What did I do wrong?

#1

I bought AUD/JPY >93.20 (11PM) at 9:50EST, for $40 tonight (Sunday). Looked on NT7 and used Diagnostic Deviations Levels and saw that settlement was 93.23 and 93.31 so I figured that the binary would be true so I got in at 40 and set profit target to 96. Obviously, it went the other way, I didn’t get out at my stop (which of set for $20) and I eventually got out at $4.00 for a loss of $36.

2013-12-29_2322 - stsmith927’s library

What did I do wrong? I know about not executing my stop. I was thinking it would come back and it didn’t. But was this one of those things where I just picked the wrong direction and there just wasn’t enough volatility at night to move the market? Did I get in too early? Was there a better chart setup that would’ve helped me? The strategy wasn’t EPC, it was just trying to make money with the trend.

#2

I just thought about one of the things that I could’ve done had I limited my losses. I could sold the $40 bought binary back at say $25, and then turned around and sold the binary at $25 and bought it back at $5, and actually made $5 on the 2 trades.

#3

Traded a otm contract during a normally low.volatility time. Jpy has a bank holiday tomorrow and us closed now.

Risking $40…set take profit at 80 not 96

If risking 40 there is no reason to exit at 4.00. Your down 90% (aka pot commited) you have much more to gain than lose. Also you paid a .90 fee to exit vs no fee if it expires otm.

For chart setup you need to be trading a system vs just opinion. You don’t just want to pick direction Ie vspike deviation level system I teach etc. Note I take many more trades doing trend trading premium collection trades than epcs. This is looking to make money w the trend and using time in my favor. With otm you have to be right about a specific distance in a certain direction within a certain amount of time. The same trade as premium collection could have profited and been wrong about all three.

#4

Thanks for the feedback. I think I understand what you’re saying. In football terms, instead of playing offense and trying to throw the otm binary ball down the field to score, score with the itm binary ball and play defense to run out the clock.

Found the video on tread trading premium collection and will study that. Thanks!

#5

That would be one way of putting it. Also could look at it as running the ball and short passes versus a bunch of hail mary plays.

#6

two questions: 1. Does the price of the ‘underlying’ have any effect on the binary at expiration ? I had a loss on one trade where the option trade well below the strike and still lost on the trade. 2. Does the “max loss” on the order ticket mean anything? Can it change by expiration? Sorry, three questions.

#7

I am newer at this also but I would like to take a stab as your second question. I’m sure more experienced folks can chime in on your first question.

Max loss is your risk, or the most that you can lose on the trade at expiration. The great thing about binaries, unlike regular options where your loss could be theoritically infinite, is that losses on binaries are capped. This also means profits on binaries are capped as each binary is worth at most $100 at expiration if they are profitable.

So for example, if you buy (blue ‘Offer’ column on the Nadex platform) a binary say at $40, then that is your risk/max loss, meaning the most you could lose on that trade at expiration is $40 and the most you could make is $60 (100-40).

I italicize at at expiration because you do not have to wait until expiration to get out of a trade. You can get in and out of trades before expiration. So therefore, you can’t lose less than the ‘max loss’ on the ticket. Again, max loss indicates the most you can lose at expiration if the trade is not profitable.

In regards to your first question, the binary is either profitable or unprofitable at expiration based on the Nadex indicative price/settlement price. That price is derived from the underlying. And that is where I stop.

Hey…maybe I’m learning something from all these videos afterall!:cool: Why do I keep hearing DM’s voice in my head!? “Welcome to the Nadex webinar series…” :wink:

#8

Smith that was an awesome summary on binaries - nice!!!

Regarding 1st one - the settlement is what matters at expiration not the underlying. Same for stocks, forex, futures etc… all options work thsi way the settlement.

This gets rid of eroneous quotes… 1 tick at last second etc… it uses an average. Watch this video for more:

2 Max loss on ticket is max loss IF ENTERING - it means nothing when putting in a exit order ignore it for an exit order as it is always basing its calculation as if it was an entry order

3 - Max loss is max loss it can’t be greater than that loss - you can exit early and make it less but in no circumstance will it ever be more.

#9

Thank you, RT

#10

Hi badbob, I’m not really sure what Nadex message you received. Was it on the platform or was it an e-mail? I was in the US tech 100 trade also today. I’m not really sure what column you were looking at on the Nadex platform, because if you bought at 55 and 57, there is no way you could have a profit of $77 (see my explanation of binaries above regarding risk and max profit/loss). At 55 and 57, max profit would be $45 and $43 (100- 57; 100-43).

