarter of 2014, I had a great deal of success with this trade. Not so much in the 1st Quarter of 2015. With the US Dollar Index trading at near 14 year highs, and the GBP/USD trading at 12 year lows, there was a lot of tension in this trade. Sometimes negative UK news reports would result in a huge uptrend. The real culprit was the Dollar Index falling that day. I find that this strategy works more reliably when there is a little more balance between the strength of the US Dollar vs. the British Pound.

This is not my favorite strategy, because it requires me to get up really early. But if I'm awake and I really like the setup, then I have no problem trading this strategy in my live account.

7:00-9:00am EDT - German DAX "Strudel" Strategy

"Strudel" Strategy February 20, 2015 - Click on Chart to Enlarge

This is my favorite trading strategy, and it has held up remarkably well since I first developed it in August 2014. This was based on a Futures strategy from Tom Busby that I adapted and applied to Nadex. It doesn't require special charts or lots of indicators. Simply pull up the hourly charts on the Nadex Germany 30 (DAX) Index at 7am EDT and monitor the development of the hourly candlestick. Once you are convinced that the hourly candlestick is bullish, then BUY from the first Nadex strike price BELOW the 7am hourly opening price. Once you are convinced that the hourly candlestick is bearish, then SELL from the first Nadex strike price ABOVE the 7am hourly opening price. It's really that simple. Click on the link above for a more detailed description of this strategy.

Over the past 60 trading days, which is almost 3 months of trading, the rules of this strategy held 90% of the time. If you managed to get into every trade, then 54 of your 60 trades would have expired in the money for full profit. 6 of those trades would have settled out of the money.

Important Note: There is no DAX feed on ThinkorSwim. To get this feed, you will need Nadex charts, Investing.com, Ninja Trader or other charting platforms with a DAX feed.

9:00-11:00am EDT - The FTSE 100 "Footsie" Strategy

"Footsie" Strategy June 24 2015 Click on Chart to Enlarge

Just like the "Strudel" Strategy, the 9:00-11:00am "Footsie" Strategy is remarkably consistent. Simply pull up the hourly charts on the Nadex FTSE 100 Index at 9am EDT and monitor the development of the hourly candlestick. Once you are convinced that the hourly candlestick is bullish, then BUY from the first Nadex strike price BELOW the 9am hourly opening price. Once you are convinced that the hourly candlestick is bearish, then SELL from the first Nadex strike price ABOVE the 7am hourly opening price. It's really that simple. Click on the link above for a more detailed description of this strategy.

Over the past 60 trading days, which is almost 3 months of trading, the rules of this strategy held 75% of the time. If you managed to get into every trade, then 45 of your 60 trades would have expired in the money for full profit. 15 of those trades would have settled out of the money, so loss management is more important. With a recent 75% probability of success, I still like this strategy.

Important Note: There is no FTSE 100 feed on ThinkorSwim. To get this feed, you will need Nadex charts, Investing.com, Ninja Trader or other charting platforms with a FTSE 100 feed.

11:00am-1:00pm EDT: The Lunchtime "Caret" Trade

Lunchtime "Caret" Trade - Click on Chart to Enlarge

I don't trade this strategy daily, but I do keep an eye on it to see if a setup is in play. If the S&P 500 is rising going into the 11am hour and continues to rise, I look for signs of exhaustion and reversal on declining lunchtime volume. If a reversal is confirmed, then I SELL from a Nadex strike price above the peak of the reversal. A very nice trade if the setup reveals itself. For full details on this strategy, Click here.

1:00-7:00pm EDT - GBP/USD "Afternoon Delight" Trade

"GBP/USD "Afternoon Delight" June 24, 2015 Click on Chart to Enlarge

This is a very consistent strategy that is extremely simple to execute. All you really need is a 15 minute chart of the GBP/USD and the MACD indicator. I'm looking for a MACD crossover after 1pm. If the crossover is BULLISH, then I BUY the GBP/USD at a strike price BELOW where the market was at the crossover. If the crossover is BEARISH, then I SELL the GBP/USD at a strike price ABOVE where the market was at the crossover. Pretty simple. The only thing I don't like about thisstrategy is that Nadex goes dead from 5pm-6pm EDT. Still, I rarely lose when I trade this strategy. Click Here for details on this strategy.

