The Inquisitive Trader

Friday, February 13, 2015

Nadex Early Evening Trade with the EUR/JPY

Reminder: The Nadex Exchange will be closed Monday, February 16 in observance of President's Day

This can be a great Nadex trading strategy, especially if your work schedule doesn't permit you to trade during the regular work day. It comes courtesy of Krystal Comber, founder of SlickTrade.net. She has been testing and trading this strategy for months with great consistency.

I tried this trade last night, but last minute nerves got the best of me and I bailed. If I had trusted the odds of success, I would have won, but instead, I cut my losses.

Almost every night, the EUR/JPY behaves quite predictably, and if you can draw support and resistance lines, it can greatly enhance trading consistency.

The rules for trading the EUR/JPY during the Asian session are quite simple:

Select the EUR/JPY currency pair with the 11pm expiry.
At 8:00pm EST, draw horizontal lines at the highest price (resistance) and the lowest price (support) between 6-pm-8pm on the hourly chart for the EUR/JPY.
Switch over to 15 or 30 minute charts.
Check to make sure there isn't any economic news occurring on the EUR or JPY from 8pm – 11pm EST.
For a SELL – After 8pm, if the price breaks through the low price level – Choose a SELL on the closest strike price at or above the support line. You can place a market order if you want your order filled immediately, or you can place a working/limit order if you want to adjust your risk/reward. If you want an additional margin of safety, you can place a working order at the next strike price up the strike price ladder and hope that the market comes back to fill your order.
For a BUY – After 8pm EST, if the price breaks through the high price level – Choose a BUY on the closest strike price available at or below the resistance line. You can place a market order if you want your order filled immediately, or you can place a working/limit order if you want to adjust your risk/reward. If you want an additional margin of safety, you can place a working order at the next strike price down the strike price ladder and hope that the market comes back to fill your order.
That’s it! Price is normally tested heavily between 9pm – 10pm EST –You may wish to walk away during this point and come back around 10pm -10:15pm EST.
Always pay attention to the trend direction and news. If the market is sideways and staying within the high and low range you may want to avoid taking the trade. This is why I like to watch the Keltner Channels and Fisher Transform on ThinkorSwim (TOS) or the EMAs and Ichimoku cloud on the Nadex charts.

Let's take a look at last night's trade (February 12, 2015):

Click Chart to Enlarge

6:00pm - 8:00pm EST: The EUR/JPY established a HIGH at 135.85 and a LOW at 135.56. Support and resistance lines were drawn at these levels.

8:00pm - 11pm EST: The EUR/JPY broke through the support line at 8:25pm, triggering a SELL at 135.60, which was the closest strike price above the support. The following pending order was placed at 8:33pm:

Trade Details:
Contract: EUR/JPY >135.60 (11PM)
Expiration: Thu Feb 12 23:00:00 EST 2015
Direction: SELL
Quantity: 1
Price: 50.00

1 contract was sold, with a maximum risk of $50 and a maximum reward of $50.

The market chopped sideways for almost the entire session, and the trade was looking good. At 10pm, the market started to challenge the 135.60 strike price, but I remained patient. At 10:35, the market blew through my SELL strike price and kept heading upward. With 11 minutes left in the trade, I was convinced the market would not retrace. Indicators were bullish, and I decided to exit the trade for a $33 loss. And then it happened. BOOM! The market nose-dived without warning. My trade would have expired in the money and I could have let my contract expire in the money for a full profit.

I like this strategy, and I need to learn to trust it. To accomplish that, my next 20 trades on this strategy will be done in demo. I'm going to establish some hard rules and collect data. In the meantime, I will publish progress reports from my testing, including wins & losses, and a profit plan.

About Krystal Comber:

Krystal is the founder of SlickTrade.net SlickTrade provides live trading rooms, signals and setups for Nadex, IG Group and Forex traders. Krystal provides the following services:

Video tutorials for trading with Nadex
Winning strategies with detailed instructions
ThinkorSwim (TOS) workspace setups and indicators
Live trade signals
A private Facebook group and chat group
A personalized online trading journal that helps you track your trading activity
Live support

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

For a Complete Explanation of the EUR/JPY Asian Session 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.

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

The Purpose of this Blog

Disclaimer

Tuesday, February 10, 2015

Trading the EUR/JPY Asian Session with Nadex

By Krystal Comber, Founder
SlickTrade.net

If you like to trade, but your schedule doesn't permit you to trade during the daytime, here's a strategy you can execute after dinner and take profit before bed time.

Almost every night, the EUR/JPY behaves quite predictably, and if you can draw support and resistance lines, it can greatly enhance trading consistency.

