Need Advice On My Current Trading Observations

#1

In my limited time with Nadex (and even less time with Apex), I have been profoundly profitable with my Demo Account but profoundly less profitable with my Live Account. I have several observations about my experiences:

1) One needs at least $1000 to start trading live on Nadex.

A large enough account is needed to weather the losses until one starts making profits. This is probably why many newcomers do better with Demo than Live.

Is this correct, or can anyone grow their account from as little as $100?

2) Demo Account is not the same as a Live Account.

The Demo Account is a valuable tool for learning the Nadex system and for trying out strategies. However, the profitable opportunities in a Demo Account are not available in a Live Account. In Demo, I’ve had FREQUENT “Once In A Lifetime” trade opportunities that have made me GIGANTIC profits. These fantastic opportunities are NEVER in my Live Account. I find this EXTREMELY misleading to new members in Demo who want to go Live.

Any thoughts on this?

3) I have done better with Binaries than Spreads.

I know, starting out with Binaries is NOT a good idea for new traders. I did the Spreads because that was the professional recommendation for new people, but the majority of my losses have come from Spreads. However, with me, binaries have worked. Although it’s a slower grind, my best wins have involved getting Binaries far above or below the current Indicative Market. I still believe in Spreads, but I have to state my experiences with them.

Is there anything wrong with this observation?

4) Iron Condors/Butterflies seem to be more profitable than Straddles/Strangles in the long term.

Although Iron Condors/Butterflies require higher upfront money that result in smaller profits (substantially smaller with Spreads) and potentially bigger losses, the overall profits from the Iron Condors/Butterflies are fairly consistent.

Although Straddles/Strangles require less upfront money and can potentially make substantial profits, I find that the profits that are earned frequently do not cover both sides (mainly with Spreads), which result in losses.

Are my observations here correct? Any way to improve both methods?

5) Strategies do not consistently work.

I’ll start using a strategy that will consistently work for me, and then that same strategy will start to fail.

Do we stay with a particular strategy that we master, or do we master multiple new strategies?

6) Profits are taken too early, or early profit opportunities are missed.

Sometimes, I’ll set up an early take profit order that is never reached, potentially causing a loss when the market moves in the opposite direction or providing a smaller profit at expiration.

Sometimes, out of fear that a market is moving too slow or will reverse, I’ll take an early profit, only to see a bigger profit would have been made, if I kept the contract longer.

When does one know to take an early profit?

What set number should be used in a take profit order for a Binary and a Spread?

Any advice on these observations will be helpful.

#2

Hi D58DEC53, I hope someone here in the community will address your post. I am very new and trading demo… not far along yet. When I open my live account it will be only 500.00, so I am very interested in what the experienced traders think. Disa

#3

My opinions…

  1. The more the better (Risk Management and your frame of mind: The 5% rule) Nadex requires $250 to open a new account now. It used to be $100.

  2. Yes, demo does has some anomalies some times. Don’t rely on those to tell you if you’re “getting” it or not

  3. Learn how and when to trade both. It sounds like you’re only taking deep in the money trades on binaries and, I would guess, losing on the spreads because of not knowing the right ones to pick or why.

  4. Again, there is a time for using all of those strategies.

  5. You’ll want to know multiple strategies. The tools and strategies are like the clubs and tools you carry in your golf bag. There is not a single club that can or should be used on every hit. Just as there isn’t a single strategy that can or should be used for every trade. It takes time and practice to know which tools and strategies to use when.

  6. You can look at this in two ways. First, any profit is good. Second, I could have made more. You have to get over the second one. We’re not trying squeeze every last penny out of a trade. Take what the market gives you. Some times it’s generous, some times not so generous, and some times it takes back. Trade to make good trades, not to make money. The money will come with good trades.

There is tons of information here. Start under the Elite Education menu item and pick a system that interests you. I prefer SEES or I Zone Sharpshooter (IZSS), but there are others depending on what you’re doing (I wouldn’t jump into the 5-minute binaries right off). Go over and over the videos and the setups. There is a lot of supplemental material in the forum, much of it made after the initial videos were put out that incorporates lessons learned and new insights. You’ll find a section for each system in the forum.

Look in the “You can do this and why you should” forum section and see what other people are doing, ask them questions if you don’t understand why they took a trade (whether they won or lost).

Post your marked up charts in the forum for feedback. You’ll learn a TON that way.

If you didn’t get a chance to watch it, this webinar by our own John Skelton, may help you figure some things out: Top Mistakes Binary Option Traders Make

Hope that helps. Don’t give up, and keep asking questions.