8:00-10:00pm - Nikkei 225 "Kanpai" Strategy

4 Consecutive Days of the Nikkei 225 "Kanpai" Strategy. Click on Chart to Enlarge

Kanpai means "Cheers" in Japanese, and this is a nice trade to end the day. Just like the "Strudel" strategy, the 8pm hourly candlestick controls the 9pm hourly candlestick the vast majority of the time. Simply pull up the hourly charts on the Japan 225 (Nikkei) Index at 8pm EDT and monitor the development of the hourly candlestick. Once you are convinced that the hourly candlestick is bullish, then BUY from the first Nadex strike price BELOW the 8pm hourly opening price. Once you are convinced that the hourly candlestick is bearish, then SELL from the first Nadex strike price ABOVE the 8pm hourly opening price. It's really that simple. Click on the link above for a more detailed description of this strategy.

Over the past 60 trading days, which is almost 3 months of trading, the rules of this strategy held 85% of the time. If you managed to get into every trade, then 52 of your 60 trades would have expired in the money for full profit. 8 of those trades would have settled out of the money.

Important Note: There is no Nikkei 225 feed on ThinkorSwim. To get this feed, you will need Nadex charts, Investing.com, Ninja Trader or other charting platforms with a Nikkei 225 feed.

A Full Day of Trading Opportunities

The strategies I follow cover a full day of trading from 5am-10pm. That does not mean I am glued to my computer for 17 hours looking for trading opportunities. Once I hit my daily profit target, I'm done for the day. Sometimes I just don't fully trust a strategy, and I move on. And yes, some days I take a break from trading.

Important Note: If you are brand new to trading these strategies, please don't take my word as gospel. Try them out for yourself in demo mode until you are convinced whether it's the right strategy for your trading style.

Free Nadex Education Reminder:

Monday, July 6 Directional Trading with Nadex Spreads 7:00pm EST Register Here

Curious about Nadex? Open Your Free,
2-Week Nadex Demo Account!
Nadex is available to trade in 46 countries!

Video: Breakfast, Lunch & Dinner
Trading Strategies with Nadex
By Cam White, TradingPub

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.

Monday, June 15, 2015

A Low-Risk, High Reward OTM Trade on SP500 Futures with Nadex

By Cam White, TradingPub

Out of the Money (OTM) trades with Nadex offer the opportunity to make significant profits on very little money risked. Since the probability of OTM trades expiring successfully is low, it is important to have a strategy that predicts a significant breakout or a reversal in the markets.

Today, I wasn't inspired by the markets at the opening bell. The S&P 500 futures were diving on Greek default worries and several bearish economic reports from the U.S. From 6:40am - 9:40am, the S&P 500 futures market fell 14.25 points. Would the market continue to fall, or would it bounce back?

Just after 9:40am EST, Sean Jantz, founder of the Binary Trade Group posted a message on their private Facebook chat page that he was BUYING the /ES. Buying? Really? I had to take a closer look. He had chosen an in-the-money trade, risking $80 to make $20. He was trading from a position of extreme safety, and I had little doubt that his trade would be successful.

But if a reversal was truly in play, I had to take a look at the charts:

Click on Chart to Enlarge

Every night, Sean prepares his "Battle Plan" for the /ES (S&P 500) , /TF (Russel 2K), /CL (Crude Oil) and /GC (Gold) futures markets. He plots Value area boxes, historical points of control (POC) and daily deviation levels. Then he shares his ThinkOrSwim (TOS) workspace with his subscribers, along with a YouTube "Battle Plan" for the /TF and /ES markets to help members follow his trading plan (see video below).

Looking at at the charts today, you can clearly see the bearish momentum in the /ES between 6:40 and 9:40. The market dove was below the Value Area Low (VAL) box shown in gray, and diving through the -.5 deviation level before hitting the -1 standard deviation level. According to Sean, there's a 70 percent probability that the market will close above the -1 deviation level. Sean placed a daily trade, buying at 2064, just below the -1 deviation level. He risked $59.25 to make $40.75, per contract. The odds were on his side.

Using the same information, I was wondering how far the market would make its reversal. Could the market move from the -1 deviation level, which was acting as support, all the way back up to the -.5 deviation level? If so, what kind of OTM trade would Nadex offer me?

