Nadex Trading these days

#1

Ever since Nadex got sold to crypto.com, I have been noticing quite a few differences in the platform. It looks like the liquidity providers have disappeared from the broker. The spreads (difference between the bid and ask) has increased dramatically (from 1-2 pips to 7 pips in most cases, from 3-4 pips to 25+ pips in other cases). This has made trading on Nadex almost impossible as it is very difficult to overcome the large spread.

Anyone else see the same? Anything else you see in the platform recently that you’d like to bring up for discussion here? Also, I dont find any good forum/community where Nadex trading is discussed, can anyone point me in the right direction. It seems very lonely out there on the platform when you dont have any one else to bounce ideas and issues off of. Thanks.

#2

To answer your first question from my testing thread, I think this forum is seeing less activity these days because most people seem to get their questions answered in the Elite Room and the Skype Rooms now.

As for Nadex, admittedly I don’t trade there as much as in the past, so I can’t speak too much on the situation lately. But from what I’ve seen, it doesn’t seem too different from years ago. I don’t recall the ranges you mention being that uncommon. It always depended on the market and timeframe you’re looking at. For example, 5 minute binaries are always going to have unfavorable spreads because of the nature of that kind of instrument. The market maker is taking more risk in such a lower timeframe. Also, some markets are just going to be more popular in general, and others will depend on the time of day. (This is why some forex pairs are only available during certain hours.)

Also, I don’t know what it’s been in the years since, but as late as 2017 it was reported that just two market makers accounted for 99% of order flow on Nadex. So it’s not like there was a large number before and it only just got way smaller after the acquisition.

Nadex did announce last year that they amended their Market Maker Agreement, and that they will continue the market maker program through 2023.

Nadex popularity

All that being said, yes Nadex does appear to have gotten less popular. My personal guess is that has almost everything to do with two things: the introduction of micro e-mini contracts, and the rise of funding companies. The latter have become quite popular in recent years, and that doesn’t seem to show any signs of slowing. Even Apex started one about 15 months ago.

I think the major appeal of Nadex was always low (financial) barrier to entry. But with the advent of micro contracts (1/10th the size of e-minis) in 2019, the market immediately became way more accessible. This was only furthered when more and more funding companies started to spring up, giving traders the ability to essentially trade significant size for only a nominal subscription fee.

With the opportunity to trade actual forex and futures (instead of a derivative instrument like the binaries, spreads, and touch-bracket knockouts you find on Nadex), I think the choice was pretty obvious for most people. As great as it was when knockouts finally got introduced in late 2018—after micro contracts and funding companies came into the picture, it just no longer made sense to bother with the indirect nature of the Nadex kind of products, now that you could trade the markets directly for little upfront cost.

I’m sure there’s plenty of usage on Nadex for hedging purposes, but I doubt many retail traders are using it as their main platform anymore, for the reason mentioned above.

Nadex discussion

Recognizing it’s just not as popular anymore, it will be difficult to find much of a community focused on trading it. I would start on Reddit (particularly the official Nadex subreddit) and ask around there. If anyone knows of places where people discuss the platform, you’d probably find them there.

#3

I started out with Nadex before trading futures, and I have to say that I was quite happy. Unfortunately, Nadex has gone downhill over the last several years for several reasons. I’ll just list some of them.

1 Nadex Demo and Nadex Live are so ridiculously mismatched. You do your simulation training on Demo, and you do absolutely fantastic. With your confidence up, you move to Live. Unfortunately, you find out that the trading opportunities you had in Demo are just not there in Live. You still take a trade, figuring it’s all about the training, and you LOSE. It is almost a bait and switch tactic.

2 They are constantly changing the Strike Distances, and, frankly, it is to disadvantage traders. Just go to the Nadex Notices section, and you’ll see the changes that are made.

3 Some markets have less trading time opportunities. For example, the Asian markets, like Japan, had a variety of trading times, from 20 Minutes to 2 hours to Daily. Now, only the Daily is listed. Also, some of the Forex trading time opportunities have been increased from every 4 hours to every 8 hours.

4 There is no longer any viable training with Nadex. A major part of my previous success with Nadex was the training provided by Apex. Unfortunately, Apex no longer provides updated training. Even on the Nadex website, there are not as many trainers available as previously listed. That is a bad sign that these expert Nadex trainers are no longer associated with them (John Skelton of Apex was one of those recurring trainers). Nadex doesn’t even have curent webinars scheduled. Again, this is a bad sign.

5 A big problem with Nadex is their absolute and complete REFUSAL to provide some type of trailing or stop loss. Nadex always gives the “risk is known upfront” speech, but we want the option to limit our risk even further. Apex has its Apex Scanner that allows us to trade Nadex almost like we trade Futures. Yet, Nadex did not adopt this wonderful tool for their platform.

You would think, with the advent of Micros and Funded Accounts, that Nadex would change with the times. The ability to trail or have a stop loss, pay more per trade, or have an associated funded account would elevate Nadex. Of course, doing the beneficial thing is not the Nadex way.

I don’t want to give the impression that I hate Nadex. There are some benefits, particularly for trading newcomers and Straddle/Strangle/Hedging fans. On occasion, I may still take trades on Nadex, but I don’t see it as viable long term as it previously was.

You won’t find much Nadex discussions here. Ironically, there are Apex members who still trade Nadex. So, if there are more posts on Nadex, then there may be more Nadex responders.