#4

Thank you so much for commenting. I do have some responses:

3) Learn how and when to trade both. It sounds like you’re only taking deep in the money trades on binaries and, I would guess, losing on the spreads because of not knowing the right ones to pick or why.

From what I’ve seen on the Apex videos, Straddles during News Events seem to be the solution, but they are not always profitable (not enough profit to cover the losing side). What are the right Spread contracts to pick, whether News Events or not?

By the way, last night I did the Japan 20 Minute Binaries with the method I previously mentioned. In 2 hours 20 minutes, I made profit, even with only one loss. Once again, a VERY SLOW GRIND that requires a lot of patience, but it worked for me, so far. However, I acknowledge that there has to be a better way.

4) Again, there is a time for using all of those strategies.

Same as #3.

6) You can look at this in two ways. First, any profit is good. Second, I could have made more. You have to get over the second one. We’re not trying squeeze every last penny out of a trade. Take what the market gives you. Some times it’s generous, some times not so generous, and some times it takes back. Trade to make good trades, not to make money. The money will come with good trades.

There is tons of information here. Start under the Elite Education menu item and pick a system that interests you. I prefer SEES or I Zone Sharpshooter (IZSS), but there are others depending on what you’re doing (I wouldn’t jump into the 5-minute binaries right off). Go over and over the videos and the setups. There is a lot of supplemental material in the forum, much of it made after the initial videos were put out that incorporates lessons learned and new insights. You’ll find a section for each system in the forum.

Without the Elite tools at Apex, can a proper take profit be determined? If so, how?

#5
  1. Follow the News Plans here: News Trading
    They outline what you should be trading when, they are free. If you scroll past the calendar there is more information about strategies. There is also an Iron Condor vs. Straddle calculator here: Iron Condor vs. Straddle Calculator that can help you figure out which one might work out better for you.

You will find that patients is the hardest part of trading, waiting for the setups, following the rules. The Range boxes and Expected Volume in the Apex toolkit will be particularly helpful if you’re doing ICs on spreads or Butterflies on the 20 minute binaries (or other time frames). Detailed explanations of how the indicators work can be found under S6 - Study - Apex Indicators section in the forum. If you’ve not watched it, this maybe helpful: Iron Butterfly Strategy with Stops There are many others on the topic of Iron Condors and Iron Butterflies, just search the forum.

  1. Yes, the ICs and IBs can win often, but again there are times to use them and times not to. There are many videos going over this, Just realize when you want to do premium collection and when you’re expecting a directional move. That will help determine which strategy to use.

  2. Depends on what you’re doing. If you’re following your system (whether Apex or not) it should tell you when to get in and out and you take the profits (or losses) when it tells you to. Usually $15 - $20 dollars on a binary is good. Many of our videos mention that. Can you make (or lose) more? Yes, but if you can consistently make the $15 - $20 dollars, then you can try for more, and you’ve got something to fall back on if things don’t go well at the higher levels. If you’re not using the Apex Binary and Spread scanner to pick and place your trades, you’re trading at a disadvantage. Especially for the strategies you seem to be leaning towards, and it’s free.

#6

Concerning the Calculator: I have to go review the training again. Apparently, I’m not copying the info correctly.

Concerning Iron Condors: I’ve previously viewed Iron Condor videos, but I’ll have to watch them again. The big problem I have is getting enough profit to do an IC. When I try, the profits are frequently low, like $2, $5, etc. How do I get an IC that will profit me at least $25, $30, etc., if I don’t see it listed? If you have a direct answer, please let me know. If you refer a video, where in the video is the answer. Unfortunately, when viewing long videos, I always either miss something or forget what I learned. By the way, doing the Binaries is not an issue. My issue is with Spreads.

Concerning Straddles: This is the big problem that I’m having. I have watched videos on Straddles, but I’m missing something. The profits made on one side do not cover the losses on the other side or profits are just low, and this is during an active market (not ranging). Again, if you have a direct answer, please let me know. If you refer a video, where in the video is the answer. Unfortunately, when viewing long videos, I always either miss something or forget what I learned.

Taking Binary Profits: As far as knowing when to take profits, I like the suggestion of $15 to $20 on Binaries. I have been doing $10 to $20, so you’ve confirmed what I’m doing is basically correct.

#7

D58DEC53,

If the Premium is not there, nothing you can do except look farther out for longer expiration. If still not there. Next. You can not manufacture Premium. It is a product of Volatility and time. Next.

Straddle. Been a long time. Again, you need big IV and Movement. Small IV usually will not work. Must have enough movement to cover losses along with Profits. Looking for that 1:1 ratio.