I looked at the Nadex Charts and selected the 10am-12pm time frame. The market was trading around 2067 just after 10am. Looking at the price ladder, I took a Nadex BUY proposition at 2074.5, risking a maximum of $13.25 to make a maximum of $86.75 per contract. The 2074.5 strike price was just a hair below the -.5 deviation level. Very little risk for a potentially nice return.

Here's how the trade played out:

Click on Nadex Chart to Enlarge

Sure enough, as soon as I took the trade, a morning "V" pattern was in play. Within one hour, the market drove upward through my BUY strike price and the -.5 deviation, which I felt would be resistance. Now I had a decision to make: Do I cash out and take a sure profit, or should I roll the dice and see if the market will close above 2074.50 for a full profit of $86.75? At that time, there were 52 minutes left in the trade.

I opted to cash out. I felt that the -.5 deviation level was going to be a hard resistance level. My contract was worth $57 in profit, so I decided to exit the trade and take profit. As soon as I cashed out, the market made a sharp downward reversal, which made me feel better about my decision. Ultimately, the market turned back up before barely expiring ITM at 2074.80. If I had held the contract until expiration, I would have taken the full $86.75 profit.

Here are the trade results:

I bought this contract at $13.25 and sold it for $70.25, resulting in a $57 profit, less $1.80 in exchange fees. With just $13.25 at risk per contract on this trade, I realized a better than four-fold return on capital risked. If I had traded 10 contracts, I would have risked $132.50 for a $570 profit.

Conclusion:

Finding OTM trading opportunities with Nadex offers low risk for potentially high reward. These trades can be really fun when they work.

In the free eBook "Trading Made Simple - Strategies that Risk less than $100", Sean Jantz outlines his mindset and high robability strategies for trading Nadex binary options.

Important Note: OTM strategies only work if the markets are poised for a strong reversal or breakout. If a reversal or breakout doesn't happen, you will likely lose most or all of your capital risked. Fortunately, in this case. $13.25 was a maximum risk worth taking.

If you would like to read more about this strategy, along with 10 other Nadex strategies, make sure to download "Trading Made Simple - Strategies that Risk Les than $100". It's new from TradingPub, and it's free!

Free Nadex Education Reminder:

Monday, June 15 Directional/Reversal & Scalp Trading with Nadex 7pm EST Register Here

For the full schedule of free February Nadex webinars, click here.

Curious about Nadex? Open a Free, 2-Week Nadex Demo Account!
Nadex is now available in 47 countries!

Video: View Sean Jantz's "Battle Plan" for Monday, June 15, 2015
Sean Jantz, Binary Trade Group

The Purpose of this Blog

Disclaimer

Monday, February 23, 2015

Lunchtime "Caret" Trade on the S&P 500 with Nadex Binary Options

By Sean Jantz, Founder
Binary Trade Group

If your work schedule doesn't permit you to trade during the day, here's a trade that you can make almost every day on your lunch break.

Many traders avoid trading at lunchtime because there is just not much volume in the market. With Nadex Binary Options, the lunchtime "Caret" Trade allows you to take advantage of declining lunchtime volume on the S&P 500 Futures market.

Quite often, after a busy morning session, volume on the S&P 500 has a tendency to start declining, usually after 10:00am EST. The market, which has been grinding upward hits resistance, and then starts forming an upside-down "V" pattern. I call it the "Caret" trade because it resembles the "^" symbol above the number 6 on your keyboard.

Click on Chart to Enlarge

In today's lunchtime trade, the "Caret" trade is in play. The market started moving upward after 10:00am as volume declined. At noon, the market hit resistance on the Keltner Channel and the indicators on the Fisher Transformer were lined up overbought. A reversal Star candle signaled a potential reversal. Sure enough, it happened:

Click on Chart to Enlarge

The market started to reverse with a strong SELL signal on the Fisher transformer. The following order was placed:

Trade Details:
Contract: US 500 (Mar) >2107.3 (1PM)
Expiration: Mon Feb 23 13:00:00 EST 2015
Direction: SELL
Quantity: 2
Price: 20.00

Two contracts were being sold, with a maximum risk of $160 and a maximum reward of $40 for this deep in the money trade. Now it's time to see how this trade played out on the Nadex charts:

Click on Chart to Enlarge

Vertical lines were plotted on the Nadex chart (above) denoting the 11am-1pm time frame. As you can see, the 2107.3 strike price chosen was well above the peak of the market, and when the market reversed it was time to kick back and enjoy lunch.

