From 1st day of using Nadex demo Issue with oil per trying to trade a binary contract was the following: 1) It closes at 2:30 pm NYT whereas you can trade electronic future contract til 4 pm without issues. 2) Charts and service I use for CL are in June, oil was quoted in May 3) Seemed to still take a late order then it closed on me fast. 4) I do like that they allow you $ 25,000 to trade, and I am currently testing 5 and 10 contracts. Thoughts: Oil seems to close to early and trade to quickly to use nadex for afternoon trades, but may be fine to put trade in before the day starts. Issues with US 500 which I assume corresponds to es futures or S&P 500 Index per trying to trade a spread 1) Currently using es June charts, tried to buy spread of around 1097 on 1096 - 1097 today, not sure what the difference is between daily and intraday. 2) Market chopped around and never went up after I entered order, issue is for es future if price did not move, you would not get stopped out, but seems on nadex if price does not move in your favor you will lose money. 3) Issue, not sure if price reflects cash value of S&P 500 or es value which is usually 2 - 3 points lower than cash. 4) Not sure on spreads, how you get paid exactly. Currently putting in order for April 13, 2010 June 1190 - 1230 spread as buy limit which I assume means I expect price to go up. I set price at 1194 for 5 contracts. Its says Max Profit possible is $ 1,800 and Max Loss is $ 200 with current loss of - $30 on order status. I assume if price goes to or below 1190 by end of day on Tue I will lose the $ 200, but not sure what happens if say price is at 1210, if I will make money but not the total of $ 1,800 unless i goes above 1230. Issues with US 500 which I assume corresponds to es futures or S&P 500 Index per trying to trade a binary 1) Currently putting in sell limit price for June 1186 expiring on April 13 for 5 contracts with price at $ 69.00. Max possible gain is $ 345 and Max loss is $ 135. I assume that means market price must close below 1186 by end of day on Tue for me to make the money or else if not I get the max possible loss unless I trade out of position. It shows current loss as $ 30. Thoughts: It seems that $ 30 is what you are charged to just put on a trade, for example, I assume if I were to kill these trades I would be down around $ 60 - $ 120 per trade depending if I get charged double for closing an order before it reaches expiration. Currently down $ 1,200 for my tests on demo. Things that I do like is that if you want to put in an overnight trade I believe you have a hard stop which is your max loss similar to buying a call or put option on the SPY but this does also allow it to be done on oil, currency, indexes, and commodities, so you are not going to get killed by being on the wrong side of a report. I also think I may like the spreads if it ends up you can make more money than you can lose assuming you don't have to hit above the upper channel by the end of the day to get paid off and will get paid off if it is just above the price you bought the spread at, hopefully someone can clarify this issue. Things that I don't like, is it really looks like you don't want to use this to trade oil during the afternoon, and you don't want to trade Index 500 near the end of the day or if there is chop. Looks like if you want to trade during the day, you really want a trend day or a strong reversal after market gets oversold or overbought. Also, there is really no averaging down or up on a trade, its basically you win or you loss. Also, even if you trade out of your position, you will take a loss whereas if say price goes back to where you bought at on es futures, you can kill it for just a small commission charge not $ 30 or more.
I will answer some of ur issues later, I am about to eat dinner, but I can tell you one thing. If you are doing 10 lots the maxium commission you will pay is a total of 14 dollars on the round turn, 7 bucks a side not 30. The 30 showing in the p/l column is the p/l for the position. Demo doesnt take into account commissions. Plus once you get going chop days also offer you a quickl way in and out, but you need to figure out the best option with the best strike. Oil is good in the afternoon, but yes it closes when the exchange closes not the electronic market. But oil opens back up tonight at 6pm and trades all the way through till 230. Also if you need I can tell you about how you will get paid on the spreads. Hope its a better day for ya tomorrow but thanks for updating us all with your honest description.
Yes, please explain how I get paid on the spreads. It was a fine day for me since I made $ 100 real money scalping oil in cl futures and only lost demo money on this platform while I am learning to use it. Thanks in advance.
i have been trading binaries with iG since 2003. things were easy in the early days, ig used to misprice them all the time, you could make money with little sweat. much much harder these days.. still there are opportunities if you are patient but you still have to get in ahead of the crowd. ig have a pricing model they use to make the market, but they also use orderflow to adjust pricing..
