Warning this reply is long. If you're serious about trading take the time and read all of it. I took the time to write it so you and others could learn. Don't be dismissive or scan it by really quick, read it and think about it. (I did this on my phone so please pardon the typos)
You are trading with a lot of false assumptions. This is completely normal for any new trader. Many of your statements are simply due to a normal misunderstanding of how options in general work. The things you mention are not unique to Nadex spreads they are how all options work. The good news is, you're in the right place and we can help you. Yes, we get reports nearly every day from traders that are profiting but it does require some education and a valid trading system executed properly with good risk management and good profit management. Meaning, I get occasional stories of traders who are not doing well. I would like to point out these are traders I don't hear from often if ever, they almost always admit to risking too much money, and not having the system down before they went live due to either their greed or need to make money now. The market has a knack for sniffing out greed and need (meaning, I have to make it now so I'm going to go live so I can learn faster fallacy) and ensuring those trading under either pressure, most undoubtedly lose.
Market makers do not desire for you to lose. They are neutral they desire to make the bid ask spread.
Read this article to see how the market makers actually help you:
Note: this is concerning market makers on an actual exchange like Nadex. On international binaries they are trading against you and do desire for the majority of traders to lose.
Traders often forget they can be on either side of the trade. This is not unique to market makers. Ie a low risk spread is a high risk spread for the other side, the market maker is taking on this risk until they unload the other side of the contract. But you also can be the one collecting the premium (where the market has to move far to be profitable).
The only edge a market maker (there are several of them) on Nadex has is the bid ask spread. They even have to pay fees and don't get the 10 contract cap like we do. They make bid ask spreads due to the risk they HAVE to take on as they have to make a market on all the spreads at once, even the ones that are low risk to you and high risk to them.
By knowing proximity you can know where the spread will really speed up.
I have videos on this usually concerning iron condors.
Two of my recent articles address each side of these and I cover them almost every day on my show.
You can also trade the At The Money (ATM) spreads. Using the spread scanner helps you easily find these. They don't have to move far to be profitable. Also the bid ask spreads are perfectly in line with how options are made often better than normal vanilla call or put options (not referencing binaries regarding a comparison). The bid ask spreads are getting tighter as more traders and more market makers come onto the exchange. Regarding bid ask spread on binaries they are nothing compared to the $20 and $30 bid ask spread on international binaries. I know they say they don't have one (basically because on most of them you can't exit before expiration). But in fact, they do as if you put up 100 you can only make 70 maybe 80 on the trade in most cases. This means you are down 20 or 30 (bid/ask spread) the second you enter, if the trade is profitable. Consider the fact that you pay no bid ask spread if you enter a Nadex binary and hold it to expiration (though I don't recommend this in most cases.) Either way the bid ask is small in comparison. Again, market makers make this to help give them time to hedge off their risk by taking the trade and help offset some of their risk.
Reference the links provided by raceturtle to learn how to use the scanner and also to find my series from April on Nadex spreads made easy, common misconceptions about spreads, and how to find the best spread in order to help you clear up many of the errors you are making due to misconceptions on spreads.
You mention a variety of strategies but give no examples. A strategy is nothing more than buy or sell or do both etc. A system is how you define rules for entry and exit. And after that you must scan to choose the right contract.
The strikes are not based on support or resistance levels. They are a set width all the time. There are a set number of them all the time. Ie 5 ticks wide 9 strikes on every usd/jpy binary. The middle of the 9 strikes is determined at approximately where the price of the binary is 10 minutes before the binaries or spreads etc start trading. On uj that means it will be set 10 minutes before with the middle one being where the price is 10 minutes before the binary starts to trade. 4 will be above and 4 will be below. Each 5 pips between them. This is covered under my education Nadex binaries series. Also in my Nadex binaries made easy, common misconceptions, and picking the best binary, webinars from last month.
Nadex sets the strikes they do NOT create the market. Market makers and other traders create the market and they are perfectly priced.
The binaries are perfectly priced. A price ladder binary is essentially delta of a call option with the same strike and expiration and Nadex binaries line up perfectly.
I've covered this on a variety of webinars and radio shows.
You mention the payouts are lousy on a trade that has any probability of profiting but this is not accurate. Unless you are either picking a deep itm binary or a binary itm with very little time to move due to expiration being close and even then it is fairly priced. The price is reflective of probability of expiring in the money. For example if I bought a $70 risk binary, that means if I did this 100x and held to expiration then 30 trades should lose $70 for total loss of -$2100 and 70 trades should make $30 for total win of $2100 .....$70 + $30 equalling $100. I have tested this and it is spot on. What this means is they are fairly priced for both the buyer and the seller. Whatever side you choose. This also brings to light that this is based on expiring In The Money (ITM) not entering and exiting before expiration. Proving the FACT that you should not expect to be long term profitable (due to fees should you decide to always hold to expiration but rather you MUST close before expiration).
You must ask if a trade is Out Of Money (OTM) should it not have less risk and more profit if the trade has to move to be profitable and expire itm. Should a trade not have a lower payout and higher risk if it is itm therefore being able to move against you some remain flat or move in your direction? This is only fair to both sides of the transaction.