The trade settled in the money for full profit of $40 at 1:00pm, less $3.60 in exchange fees..

About Sean Jantz:

Sean Jantz is Founder of The Binary Group (BTG). He trades mainly Binary Options using the NADEX exchange. Additionally, he makes LIVE Calls on opportunities for members of the BTG private Facebook group on a daily basis, along with other BTG instructors. BTG provides new and experienced traders with daily training sessions for trading Nadex Binary Options.training, and has helped so many in honing their trading skills.

More information about the Binary Trade Group:

Website: http://www.binarytradegroup.com

Free Nadex Education Reminder:

Monday, Feb. 23 The Ultimate Hedge Strategy 6pm-7pm CST Register Here
For the full schedule of free February Nadex webinars, click here.

Curious about Nadex? Open a Free, 2-Week Nadex Demo Account!
Nadex is available to legal residents of the United States, Canada, Mexico and U.S. Territories

Video: Sean Jantz Breaks Down Today's "Caret" Trade

The Purpose of this Blog

Disclaimer

Thursday, February 19, 2015

Lunchtime Trading the S&P 500 with Nadex Iron Butterflies

If you have a busy daytime work schedule and can't follow the markets the way you would like to, here's a trade you can take on your lunch hour. I have recently been following a strategy presented by Christopher Wall, Official Trader and Educator with the Binary Trade Group. After watching a couple of trades play out, and doing some back-testing, I decided to try it out in my Nadex demo account. After a half-dozen trades or so, I am very pleased with the results thus far.

Many traders avoid trading at lunchtime because there is just not much volume in the market. With Nadex Binary Options, the "Iron Butterfly" strategy allows you to take advantage of low volume and a sideways-traveling market. While there are several strategies and indicators you can use, my strategy has pretty simple rules:

Select the 11am-1pm EST time frame for the US 500 Index, which mirrors the emini S&P Futures Market (/ES).
Draw support and resistance lines at the daily high (resistance) and daily low (support) prices for the market.
Place a SELL order at the first strike price ABOVE daily resistance, and a BUY order BELOW the daily support line.
Place a working/limit order that satisfies your risk/reward criteria. Since both of these pending orders are probably deep into the money. You may want to "leg into" this trade, and wait for the market to come close to you before you place your trade. The closer the market comes to your BUY and SELL strikes, the better your risk/reward will likely be.
If both sides of your Iron Butterfly fill, it's time to manage the trade. If the market threatens one of your trade nearing expiration, you may wish to exit that leg to preserve some profit or minimize losses. The other leg will be good. If the market is chopping sideways between both strikes, then you may wish to just sit back, enjoy your sandwich and let both sides of the trade expire in the money for full profit.
That's it. Straightforward and simple. Pleas bear in mind, there are a lot of ways to look at trading this strategy, and I highly recommend watching Christopher Wall's video at the bottom of this post. He does a great job of explaining Iron Butterflies in greater detail.

Let's take a look at yesterday's "Iron Butterfly" Trade: (February 18, 2015):

Click on Chart to Enlarge

Vertical lines were plotted on the Nadex chart (above) denoting the 11am-1pm time frame. Looking back on price movement for the day, Resistance was at 2095.5 and support was established at 2089.5. Using the rules described above, the following pending/working orders were placed:

Trade Details:
Contract: US 500 (Mar) >2095.5 (1PM)
Expiration: Wed Feb 18 13:00:00 EST 2015
Direction: SELL
Quantity: 5
Price: 25.00

Trade Details:
Contract: US 500 (Mar) >2089.5 (1PM)
Expiration: Wed Feb 18 13:00:00 EST 2015
Direction: BUY
Quantity: 5
Price: 75.00

Both pending orders were deep in the money risking $75 to make $25, per contract. Time to be patient and see what happens.

The SELL order filled at 11:25am, when the market peaked. For the next hour, the market moved down and then sideways. It didn't look like the BUY order would fill. At 12:40, the market dropped just down far enough to fill the pending BUY order. Now both sides of the Iron Butterfly are in the market. Time to manage the trade.