Ok first off on any product with a spread there are 4 ranges, the first one is the biggest which basically encompasses the lowest and highest range of the other 3. It is called the master spread. Now the master spread will be priced on the bid and offer basically in line with the product it is derived from. Then there are 3 other ranges each with a ceiling and floor. These are tighter ranges and they are spread a specific amount apart, if you look at the website under contract specifics it will tell you how far apart the ranges are spread. They are always spread the same apart but the prices of the ranges are priced at 6pm when they open up each day. So lets take an example using the EUR/USD right now. The first range or master spread is always 600 pips wide. Todays range which opened up at 6pm tonight is 1.3300-1.3900 Then there are 3 other ranges and those ranges are always 300 pips wide. So we have 13300-1.3600 , 1.3450-1.3750, and 1.3600-1.3900. The bid and ask on the biggest range is perfectly in line with spot 1.3583/1.3585 right now. The others depending on if its in the range or outside the range or close to one side of the floor or ceiling will be different then the actual price of spot, but thats the way they are priced, its not that its way out of whack its the part that gives you the limited risk. If the price of the spot is in the middle of the range it will be priced at where spot is. So lets look at the last range 1.3600-1.3900. The spot is at 1.3583. So we know the market is actually below the floor of the 1.3600-1.3900 range. Say we think it will rise and come into the range. We can buy that range on the offer at 1.3624 so we are long at that price. Now we are not inside the range yet. But the most we can lose is to the floor of the range which is 1.3600 , we cannot lose below that range no matter if the price drops 200 pips or whatever. We lose from the price we bought it at to the floor which is 24 pips. Say now we have lots of time left till expiration tomorrow and the price starts rising and just hits 1.3600 even. So we are at the range but not inside it yet. We can still make money on it, the price of the bid offer on the range we bought might move up 10 pips or so, not point for point yet becuase it just hit the range. Once it gets in the range it moves point for point. So now lets say we have our buy at 1.3624 and we will look at several scenarios. First what if spot closes at 1.3520 well it closed out side the range by 80 pips. So out floor was 1.3600 and our buy was at 1.3624 so at the end of the day it will be only a 24 pip loser. Our buy price 1.3624 minus the floor 1.3600=24 loser. Thats only if it closes there at somepoint if it came into the range it would move point for point and we could have gotten out for profit. But lets say this past didnt and we lost 24 pips. The next scenario is if it closes at 1.3700 even. So at the end of the day we are 100 pips above the range we bought at which is 1.3600, but the actual price we bought at was 1.3624, so we take 1.3700 or 100 pips( the amount above the floor) and minus it from our buy price 1.3624 which would give you a 76 pip profit in your account. Again this is letting it expire. If we are at 1.3700 earlier on in the day, and the market hits 1.3700 we can actually make more then the 76 pips becuase kind of like an option we have the intrinsic value plus some nice time value left in the day. The next scenario is if it expires at 1.3624 even which is 24 pips over the floor but it is also the same price you bought at which would break you even on the trade. Last one , if it expires at 1.3610 , even though it expired 10 pips in the range you bought it at 1.3624 , 24 pips above the range you lose 14 pips. Just remember thats only at expiry but these are tradable and you can get out for more then intrinsic value when you factor in time. I like to look at these and take all factors into account when I trade it, also when things are way above a ceiling you can short a ceiling below you with very limited risk if you think it might come down into the range. This way small risk and big profit potential, i generally try to get out and do not hold till expiration. Becuase these spreads are not 0-100 like binaries they are close to actually trading the product, the master spreads are exactly like trading the futures. The other 3 spreads kind of give you a trading like feature with option mentality to be able to get into a trade for limited risk and if you buy u can use the floor as a stop loss on the trade and if you short you can set it up where the ceiling is a stop loss on the trade and then you have all day if your comfortable with the risk to give it a chance to come into the range. Or they can be utilized to trade or straddle news, like buy a floor out of the money and shorting a ceiling out of the money before big news which gives you real limited risk on either side in hopes of a big move. So there are some unique ways to utilize these in trading. But for actual scalping I would say no. But I was a scalper, but learned the little things that work with the spreads that make it much easier for me to trade. I hope that helps and didnt confuse you at all, if any other questions you can always pm me if you would like, I would be more then happy to help out. It took me a bit in the begining, and I shunned these at first but when I started to see where it could help it was good, I was also a big fader of news, and spikes and usually would get hammered, but this helps to alleviate the risk and has pretty good potential gains. There are plenty of times in actual trading where I was stopped out and it came abck eventually. But with the spreads the stop price your comfortable with is at expiration , becuase these can go way out of the money but your only losing the ceiling or floor and you were already comfrotable with that. Then a few hours later they can come back down in the range and you make money, which doesnt happen when your actually trading becuase you would have been stopped for aloss. I try to do spreads at a price where I would have the same dollar amount stop in futures, this way now I am comfortable with the stop and now I have the time to wait it out if I am wrong.
