Nadex Trade of the Day - An Exception to the 7am-9am Germany 30 (DAX) Trading Strategy.

Today was a day where the Nadex Germany 30 (DAX) strategy normally behaves beautifully, No high impact economic news to shock the markets, just smooth sailing. This strategy has very simple rules, but sometimes rules have exceptions. And today the exception to the rule came in to play.

Every morning, I trade the the 7am-9am Germany 30 (DAX) strategy with Nadex binary options. This strategy was based on the observation from a veteran trader who remarked that the 7am EST hourly candlestick of the Germany 30 (DAX) Index is a pivot point that determines the direction of that market for the next hour or so.

The rules for the strategy are remarkably simple:

• Select the 7am-9am EST Nadex time period for the Germany 30 (DAX) Index.
• If the 7am EST hourly candlestick is BULLISH, then BUY at the first Nadex strike price available BELOW the opening price of hourly candlestick.
• If the 7am EST hourly candlestick is BEARISH, then SELL at the first Nadex strike price available ABOVE the opening price of hourly candlestick.

This is a very simple strategy that is remarkably consistent. Just be patient and watch the 7am hourly candlestick develop. Once it's confirmed bullish, then buy. If it's confirmed bearish, then sell. If you want to be "super-safe", don't make a trading decision until 8am, after the 7am hourly candlestick has closed.

Click on Chart to Enlarge

7:00am - The market was on a downtrend going into the 7am-9am time frame. The 7am hourly candlestick of the Germany 30 (DAX) market opened at 10664.967, and started grinding upward be fore retracing in the back half of the hour. The 7am hourly candlestick closed bullish at 10831.833.

The following pending orders were placed once the 7am hourly candlestick was confirmed bullish.

1. BUY at >10656 (1 contract): Risk $50, Reward $50
2. BUY at >10636 (2 contracts) Risk $75, Reward $25

At 8:25, both orders filled. Now it was time for the market to retrace and move back upwards. It breached the 10656 level and the 10636 levels, threatening a double-loss before it finally climbed within the last 10 minutes of the trade. The first order lost $50, and the second order gained $50 for a $4.70 loss after exchange fees were deducted. Pretty much a slick.

For 2 consecutive days, this strategy failed if it was was followed exactly according to the rules in the beginning of this post. On Friday, the 8:30 US monthly Jobs reports narrowly lost the trade. But today it was an exception to the rule that required a closer look at the hourly charts:

Click on Chart to Enlarge

On the hourly chart, the 2nd candlestick at 3am was a huge bearish candlestick. Notice how the market always comes back to the T-Line (8EMA). At 6am, the market gapped down, and the 7am candlestick merely returned back to the T-Line. At 8am, the market continued on its downward path taking out the 10656 BUY order, but falling short of breaching the 10636 BUY order at expiration.

In hindsight, here's how I would have traded today differently

1. Knowing there was a possibility that the regular rules of this strategy would be trumped by the hourly downtrend, I would not have made the BUY order at 10656.
2. Instead, I would have placed a BUY order at 10636, risking $50 to make $50, and a back up BUY order at 10616, risking $80 to make $20 (x 3 Contracts)

If you strictly followed the rules of the 7am-9am Germany 30 (DAX) strategy, and BOUGHT the market at the first strike price BELOW the 7am opening price, then your trade would have been a loser. Be very careful trading into strong hourly downtrends.

Free Nadex Education Reminder:

• Monday, Feb. 9 Common Misconceptions with Nadex Spreads   6pm-7pm CST  Register Here
• For the full schedule of free February Nadex webinars, click here.

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To view a couple of high-probability Nadex trading strategies, click below:

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.

Managing Your Money with Nadex Binary Options

If you trade Nadex binary options, then you know exactly what your maximum risk and maximum reward is before you place your trade. You know that a trade can't run away from you and that you can't get "stopped-out" by market spikes as long as your trade is active.