With 15 minutes left in the trade, it was time to manage the BUY side of the trade. The SELL side appeared safe. At 12:45, the market spiked up briefly, making the BUY contract worth $50. If this trade were a live trade versus a demo trade, the smart move might have been to exit the BUY order for a guaranteed $50 profit. But this was a demo trade, and I wanted to see how the market responded to my rules. At 12:50, the market came down further, threatening the bottom leg of the Iron Butterfly before running out of gas and expiring in the money.

Both sides of the Iron Butterfly expired in the money for a gross profit of $250.00, less $18.00 in exchange fees for a net profit of $232.00. That will buy a nice lunch!

There are a lot of ways to implement this strategy. With just 6 of these trades under my belt, I won't trade this strategy live until I have at least 20 demo trades under my belt. But it looks very promising thus far. Special thanks to Christopher Wall and the Binary Trade Group for exposing me to this strategy.

About Christopher Wall:

Christopher Wall is an official trader and educator with The Binary Group (BTG). He trades mainly Binary Options using the NADEX exchange. Additionally, he makes LIVE Calls on opportunities for members of the BTG private Facebook group on a daily basis, along with other BTG instructors. BTG provides new and experienced traders with daily training sessions for trading Nadex Binary Options.training, and has helped so many in honing their trading skills.

More information about the Binary Trade Group:

Website: http://www.binarytradegroup.com

Free Nadex Education Reminder:

Thursday, Feb. 19 Advanced Trading Strategies (Part Three) 8pm-9pm CST Register Here
For the full schedule of free February Nadex webinars, click here.

Curious about Nadex? Open a Free, 2-Week Nadex Demo Account!
Nadex is available to legal residents of the United States, Canada, Mexico and U.S. Territories

The Purpose of this Blog

Disclaimer

Thursday, February 12, 2015

Trading S&P 500 Futures with Nadex 20-Minute Binary Options

By Joseph Banegas
Binary Trade Group

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 11:40am-12:00pm EST.

As the markets were ranging, especially the US 500 (S&P 500 Futures), I decided to look for an opportunity with the 20 minutes binaries. The /ES was brought in from 30m to 15m, 5min, and finally to 1 min.charts on my ThinkorSwim platform. The chart showed many signs of a decent uptrend.

MACD positive and rising
More advances than declines
Volume speed steady in an uptrend
S&P 500 Futures (ES trending sideways)

Let's take a look at this trade on my thinkorswim (TOS) platform: (February 12, 2015):

Click on Chart to Enlarge

With the decision made to BUY, the next step was to go to NADEX and place the trade. A 20-minute Binary was selected with a 12:00PM expiration at 11:41am.

Trade Details:
Contract: US 500 >2073.25 (12PM)
Expiration: Thu Feb 12 12:00:00 EST 2015
Direction: BUY
Quantity: 10
Price: $86.50

10 Contracts were bought, with a maximum risk of $865 and a maximum reward of $135. This is normally a little bit high for my personal taste, but the strike price of 2073.25 was so deep into the money that I felt justified in letting these contracts ride until expiration.

The market moved straight up and never threatened the strike price of 2073.25 before expiring in the money at 2077.75 at 12noon.

The contracts settled in the money at 12:00pm EST, yielding a gross profit of $135, less $18.00 in exchange fees for a net profit of $117.00 in less than 20 minutes.

Click Chart to Enlarge

About Joseph Banegas:

Joseph Banegas is an official trader and educator with The Binary Group (BTG). He trades mainly Binary Options using the NADEX exchange. Additionally, he makes LIVE Calls on opportunities for members of the BTG private Facebook group on a daily basis, along with other BTG instructors. BTG provides new and experienced traders with daily training sessions for trading Nadex Binary Options.training, and has helped so many in honing their trading skills.

More information about the Binary Trade Group:

Website: http://www.binarytradegroup.com

Free Nadex Education Reminder:

Thursday, Feb. 12 Advanced Trading Strategies (Part Two) 8pm-9pm CST Register Here
For the full schedule of free February Nadex webinars, click here.

Curious about Nadex? Open a Free, 2-Week Nadex Demo Account!
Nadex is available to legal residents of the United States, Canada, Mexico and U.S. Territories

Sean Jantz, Founder of the BTG Explains their Unique Approach for Trading Nadex