I have been been checking the forum for a while even though I am new on apex. I haven been studying forex market for couple of months. My question as a beginner is: are there better risk reward markets than Forex? I have a small account of 2 thousand dollars and I would appreciate any advice on which market would be the best to grow small accounts besides binaries.
I’m curious to hear the real answer too, Clowbel. I am another trader-in-training (with a smaller account than yours!) and I’m looking to see which side of the pool to put my feet in. It seems to me that with the mini and micro lots available on the major FX pairs that the risk/reward is scaled down somewhat, making it more manageable from the stewardship side of the equation. The same thing could apply for some of the mini futures. I’ll wait, though, until the successful traders weigh in on this before I make my move!
Thanks for posting a great question!
CLOWBEL and jazzguitar, the concern is that you do not risk more than 1% of your account on a trade. Using the APEX systems the risk for a trade depends on the trade setup. For a small account it is easier to trade the Forex markets with the mini or micro lot sizes. The Forex markets usually tic much slower and the trades last longer than they usually do with the indices like NQ, TF, YM, ES. Yesterday I took a GBP/USD trade that yielded 60 pips in about 3 hours YM gave Lori 60 ticks in less than 1 hour Lori’s Daily- 4/28/16- 60 ticks on YM in less than 1 hour! 1 YM Futures contract ticks at $5 and the stop loss is usually about 20 ticks so using Darrell’s recommended rick management of 6 losing trades in a row - 5% of capital account you would need $12,000 capital account to trade 1 futures contract (20 tick stop x 6 trades per day x $5 tick value x 20 trading days per month = $12,000) Please see Darrell’s posts in this thread… Risk Management and Your Frame Of Mind The 5% Rule
The option I would recommend is trading NADEX Spreads. You can trade them on the major Forex pairs, Indices and Commodities. The above discussed YM trade could be done with NADEX Spreads. Each YM Nadex spread (that is in close proximity) ticks at $1 per tick. With a capital account of $2,400 you could make the above mentioned trades and not have risked more than 1% of your account. You could have done the same for the Forex trade I did using NADEX spreads. Both trades would have yielded about the same profit for the same risk but the Forex trade took 3 hours and the YM took less than 1 hour. Please see this course for trading NADEX spreads http://apexinvesting.net/trading-nadex-spreads-with-izss-course/
Shortcreeker, thanks for the clarifications and comparisons. You just made my decision very easy. Looks like I’ll be a NADEX spreader for a while. After your answer, it (spread trades) just makes all the right sense.
Thank you very much for this helpful answer!! Now I know where to go like “Jazzguitar” said.
Hello. I am new to binary options and have been trading for less than three years in forex. After reading this post, is it safe to assume that if I start my live nadex account with the minimum 100 dollars, it will be in my best interest to do spreads instead of binary? I have practiced with the speads option (for about an hour); and if feels so much like forex trading; something that I am not particularly fond of. Any insights and suggestions would be greatly appreciated!
MRSTBLEFX - Welcome!
To answer one question… Despite them having more of a learning curve at first, spreads are definitely the more recommended way to trade. Dont get me wrong, binaries have their place, however with proper risk management, spreads are tons safer because they arent all or nothing like binaries. Or even worse, you lose it all because the underlying market finished 1 tick/pip away from your strike price.
While spreads can be traded directionally (like forex). You arent limited to just that. If you think the market will be range bound, you can collect the premium from the spreads in what is known as an iron condor. If you think the market will shoot in one direction but arent sure which way, you can take advantage of that too, in what is called a straddle.
A lot of times, the Iron Condors and Straddles are done around news events. http://apexinvesting.net/news-trading/ At the bottom of the page is a video showing you how to set things up.
Actually I should have linked this page first, this page will teach you everything about the basics of spreads you need to know. Make sure you check this one out first before the other link, as this will be more helpful in your overall understanding of trading spreads http://apexinvesting.net/nadex-spreads-101-course/
As for the other question regarding the amount needed for an account… While Nadex only requires $100 to open an account. You will be so limited in what you can trade. Best to start with at least $500. Think Apex actually recommends at least $1000.
With the 1k amount, not only do you have more options… you will be practicing better risk management. With only a $100 account, just 1 or 2 losses will quickly drain your account.
While seeing profits is great… you will quickly realize that knowing your risk beforehand and being able to manage it is even more important, and in the long run will make you a better trader.
Always make sure you demo anything before trying it live. As this will help as well.
And ask questions!! There are tons of very knowledge people on this forum who will be happy to help and quite of few of them make a nice living just off the Apex systems.
Hope this help cleared some things up for you.