When you trade with Nadex or any other financial instrument, you must balance money management, risk/reward, a proven trading strategy, and the right trading mindset in order to achieve consistency. In this blog post, a simple plan for money management will be discussed.

The 5 Percent (or less) Rule

Many new traders get excited about the possibilities of Nadex, but don't know how to properly fund their trading account. Here's a simple rule: Never risk more than 5 percent of your account balance at any given time. If you are entering a trade risking $50 to make $50, then your account balance should be $1,000 since $50 is 5 percent of that balance. If you routinely risk $80 to make $20 on much higher probability trades, then a $1,600 account balance is preferable. Here is why the 5 Percent Rule can be helpful for managing your Nadex trading account:

• Risking 5 percent (or less) of your account balance on a high probability trade will greatly improve your trading psychology. If you have 5 percent (or less) of your small trading account at risk, you can trade with better confidence. You have discovered and personally tested a strategy with better than a 70% probability of success. You know it's likely that 7 out of  10 of your trades will be successful. If you risk less than 5 percent of your account balance on a high probability trade, then you are in control of your emotions.
• Risking more than 5 percent of your account balance can negatively affect your trading psychology. If you have a $400 account balance and you place a trade risking $80 to make $20, then you have 20 percent of your account balance at risk for a 5 percent return. Even though it's a high probability trade, there is still a 20 percent chance that the trade will expire out of the money. So you hunch forward, babysit the trade and you are quick to exit if the trade looks like it's turning against you. You feel emotionally drained even if your trade expires in the money. If you placed the same trade with a $1,600 account balance, it's likely that you would be in a relaxed mindset making the trade.
• If you don't have the funds to meet the 5 percent rule, then practice in demo and make gradual deposits into your account until it is adequately funded. The first couple of months trading Nadex should be heavily devoted to research and education. If you have just funded your Nadex account with $100, it might be a good idea to invest in self-education and test a high probability strategy in demo at least 40 times. For a checklist on how to do this, click here. In the meantime, if you have decided that your strategy requires $50 risk per trade, then you may want to raise another $900 before you start trading live. If your chosen strategy requires an $80 per contract risk, then try to raise more money.

Trading is an emotional business. and money management is critical to trading consistency. Even the best trading strategies will lose from time to time, and disciplined traders know how to accept losses. They know that their trading strategy is solid and their winning trades will far outweigh their losers. They never expose their accounts to unnecessary risks, and they can easily weather short-term setbacks. And the key elements to trading that they share in common are:

• They have learned how to manage money on every trade
• They have a proven high probability trading strategy that they can do in their sleep
• They know how to manage risk/reward vs. probability of success
• Their accounts are adequately funded to deploy their strategy

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.

"When Markets Attack" - Free E-Book with 15 Trading Strategies from the Pros

A Great Way to Plan for 2015 Trading Success!

If you have been thinking about trading stocks, options, futures, Forex or Nadex, this new, free E-Book from TradingPub book delivers 15 easy-to-follow and proven strategies for trading each of these markets.

Whether you have no trading account, a small account ($500 - $1,000) or a larger account ($25,000+) you will find strategies with high probabilities of success geared toward your personality and trading style. You will find strategies for trading new accounts, or inside your IRA or 401k plans. If you've never traded before, but you you want to learn a little more about trading, this is a great book to satisfy your curiosity.

Click Here for your free copy of this book.

Each of the 15 Strategies in this 240-page E-Book is divided into three sections:

• The Game Plan - Brief introduction to the trading instrument (stocks, for example), along with a full written example of the trading strategy, complete with illustrations, charts and examples.
• The Movie - If you like what you've read, you can click on a one-hour webinar from the original presenter of the strategy. You will get a first-hand account of how this strategy works with more examples of the strategy in play.
• The Offer - If you are really excited about a strategy, you can follow the presenter, and subscribe to their services or purchase their products at discounted prices.

