First of all, I have big issues with the performance (or lack thereof) of the Nadex platform. Second, the risk-to-reward ratio of an in-the-money 5-minute binary option is roughly $80 to $20, which is absolutely horrible from a professional standpoint and breaks just about every commonsense principle of risk management in existence. An individual might argue that the risk involved is, in reality, quite small, because the statistical odds of executing a winning trade is virtually 100%. Nonetheless, the SIZE of risk-to-reward is unquestionably 4:1. An at-the-money trade has a significantly better risk-to-reward ratio, about $60 to $40, or 3:2, but the probability of success then drops from nearly 100% to what? I’m not sure. I haven’t done the research and am honestly not at all curious to find out. Presently (after having finally perfected my system to my satisfaction last month) I am on an extremely tight budget, so my plan is to take $100 (all that I am currently willing to lose at this point in time) and parlay it into thousands of dollars by the end of this year. If I attempt doing this via Nadex, should I happen to be wrong with my initial purchase in the live account—as remote as that possibility might be—it would almost wipe me out, blowing up my plan by leaving me with just twenty bucks, not enough on which to operate. If I attempt my plan via OANDA, it will require many, many more transactions. But fortunately, during the next month I will have the luxury of trading full time. Since my success rate should continue to be nearly 100%, if I am willing to grind it out (which I am) I can still, theoretically, reap a bumper crop of a harvest over time, thereby winning the war via a steady succession of minor victories. Moreover, in a month or two I am likely to be able to add a couple of hundred bucks to my OANDA account (God willing) thereby increasing the power of my activity by a factor of three, making it that much easier to attain exponential growth by compounding my day-to-day gains. (My plan is to continue to trade full time at that point, working my day job at night until I am finally “independently wealthy.”) My little romp with Nadex was quite worthwhile in that it helped my sharpen my system to what might very well be nearly flawless perfection. But now that it's time to get serious, I need to exercise wisdom, which I believe dictates I leave Nadex's extremely unfavorable pre-established bid-offer configurations behind and opt instead for the much more levelheaded buy-sell situations available with traditional brokers.
It's probably worth you doing a bit of reading on the concept of risk adjusted return. You're essentially reinventing the wheel here. Spoiler alert - the idea that the risk to reward ratio is inextricably linked to your probability of success is a well thought-out concept with a vast body of research supporting it. No offense intended, but you're at the level of the smart 8th grader who is starting to figure out that the concept of calculus exists but doesn't yet quite have the words for it nor have they actually derived it yet. Certainly they could devote a few years deriving it themselves from scratch with a lot of frustration and dead ends, or they could take a 6 month calc 1 course and save that brain power for other questions that haven't been researched and answered yet. Take a couple of finance MOOCs, they're free and most are really good, and save that brainpower for figuring out something truly novel in finance!
Thanks for the advice. Too bad I'm so lazy. If I were struggling to find a way to profit from trading, I'd probably look into the well thought out concept of how the risk-to-reward ratio is inextricably linked to my probability of success and the vast body of research supporting it. But given that I seem to be trading profitably in all my ignorance, once again, I find myself lacking the curiosity to find out.
I'm lazy too, unfortunately winning the genetic intelligence lottery allows one to get away with that. But think of it this way, you've currently got the mindset of trading a couple hundred dollars. You've probably got the intellect to be thinking about trading at the least in the tens of thousands of dollars. If nothing else I'm pushing you to realize your potential, which I think is relatively higher than you're currently aiming.
The Nadex platform has frozen $1,480.00 of my demo account since last Friday, supposedly as funds reserved for my Working Orders—even though I have no Working Orders—just another example of why I opted to return to OANDA this week for live trading rather than going with Nadex. Nonetheless, I have continued to trade the Nadex demo account just for the fun of it, possibly to see if I can double the initial $25,000 opening balance Nadex started me off with less than a year ago. (Presently I’m at about a 47% annual ROI.)
Here, instead of noting the correct time, the Nadex platform is displaying some kind of "NaN:NaN:NaN AM (ET)" nonsense. For what reason? I know not.
NaN is software error code for "not a number". They're trying to feed a non-numeric value into a function that's expecting a number. Sloppy for sure, but I've observed several similar type issues over the past couple years. Definitely don't try to trade with them in a fast market, their system rejects your orders because it can't handle any kind of volume.
Last week I entered profit territory in my OANDA trading account and was anticipating the beginning of a steady advance towards my goal of financial independence by the end of 220 days of trading. However, on Friday I made 3 errors in judgement that set me back which, had I come to the opposite conclusions, would have propelled me forward dramatically, way ahead of schedule. Nonetheless, an unexpected byproduct that resulted from correcting my flawed evaluation process was yet another subtle refinement made to my 1-minute chart setup (which I would have thought would be unnecessary by now)... The new configuration (above) looks to be a near-perfect tool to use for trading Nadex 20-minute binary options, but unfortunately, Nadex does not offer such contracts with respect to foreign currency pair derivatives. I therefore plan to see if the setup can be adapted to the U.S. indices. If it can, and if it results in a virtual 100% daily success rate (as I am more than hoping it can, God willing) I am likely to try using it to trade 20-minute binary options in my Nadex live account beginning in June or July, in that I can theoretically realize a daily haul (given my tiny trading account) a minimum of four times what is possible trading through a traditional Forex broker.