Discussion in 'Journals' started by expiated, Oct 20, 2018.

  1. expiated


    ScreenHunter_2327 Oct. 20 19.46.jpg

    I have decided to conduct a demo-study to see if my Numerical Price Prediction (NPP) swing method of trading will enable me to purchase NADEX binary option in-the-money contracts profitably.

    I can theoretically make much more money with a tiny trading account deposited with NADEX than I can via a traditional Forex broker—like fifteen bucks a pop as opposed to one, two, three, four, or five—but the humongous drawback is that the reward-to-risk ratio will be absolutely horrible, like about 3:7 at best and often more like 3:17.

    This will require being correct almost 100% of the time!

    But if successful, the exponential growth of my account will occur at a much more rapid pace than would be possible via a traditional Forex trading account.

    I attained a 90% success rate at NADEX previously, before I even “perfected” NPP, so hypothetically, it should be possible. In any event, I’ll never know if I don’t give it a try, so I’m going to give it a try.
    Baron likes this.
  2. destriero


    You’re so successful that you are f*cking around with piker NADEX?
    tradethereaction likes this.
  3. expiated


    EURUSD is beginning to behave in such a manner as if to suggest that the shorter-term trend is ready to rejoin the longer-term trend heading south, so I purchased an in-the-money binary option contract with a 1.1520 strike price to give myself a 20-pip cushion.

    In order to obtain a reward-to-risk ratio that was simply awful as opposed to being ridiculously awful (approximately 25:75) I had to opt for an expiry that was ten hours away!

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    The other thing I dislike about Nadex is that the default setting for their display always runs off the right side of my screen. To make matters worse, it isn't like MetaTrader 4, where I can just resize the window and everything adjusts accordingly. No, with Nadex I have to make the adjustments cell-by-cell if I want to see all the information, which is a real pain in the neck. I wish they had set up their platform to maintain an economy of space by designing the cells to fit to content.
  4. expiated


    Initially I had five possible scenarios that might have served as a trigger for purchasing a binary option contract. This move by EURUSD has eliminated three of them, (leaving me with two possibilities). If the last two options are also eliminated at any point in the future, I will have to look at whether a combination of two or more of them might be of any use.

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    Given that my "core"moving average indicates EURUSD has not turned bullish within the larger context, I purchased a second put contract, it's expiry set 20 hours from now (the maximum available). With a strike price of 1.1520, it will not even put me back at breakeven should the contract expire in-the-money, what with a -$83.25 loss against a $68.25 gain. (It's almost midnight, so I can't wait around until EURUSD to stop climbing due to my need for sleep. I'll just have to wait to see if 20 hours is enough time for the pair to reverse course in a significant way.)

    UPDATE: I just purchased an EURJPY put contract as well. The pair has been falling ever since September 26th, and unless it is suddenly going to make a radical move in the opposite direction, its structure is such as to make the statistically probability that it will not be above 130.00 twenty hours from now relatively high.
    Last edited: Oct 22, 2018
  5. expiated




    When I retired for the night EURUSD was still climbing, but apparently it reversed course within that same hour because when I checked this morning, the candlestick it had been forming was red. With such a sharp decline, the contract was obviously in-the-money at the time of expiry approximately three hours later...

    ScreenHunter_2336 Oct. 22 07.06.jpg
    I would think it was some type of news event, announcement, or data release that sent EURUSD shooting north in the first place, but to be honest, I no longer give much (or any) attention to economic calendars, which I find kind of shocking to say, but it is true.

    The thing is, the Numerical Price Prediction (NPP) forecast model evaluates market conditions based on historical data. This data includes the behavior of price during news releases, so such events are, you might say, "baked into the cake" when it comes to analysis.

    Besides that, it seems to me price action during economic events often defies logic. It is almost as if the market makers use the extra volume to send price where they wanted it to go in the first place, no matter what the news says. And should the fundamentals be so powerful as to change the course of the overall trend, there is always plenty of time afterward to recuperate any losses and then take advantage of the new direction.

    Which highlights one of Nadex's touted advantages, since I was indeed stopped out of my EURUSD short position at OANDA, and given that I was asleep at the time the exchange rate reversed south, I did not get in on the subsequent opportunity to recoup my loss and make a little change on top.