When I signed on to work with TradingPub in June 2014, I had not traded the markets in over 10 years. I was immediately immersed in free, top-quality trading education from the best teachers in the industry. My responsibilities included booking presenters for multi-speaker events. As I sat in on each of the webinars, I realized that I was privileged to be absorbing so much information from great educators. So we kicked around the idea of writing a book, and I was assigned to do the writing.

Writing "When Markets Attack" was no small task. We had to flesh out 15 strategies for stocks, futures, options, forex and Nadex. Then I put on my headphones and transcribed the entire webinar, editing the content afterwards to make sure the chapter was written in layman's terminology and had good flow. It took almost three months to complete the project. Afterwards, the creative staff at TradingPub did a great job of proofreading and formatting the content, and produced a first-class E-Book.

Our goal in writing this book was for readers to walk away with at least three trading strategies they can use tomorrow, and the book is loaded with very interesting observations from veteran traders. Here are some examples:

• How to control your emotions and become a relaxed, mindful trader.
• The British Pound usually establishes its low or high of the day between 2am-5am EDT. The opposite high or low reveals itself between  8am-2pm EDT.  This happens the great majority of the time.
• The 7am hourly bar in the German DAX market is a pivot point usually sets the direction of the market for the following hour.
• How to risk $156 to make $1,000 trading 30-year bond futures.
• How to retire on $13,000 per month in 5 years, tax-free

The response to this book has wildly surpassed our expectations, and TradingPub has been flooded with testimonials. Here's one we received recently:

"You HAVE to know this...

Y'all have compiled the MOST USEFUL and CONCISE INFO I have ever seen on trading correctly.

This doc encapsulates ALL that I "look at and do" (successfully these days) and a number of things I had not realized (well, yet, anyway!) Incredible!!!

INTERSTELLAR AWESOME is the only phrase i could use to describe!

Many MANY MANY thanks!

My Kindest Regards!"

Okay, enough already. If you are interested in building extra income or retirement savings, then this book is for you. Enjoy reading it and have a great holiday season!

Cam White

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.

Developing the Mindset of a Successful Trader

By Cam White
Note: Please make sure to read the Disclaimer at the bottom of this blog

Why is it that some traders are successful, while so many others fail? What are the personality traits of traders who consistently make money and what are the habits of traders who constantly struggle? As my journey back into the markets continues, it is becoming more apparent to me what separates successful traders from those who consistently blow out their accounts.

A key part of becoming a successful trader is having the humility to be patient, invest in education and to become a student of the markets. Over the past 6 weeks, I have registered for over two dozen free webinars hosted by TradingPub. The speakers on these webinars cover a multitude of topics on trading the markets, and they all have different trading plans. But the one thing they all have in common is that they made plenty of trading mistakes before they learned how to become consistently successful.

Getting your mind and body prepared for success is a key component to successful trading. Benjamin Lee, founder of Think Trade Think,  kicked off a marathon 16-hour Trade-A-Thon hosted by TradingPub with an excellent presentation which spelled out the most common trading mistakes and why they happen. He talked about the personality traits of struggling traders versus winning traders. If you are new to trading the markets or if you're struggling, this presentation is worth its weight in gold.

When I sat through this presentation, Benjamin clearly pointed out some of the rookie mistakes that I am making, like overtrading and getting out of trades too early. The presentation also provided a road map for psychologically becoming a better trader.

Successful traders have a sense of calm and confidence about them.They have a defined trading plan and time-tested rules that they follow. They don't trade with great frequency, but they know a good trade when they see it. Unsuccessful traders are nervous wrecks who throw money at the markets, over-trade, revenge trade, act on"hot tips" and bleed out their accounts.

The more I immerse myself in education, the more relaxed and confident I am becoming as a newbie trader. New concepts are tested conservatively in simulation, and trading logs are being kept, charting successes and failures, profit and loss, and risk/reward analysis. If a strategy plays out well in test, then it is deployed into my live trading plan.

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.