[quote=superherobyday]So instead of placing 5 random trades, and ****ing away that money, why not back test? You literally have thousands of days of data at your disposal. All you have to do is look at the daily range of the US session, and see how many closed within the $90 itm range. Or you could make it even easier and google some stats on the average daily range of various sessions (autochartist is good). I can promise you, once you get into a 3 or 4 figure sample size, you’ll realize that the people at Nadex are not idiots or liars. The world will make sense again, and your dream of becoming a millionaire by randomly placing $10 otm trades will die a quick and painless death.
Cheers[/quote]
I STAND CORRECTED
I’ve spent the morning comparing expected movements/average ranges/ etc of various pairs to the strike prices of various binaries on Nadex. It seems DRAMATICALLY in the favor of OTM options. For instance, at the moment I’m looking at GBP/JPY. Here are the stats for the next 3 hours (12pm-3pm). (stats are from autochartist).
Current Price of GBP/JPY: 180.43 Average Pip/Hour Movement: 35-37 PER HOUR (up to 45 per hour) Expected Range for 3 hour period: 180.93-181.68 (74 pip window) Current Strikes on Nadex 181.00 (43 pips away) $10sell/$95 Buy 181.20 (23 pips away) $25sell/$80 Buy 181.80 (37 pips away) $10 Buy/$95 sell
In other words, Nadex is advertising an 80% probability that the pair will not move a ‘distance’ that is even less than the average, and a 95% percent probability that it will not move an amount that is just a skosh above average.
Seems…skewed.
Everything I’ve looked at this morning presents a similar case. And really, if you draw lines of the $95 ITM strikes on any pair, on any time frame, they just look silly. They look like they should be the $60 ITM strikes. Same for the extreme OTMs. Instead of the $10 OTM lines looking like lottery tickets, they look very reachable. What am I missing?