im currently on nadex and have found the cost of trading to breakeven a very hard challenge. trading nadex you buy a contract and pay $1.90 round trip on fees paid to nadex. then the contract itself has a bid/ask spread of usually 4-5 ticks. so, buying 1 contract would cost me $2 fees + $4 spread = $6 total for one contract. this is just a simple example but it shows me the cost of trading with nadex. if i end up with a trade of 10 ticks , i net $4?! $10 - $6 cost . am i right? so a day of just entering trades and watching the price action go up and down and then breaking even to get out and trading say 10 trades, i end up with a net loss of $60? theres something wrong here i think. these small trades happen everyday especially in choppy days. the net percentage of these costs eat up close to half if not more of the trades. im in demo and trying to make sense of this. is the assumption you are able to gain a huge amount of ticks to make money? small trades are common and big ones rare. you end up netting to $0 with both small and big tick trades. seems like a lot of work for a so-so return. wheres the problem in my analysis?
NADEX - same cost as trading with a broker?
Idelme125- I am guessing that you are trying to scalp with binaries… You are right about the fees (.90 cents a side), but you are only going to pay the BID/ASK if you get in and get right out. If the binary moves in your direction, after a distance you will be in profit.
My suggestion is to open a demo trade and watch the P&L on your trade. See how it reacts to moves up and moves down. Remember that the price will change depending upon time. Here “http://www.youtube.com/watch?v=K1OPs8qfM-0” is a video where Darrell talks about binary pricing.
I can tell you that I trade binaries, and I don’t worry about the BID/ASK. It becomes irrelevant if I am in a trade.
Hope this helps, Brad
You are not correct. Bid/ask is not a fee. It’s also not something the exchange receives.
As the member below posted bid ask is not a cost unless you get in and out immediately
if I buy at 10 and sell at 20 it doesn’t matter what the bid as spread is I made $10 (Less exchange fees
Fees on nadex are .90 a contract a side If it expires one there is no fee on exit/settlement Fees cap at $9.00 an order 10+ contracts (this is something you don’t get anywhere else…don’t lose sight of this awesome benefit. Yes it may not apply today but as you position size orders grow this is huge
the other issue is the false assumption the market does not move enough. Check deviation 1 deviation for a day there is more than enough room and ticks you don’t need 2 and 3 deviation days
There is something wrong here. It’s how your trading.
I believe based on conversations in tge c room etc is you are trying to scalp. And scalp really small at that. The issue on really small scalps (ie 1 point/10 ticks) is what you mention fees and bid ask spread will reduce profits by a large % as you are going for so little movement like 10 ticks on TF go euros etc…
ultimately this is a loosing strategy which I have tried repeatedly to get you to avoid.
I don’t care if your trading stocks, options for ex futures, binaries, or spreads your strategy won’t work do to the above. It’s not a Nadex thing it’s how all markets work. Don’t scale for such a small profit
I do scalp trades all the time but not for a $0 or $5 and rarely for a $10 profit. Most of them are $15 to $30 ( not hard to get) note this is net profit after bid ask spread not inclusive of fees
If your trading for such a small profit that bid ask spread and fees are an issue then the issue is the size of profit your going for
you should have seen bid ask and fees 10 20 30 years ago… This stuff is dirt cheap comparatively you have to fit the market it’s not going to fit you