Binaries and TP.-Well, for me depends on what type of Binary I buy/sell. ATM, ITM and OTM are all are handled differently. Also when to take Profit. ATM I set a target such as $10-$25. I never want all of it with ATM. OTM-TP usually when the strike is hit. So depends on what your entry amount was. ITM-Often will use Price Ladder for TP. If ladder says to buy back a Sell contract with 5 showing on ladder. I will set TP slightly higher. Such as $5.50 or $5.25. You want to be filled before the other contracts are, Remember that the close of expiration moves quickly and the Black Out Period is coming.

#8

After months of training and testing different strategies in Demo, I recently went back to trading Live.

My Quick Summary: Trade around News Events. Set reasonable Take Profit Orders. Give enough time for Take Profit Orders to work. Binaries have been fairly successful. Spreads have not been fairly successful. Stick to what works.

An important method that I am following is my $20 Take Profit Orders on all contracts. So far, keeping it low has guaranteed continuous profits. Yes, it’s a SLOW grind, but I’m not losing any money.

Well, this is almost true.

I made one really STUPID mistake that took away half of what I earned. In one of my trades (using a Strangle with a $20 Take Profit), I was ahead in profit but not enough for the TP to kick in. Regardless, I decided to do a second Strangle near the current indicative. After I placed the second trade, I immediately had a feeling that it was a bad move, but I still kept it open in the hope that it would work. At closing, the first Strangle was, as always, profitable. However, the second Strangle (that I should not taken) was a loss. I lost a lot more on the second Strangle than the $20 profit I made on the first Strangle.

LESSONS: Don’t Get Greedy! Stick To What Works For You!

Concerning Straddles on Spreads, I apply the same $20 Take Profit strategy. However, this seems to work less often. Two Straddle examples are the Wednesday 10:30am Crude Oil news release and the various times for the 4:30am GBP news releases (11pm-7am timeframe). My $20 strategy Straddle on the Crude Oil works, for the most part. However, the 4:30 am GBP Straddle works less often, even with a low $20 strategy. It will settle where I’ll make like $5, and, with the Straddle price and fees, I actually lose a few dollars. It’s almost as if an Iron Condor would have been a better choice.

Any thoughts on my observations?

#9

Sounds like all the homework you have been doing is paying off. I especially like your decision to stick to a $20 TP goal for your trades. I took a very similar approach when I was trading Binaries and Spreads.

In response to your comments on straddles and spreads as they relate to the GBP news release (was always one of my favorite opportunities) One thing I have always found helpful was to look back at the previous releases and see how price reacted. I generally look for 1) The release results, 2) other releases that may have been scheduled simultaneously, 3) How far price moved to the high and how far price moved to the low in relation to price at the time I would have entered the trade (i.e. If entered at 11:00 pm and price moved up 30 pips and down 50 pips from the price at 11:00 pm) this will help you determine the probability the strikes available for the current trade opportunity has of hitting your TP target.

Darrell and his team do a great job at giving us trading opportunities with the news trades. That being said, I believe you should always enhance the information you are provided with by doing some additional research to increase your probability of success on these types of trades. This research will also help you decided whether a Binary strangle might be better suited than a Spread Straddle or if and Iron Condor is the best solution after all. I can’t promise you will win all of your trades, but the improvement to the way you analyze trades and decide which contracts are best suited for each trade opportunity will be noticeable for sure.

Nice post!

Peter

#10

Thanks for the compliment. With all of my observations, it should be clear that I really have been doing my homework.

The $20 TP came from trial and error. I was using bigger TP but it wasn’t always being reached. I used smaller TP but it was not very profitable. In addition, the goal of using smaller TP was to get profits on both sides of the Strangle/Straddle, but it wasn’t happening enough times to justify it. So, $20 was the final choice.

I have wondered how well I would do, if i was an Elite Member. From what I can tell, it would make things much easier. I could get the Trial Offer and see what happens. My goal is to make enough money (outside of this membership) to afford the membership. Actually, my goal is to make enough money to pay for it yearly, since I absolutely hate continuous monthly bills. (Too bad it didn’t happen before that recent One-Time Offer expiration.)

The GBP 4:30am Straddle was also one of my favorite trades. It was reliable, but it’s weird that it hasn’t been working for me recently. I’ll go ahead and start monitoring the aspects of this trade.

When I make enough money, I want to start doing the Condors and Butterflies. In Demo, they’re actually worked better than Straddles and Strangles, in many cases.

Thanks again.