Just found this thread. Thank you for your generous sharing, rsikit. I have been trading futures and am getting sick of being stopped out, only to be right a few minutes later. Each stop out erodes resolve, and the market is good at making you give up right before the move happens. Or, when you do finally 'get on the train' (after several stop outs) you may cut your winner short, just to lock in a BE day. That's a losers game. You must trade to win, not to break even! I started thinking of using options. I have a proven, technical edge, if I could just stop the nail biting, and the worrying, and being 'ticked out' of all those good trades. I thought I could move away from day trading ES futures and start to swing trade FX options. I opened a demo account at Alpari FX and found vanilla options on FX are extremely expensive, esp. if you like DITM, as I do. One contract could be as much as $6000. ATM on EUR/USD was around $1500 at 24% volatility. As CCR so eloquently put it: "It ain't me." After that wake up call, I haven't even bothered looking into options on futures - I can't imagine they would be any better, and they would probably have horrible spreads. I was just about to give up on the options idea when I came across Nadex while surfing. The idea is so great. But does it work? I entered "Nadex Review" and got this thread. Recently I moved away from ES to trade Crude Oil, and love the way the market moves. A great day on ES would be $500 on two contracts. On CL a great day would be $1000-$1500 on one contract! The market definitely trends way better than stocks, and probably even better than FX intra-day (my observation period has only been a few weeks). I would like to try either the Nadex binary or spread on CL. Lately, the market has been suggesting 50 to 100 cents between my entry, and where I want to take profit. As soon as I get my signal to enter my trade, my idea is to buy/sell an OTM Nadex CL range as cheap as possible (sounds like it may be any where from $6 to $30 depending) and see if the market goes my way. If and when I hit my technical exit, I have no interest in taking any heat on the trade - I just want out. Hopefully the binary or spread will post an immodest gain. I'm hoping the binary will be near $100 and the spread up close to the number of ticks CL has moved. If I'm wrong, worst case scenario I lose the the $6 to $30/contract. I have some concerns: On CL, the 'narrow markets' are $5 wide!!! It seems there is little to no chance that there will be a range I will be able to 'get into'. E.g. if I want to go long at 103.25, looking for 104, but the market starts at 105, I'm just not sure how this will all price out. I will have to play with binaries vs spreads, to see which is better. It has been 1 year since you last posted on this topic, Rsikit. Are you still with Nadex? Do you have any news to share? Have you noticed spreads/liquidity improving? I look forward to your reply, or replies from others who have real experience trading on this exchange. Gratefully, fastcar
I just found out today that the SEC, CTFC and the Attorney General of the U.S. have already established that it is illegal for American citizens to trade with unregulated offshore options organizations and it's also illegal to give and receive cash bonuses. The authorities have been investigating and have already charged some in this matter... but what most don't know is that if you were not aware that this was a crime... you may still be charged with a whole slew of federal charges, from wire fraud to money laundering to using the USPS for the commitment of a federal crime and other charges. This is because in the U.S., ignorance of the law doesn't exonerate you from the crime. Beware... watch this and other warnings on "You Tube". (You Tube no longer accepts videos offering bonuses).