Don't be a sucker like me! Wait for the market makers!


#1

Today I want to share one of my mistakes in the hopes that it NEVER happens to any of you!

On 03/14/16 just after 6PM EST, Nadex re opened and one of their market makers was late. As a result for several minutes there was no bid or offer size (No contracts in the book on either side). In my haste and not paying attention, an offer popped up and I failed to notice that offer was 100 pips below the market indicative. Another trader became the market maker and filled my sell 100 pips below the actual market! When the market makers appeared and filled the books I was instantly -$100 in the hole! talk about a bid/offer spread, LOL!

Eventually to my shock I realized what had happened and was faced with two options. Get out of my trade and immediately take the loss, or stay in the trade and hope I recoup my losses or get some capital back. I decided to exit and review the trade and see what the charts looks like and see if the 100 pip target was reasonable. After reassessing my target I was able to get back in at a better price and go for it again. Fortunately for me I did hit my 100 pip target and made my money back! Moral of the story, NADEX is not perfect and you need to wait and double check the bid and offer and make sure the prices are within a decent proximity to the underlying AND that there are active bid size and offer size. Otherwise some other lucky trader can make an instant sucker out of you like me today. If you are not sure as to what I am talking about, make sure to ask questions and find out more details.

Okay, PSA is over.

Have a good one!

-Christopher