Also you can limit this risk making the payout more than reasonable by exiting before expiration. For instance buying a 70 binary exiting at 95 to make 25 and exiting say at 45 (if the underlying market where to hit the strike as it will always have a mid price of 50 (say at 47 x 53 bid x ask) giving you approximately a 1 to 1 on a 75% probability of expiring itm trade.
Consider how an international bucket shop binary broker pays out 70% maybe 80%. (And those who start out at 80% or higher do this to attract clients and shortly there after lower their payouts.)
This is done primarily on atm binaries (binary strike is auto set to where the marker is as time of entry). Meaning it's a 50/50 trade (not really even 50/50 as most have a push rule on a tie. So you have a 1/1 trade where you don't get close to a 1 to 1 payout.
So you must win 10 out of 17 to be just break even on a 50/50 trade with a 70% payout on a $100 risk
On a $80 payout this would mean you have to win 10 out of 18.
Even accounting for bid/ask spread and fees on Nadex an atm spread held to expiration is approximately 10 out of 19
So, if you have a system that profits a majority of the time say just 54% of the time or higher you can make a profit. And this is if you held to expiration which you must do on most binaries on most international brokers. With the ability to close before expiration you can lock in profits keeping a winner from becoming a loser or limiting your loss.
Plus on Nadex you can trade itm trades to increase probabilities at any time or trade otm binaries to increase your profitability at any time by as much as 2495% profit including fees. Something not possible on any international binary broker I know of (at least not with entry at any time and the ability to exit early). Obviously these have a low probability but I do them occasionally around certain events usually in layers or on magnet price trades.
Regarding regulation, this is huge! this is not just a formality. It is not simply a matter of bash offshore and praise nadex because nadex is regulated. And I have done them live on signals and the radio making $1000s of dollars on a single trade. I'm not saying they always workout but with such a high profit they don't have to work out that often to be net profitable.
You will not have an issue with drawing money from nadex as a direct member or even with fcms as now the contracts are now classified the funds are now completely segregated and all trades are collateralized. Also, a creditor says nadex could never pursue these funds as they are segregated and classified in such a way that they are in no way considered company assets. I have 100 of stories from traders that lost all or part of their funds with multiple international binary brokers due to not being able to withdraw them several are posted in this forum and these stories most often happen to those who are doing well ranging from $100's of dollar to 10's of $1,000 of dollars. I hear this time and time again nearly every week.
The settlement is fairly calculated. An average, not a last trade that can be easily manipulated.
The settlement is based on an actual contract like es not a index with gaps like spx.
They don't play with the expiration time like the cftc has warned that many international binary firms have.
You don't have to worry about identity theft like the cftc has found has happened with some international binary brokers.
You can exit before expiration on ALL contracts.
Your money is fully segregated and both sides are fully collateralized (no Ponzi stuff like what has happened at several international brokers)
Although many binary "bucket shops" do not have regulation, there are several types of regulation. The question is what does "real" regulation, versus just being registered, mean. Registration is being signed up with an organization such as the Better Business Bureau that has no power to enforce penalties, seize assets or prosecute for violation of its own Rules and Regulations. It can post nasty messages or send you a fine letter, but in the end, it doesn't have any real power to protect you, the consumer, beyond a bulletin board of warnings.
Real regulation means there is a regulator with the power to impose and enforce fines and punishments for violations of regulations, in order to protect the trading members. The CFTC is the Commodity Future Trading Commission. It oversees the CME/Nymex/Comex and also NADEX. Nadex is the North American Derivatives Exchange. It offers binary options and is regulated by a real regulator. It is the only retail-focused CFTC Regulated binary exchange in the United States offering binaries on US and International Indices, Forex, and Commodities.
The CFTC clearly states that the North American Derivatives Exchange is a regulated, designated contract market for offering binary options.
Regarding some tips on systems check out profit poppers, momentum scalps, expiration premium collection and trend trading premium collection, and boomerangs.
A few tips are, learn the rules and follow them, but also learn why the rules exist. Why should the trade work so you know when not to enter a trade. Practice in demo first it may seem like a waste of time bit live is an expensive teacher to learn many of these lessons on and to learn how to properly execute a system and pick the right binary. So many traders are shortsighted wanting to make a fortune today without looking at the reality of wanting to be able to be trading a year from now. Let your year goal be your guide not today's financial needs you will be much better off.
Also you mentioned trades that win more often than they lose. Though I agree this is important, and more desirable, don't lose sight of the FACT that risk and profit management is much more powerful than probability. Ideally you balance out the two.
If you win 9 out of 10 but only make a $1 when you win and lose $10 when you lose you lose money. Likewise, if you lose 9 out of 10 but only lose $1 when you lose but make $10 when you win you are profitable. Lose say 7 out of 10 but lose $10 when you lose and make $100 when you win and you are very profitable. Win 7 out of 10 but lose 15 when you lose and win 10 when you win and you are still profitable. So you have to get the balance right.
Ok that's a lot to soak in I hope it helps