The rules for trading the EUR/JPY during the Asian session are quite simple:

Select the EUR/JPY currency pair with the 11pm expiry.
At 8:00pm EST, draw horizontal lines at the highest price (resistance) and the lowest price (support) between 6-pm-8pm on the hourly chart for the EUR/JPY.
Switch over to 15 or 30 minute charts.
Check to make sure there isn't any economic news occurring on the EUR or JPY from 8pm – 11pm EST.
For a SELL – After 8pm, if the price breaks through the low price level – Choose a SELL on the closest strike price at or above the support line. You can place a market order if you want your order filled immediately, or you can place a working/limit order if you want to adjust your risk/reward.
For a BUY – After 8pm EST, if the price breaks through the high price level – Choose a BUY on the closest strike price available at or below the resistance line. You can place a market order if you want your order filled immediately, or you can place a working/limit order if you want to adjust your risk/reward.
That’s it! Price is normally tested heavily between 9pm – 10pm EST –You may wish to walk away during this point and come back around 10pm -10:15pm EST.
Always pay attention to the trend direction and news. If the market is sideways and staying within the high and low range you may want to avoid taking the trade. This is why I like to watch the Keltner Channels and Fisher Transform on ThinkorSwim (TOS) or the EMAs and Ichimoku cloud on the Nadex charts.

Let's take a look at last night's trade (February 9, 2015):

Click on Chart to Enlarge

6:00pm - 8:00pm EST: The EUR/JPY established a HIGH at 134.443 and a LOW at 134.243. Support and resistance lines were drawn at these levels.

8:00pm - 11pm EST: The EUR/JPY broke through the support line at 8:00pm, triggering a SELL at 134.40, which was the closest strike price to the upper resistance line. The following pending order was placed at 8:06pm:

Trade Details:
Contract: EUR/JPY >134.40 (11PM)
Expiration: Mon Feb 09 23:00:00 EST 2015
Direction: SELL
Quantity: 10
Price: 35.00

10 Contracts were sold, with a maximum risk of $650 and a maximum reward of $350.

The market continued moving downward until 9:00, where it ground back up to the mid-range between the support and resistance lines. From there it chopped sideways until expiration. This trade was briefly challenged by a bullish candlestick at 10:20pm, before it sold off and expired in the money.

The contracts settled in the money at 11:00pm EST, yielding a gross profit of $350, less $18.00 in exchange fees for a net profit of $332.00.

About Krystal Comber:

Krystal is the founder of SlickTrade.net SlickTrade provides live trading rooms, signals and setups for Nadex, IG Group and Forex traders. Krystal provides the following services:

Video tutorials for trading with Nadex
Winning strategies with detailed instructions
ThinkorSwim (TOS) workspace setups and indicators
Live trade signals
A private Facebook group and chat group
A personalized online trading journal that helps you track your trading activity
Live support

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

For a Complete Explanation of the EUR/JPY Asian Session Click Below

The Purpose of this Blog

Disclaimer

Monday, February 9, 2015

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.

BUY at >10656 (1 contract): Risk $50, Reward $50
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

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.
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.

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

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

The Purpose of this Blog

Disclaimer

Friday, February 6, 2015

Nadex Trade of the Day - Trading into the US Jobs News (February 6. 2015)

On the first Friday of every month at 8:30am EST, the US Jobs reports are released, including nonfarm payrolls and the unemployment rate. It is very risky trading into these reports and unless you have a really good strategy for trading into the news, it's probably a wise decision to sit on the sidelines.

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.

Here are the rules for the strategy:

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.

With the pending US Jobs reports due at 8:30, extreme caution trading this strategy was warranted.

Click on Nadex Chart to Enlarge

7:00am - The market had been chopping sideways going into the 7am-9am time frame. The 7am hourly candlestick of the Germany 30 (DAX) market opened at 10833.667, and started grinding upward be fore retracing in the back half of the hour. The 7am hourly candlestick closed slightly bearish at 10831.833. Almost a Doji. Under my trading rules for the strategy, that triggers a SELL at the first strike price ABOVE the 7am opening price. But I was nervous about the looming 8:30 economic news reports. The following pending orders were placed:

SELL at >10849 (1 contract): Risk $50, Reward $50
SELL at >10869 (3 contracts) Risk $79, Reward $81

Courtesy of Investing.com. Click to Enlarge

Now it was time to wait for the economic news reports. All of the reports came in bullish, with the exception of the unemployment report (Jan), which slipped from 5.6% to 5.7%.
The market spiked bullish at 8:30, filling both pending orders. Then it pulled back. Notice the huge wicks on the 8:30 candlestick on the 5-minute chart. At 8:35, the market spiked very bullish, blowing past the SELL order at 10849 .

At 8:45, it appeared obvious that the 10849 SELL order was not going to expire in the money, so the trade exited early for a $29.50 loss. The SELL order at 10869 was breached briefly, but then the market retraced and expired at 10855.467, settling in the money for the 10869 sell order.

The result of these two trades netted a small net profit of $28.10 after exchange fees were deducted. The 10869 sell order was essentially an insurance policy if the 10849 sell order failed.

In hindsight, I have a few thoughts about trading into the monthly US Jobs reports:

For maximum safety, don't trade into this the monthly US Jobs reports, or any other high impact economic news reports.
If you do trade, wait for the reports to be released. In today's example, placing a BUY order at 10829 after 8:30 would have been much safer.
If you follow the rules of this strategy, jump one level up the price ladder if you are trading into the news, instead of selling from the first strike price above the 7am open.

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

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.

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

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