Hi guys,
I saw a video on youtube from apex talking about how its possible to set up a high probability trade meaning if market stays within a certain range you will win regardless of direction by opening a buy and sell trade. Video made it sound like it seems to good to be true, if I were to look into doing this for GBP/USD for example, would the range be something as small as 10 pips? If so then that strategy is very flawed as daily range is over 100 pips.
HOWEVER… if the trade only has to stay within 100 pip range then it sounds amazing and you would only lose if there was some major news or something. Can anyone shed some light on this please?
Thanks
I have also found another post on a forum about nadex trading
I have been going through the videos. Very interesting what you can do with these spreads. You can hedge them and straddle them at the same time creating your own box spread so that you have a low risk and high reward trade if you can not find the right risk reward in a single spread. Like corn at one range of price of 790-810 and another spread at 800-820 with neither giving you a risk reward over 1-1 or even less . If current buy price on the top tier is 810.2 and Sell price on the lower tier 808.2 than you can do something we just cannot do in spot forex in the US. Hedge. But not only hedge create your own spread box with the risk just being the difference between 810.2 and 808.2 which is 2.0 or 20 ticks or 20 dollars in this case. So now you have a low risk trade where before you could not come up with a trade that was even greater than 1-1.
So now I am not going to go into the math because watching the video would be simpler but if the position moves down even though you thought it would be a bullish move your profit potential is 80 dollars. If it moves up like you think it should the profit potential is 80 dollars and the risk is just 20 dollars. The only way you lose this 20 dollars is if the trade just does not go any where and stays in the pocket you might say of risk. You have reduced your risk and can now win going both directions as long as the trade moves but that is always a possible outcome.
What is that strategy called above? How can I learn more about it? Is this possible to do on oil seeing as how volatile it is?
First strategy I believe you are talking about is called an Iron Condor.
Basically used when you think the market will move as little as possible, or move in one direction and then reverse.
A lot of time you will see them recommended for News Trades.
There are many different time frames that you can trade. Taking the GBP/USD for example. You can do 2 hour, (5 hour/8 hour - depending on time of day) 6-11pm, 11pm-7am and 7am-3pm or you can do one that lasts all day 6pm - 3pm.
Obviously the daily ones will have more profit potential, but a 10pm-12am one cold have potentially say $10 on each wing (possible $20 profit)
With a big news event, often times there will be even more potential profit than normal.
Not really sure about the second strategy. I believe it is called a Box spread but Im not really familiar with them. Sorry.
Here are a couple of links that will take you to videos explaining both Spreads in general and the Iron Condor
http://apexinvesting.net/nadex-spreads-101-course/
http://apexinvesting.net/news-trading/ ( the videos on this page are at the bottom of the page)
[https://forum.apexinvesting.com/t/monday-nadex-webinars-08-01-2016-how-to-trade-news-events/8480] (https://forum.apexinvesting.com/t/monday-nadex-webinars-08-01-2016-how-to-trade-news-events/8480)
(and a recent webinar that Apex did for Nadex earlier in the week, that covers Iron Condors as well
