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About the Kellie's FAQs From New Apex Traders category
WEST9585
#2
Hello, I am new to trading nadex spreads I know they trade using the indicative index and not dollar amounts. But is their a way to know how much the indicative index number is in dollars. For example if I want to set my worst price field to $15 dollars but would have to use the indicative integer to do this. Thanks.
DIRTHEADROCK
#3
With spreads, the indicative is basically the dollar amount. If your Forex pair is formatted like the USD/JPY, you can see very clearly that the indicative is basically equal to the dollar amount if you ignore the decimal point. So, if you bought a USD/JPY spread at 112.97 with a floor of 112.80, your risk is $17 (112.97-112.80=0.17=$17). So, if you wanted to be sure you were out of the trade when you hit $15, you’d set your Stop Trigger to 112.97-0.15=112.82. Other Forex pairs can be a little less intuitive, but they’re all basically the same in principal. For example, take the EUR/USD pair. Let’s say you bought a EUR/USD spread at 1.0976, with a floor of 1.0760. Your risk is $216 (1.0976-1.0760=0.0216=$216). So, if you wanted to be sure you got out at $15, you’d set your Stop Trigger at 1.0775. Keep in mind though, that while you’d still have $15, you would’ve lost $201! If you mean you only wanted to risk $15, then you’d set your stop at 1.0976-0.0015=1.0961.
In a nutshell, no matter where the decimal point is, 1 tick = 1 dollar. From there you can calculate your positions accordingly.