I would review the binary basics videos on how to work the platform to make sure you’re looking at the right area and continue to practice using the free Nadex demo account. I think that’s probably better than me trying to explain it here as a picture is worth 1000 words and video is worth a million!

I will also advise you to go through the p3 tutorials as the signals are really designed to be ‘set it and forget it’, and will teach you how to set a ‘take profit’ order to get out of the trade automatically one your order is filled. So you don’t have to worry about a manual sell ticket later on.

Hope this helps!

#11

Thanks. I have watched the mentioned tutorials.

#12

Thanks for reply.

#13

badboy what where the trades you did specifically what does your trade history say was sent and was filled? on 1/8? THE NQ trade was

1/8/2014 Core Strike:

BUY $57 or less US Tech 100 (Mar) >3560 (4:15PM) Reply Delete Favorite 11:00 AM - 8 Jan 14

filled shortly thereafter

Core trade reached $96 profit target Collapse Reply Delete Favorite 4:10 PM - 8 Jan 14 ? Details

In addition NQ expired > 3560 at 4:15 so whether held or took profit you made money

To lose on this trade you either chose a different strike, different expiration, or went the opposite direction

i would need to see y our submitted/filled trades on NQ for 11/8 to know

There was one trade - you mean you did 2 contracts?

Sorry will totally help you here but need the details - may be best to hop in the p3 chat room (not the pit but the p3 chat room) and ask there live

#14

Thanks for reply. RT

#15

why do you think they expired for zero - copy and paste your fill ticket and your settlement ticket that where emailed to you

#16

darrell, I really appreciate your help. I’ve requested that information from Nadex. So far they haven’t given me an ything, but I’m working on it. I know you’re busy, so I’ll take this a different direction. I’m sure glad it was only “play” money. I do appreciate you reply.

Bob

#17

You don’t have to request it from nadex. They email it directly to you. Check your emails if you bought it for 57 and held it to expiration you got the same email.

Also under order history in the platform you can see entries and exits (not settlements)

Under my account you can pull the position history entries/exits/settlements etc.

The important thing is find out what misunderstanding you have error made on trade so I can help you so you don’t repeat it.

I promise you there is a simple misunderstanding and we simply need to find it so you don’t have to make it again :slight_smile:

Why do you think the contract settled at 0. Did you do the same strike, the same expiration for Jan 8th? (ie not 12 PM expiration etc…but 4:15 PM ET)

You should have two emails from [email protected]

The Entry Will Have the Subject: Your Order has been executed: BUY US Tech 100 (Mar) >3560 (4:15PM) The Settlement if Held Will Have The Subject: Your Position has settled for US Tech 100 (Mar) >3560 (4:15PM)

Here is the email they sent as of the expiration of the contract:

Your position in the US Tech 100 (Mar) >3560 (4:15PM) contract was settled on Wed Jan 08 16:15:44 EST 2014. The details of your settled position are shown below for your reference:

Settlement Details: Contract: US Tech 100 (Mar) >3560 (4:15PM) Quantity: 10 Expiration Value: 3564.533 Payout Amount: $1000

Your positions and account balance have been updated accordingly.

#18

Thanks much. Bob

#19

Bob,

I really have yet to understand what the issue is. I guarantee you at this point it is 1 simple misunderstanding by you.

The forum is “what did i do wrong” i need your confirmation emails to know what you did wrong.

But to clear up that misunderstanding just provide me with a simple copy of the confirmed order email they sent you when you got filled and the settlement ticket they sent you when you it settled.

Copy and paste it right here an we should be able to clear this up easy. Ive asked 4x and i can help you but you have yet to provide it.

This information is what is lacking to accurately solve your misunderstanding. You state how far Nadex will go for a pittance… yet you have yet to explain and show the ticket confirmations so it can be cleared up. Simply copy paste 2x.

Then we solve it… could have resolved days ago… Don’t konw why you keep avoiding copying and pasting a simple confirmation and settlement email? Bottom line you did something different than the above and what show emails will confirm what it was.

Trading is not as easy as we want to be or as hard as we make it. But if your giving up over a misunderstanding of how a product works or will not provide the needed information to help resolve that. Its going to be a long tough road for you.

I am here to help… “Help me help you” :slight_smile:

Darrell

#20

Thanks again for all the help. Bob