    Apparently the minimum opening balance at Nadex is now $250.

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    That would put the payout from my first trade at approximately 10% of the opening balance, which is great, and five times the size of the $5.00 I might have gotten from OANDA! But it also meant putting about 30% of the opening balance at risk, which is not so great.

    Given that the trade was successful, I would have banked my other two positions immediately to lock in guaranteed profits rather than risk waiting another 13 hours for full payouts when one never knows what might happen. But for some reason, the connectivity did not seem to be there...

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    (I do not judge a few extra dollars due at expiry to be worth risking what can be pocketed immediately.)

    In the past, I've had problems with a Nadex demo account while my Nadex live account was simultaneously working just fine, so I'm not sure what the issue was! I just checked again and the platform is finally working now, so let's see if I can remember how to close out these positions early (before expiry) in the right way...

    ScreenHunter_2337 Oct. 22 07.44.jpg

    I forgot to get a screenshot before I began closing the positions, so EURJPY is missing from the above image. Even without waiting for the full payouts, these three trades have returned virtually 50% of the opening $250.00 balance ($122.25) in less than 24 hours!

    I might now also have a better idea as to which numbers (out of a set of six—not five) to use as a trigger for entering positions at Nadex, so if I can get better at avoiding precarious situations like the one EURUSD put me in a few hours back, the high percentage of successful trades just MIGHT make the high ratio of risk-to-reward worth it.

    I forgot if Nadex offered any New Zealand pairs and therefore had to open up their platform to see, so I'm posting their list of Forex offerings here so I can look them up more easily now.

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    Last edited: Oct 22, 2018
  6. expiated


    I Bought AUDJPY in my live OANDA trading account, and was going to do the same in my demo account, but my take-profit target was hit before I even got the chance.

    While all this was going on, I was actually in the process of trying to purchase a GBPUSD Nadex demo account binary option call contract, but was unable to do so because, once again, there seemed to be a problem with connectivity. (Note that there is no Indicative Price, and the Bids and Offers are not flashing...)

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    I therefore opened my Nadex live account to see what the situation would be there, and found that it was even worse (see below).

    ScreenHunter_2342 Oct. 23 00.45.jpg

    The blue busy circle just kept spinning and spinning and spinning, accompanied by a "Loading Please wait..." message, but by that time, the demo account was finally up and running. Still, I seriously doubt I will go back to trading Nadex in my live account given the apparent performance of the platform (or the lack thereof).

    But getting back to the trial...buying GBDUSD is not what my system recommends in that it conflicts with my "core" moving average, which is bearish.

    However, the candlesticks began forming above the trigger line I selected this morning, which implies that the exchange rate will not fall back below 1.2972, bearish or not, for at least a couple of hours.

    So this is a test to see whether or not I should assign the trigger line more weight or prominence than the core trend, enough so to override an asset's overall bias/sentiment.

    Unfortunately, I couldn’t even get a 1:4 in-the-money contract reward-to-risk ratio with a decent cushion until up to a 7 hour expiry, which stretches into the NY session, with plenty of time for the trade to turn against me. So again, this is a test of trigger line vs. overall bias. (Which is the more valid measure on which to base my decisions?)

    And at this point, I am merely using Nadex to gain insight into which data to assign the most importance in an effort to help me become more efficient trading via OANDA, since Nadex's platform currently is not at all to my liking.
    Last edited: Oct 23, 2018
  7. expiated


    Upon placing my order yesterday, I was inclined to believe that my trigger line should trump overall market bias as arbiter of when to enter a given position. I have seen nothing this morning to change my mind.

    ScreenHunter_2344 Oct. 23 06.12.jpg

    The contract was worth $10 when I woke up, but only $7 a couple of minutes later. Combine that with the fact that the rate had come down approximately 40 pips from where it was two hours ago (I'm curious to know what the contract was worth back then, but unfortunately, I was asleep at the time), along with the Bank of England's Carney being scheduled to speak a couple of hours from now, and you have all the reasons why I am cashing out to pocket a guaranteed $8.00 profit rather than waiting another two hours in hopes of realizing the promise of $20.00.

    Carney's speech is not scheduled to begin until 10 minutes after expiry, but who knows what might happen as that moment approaches, so I am sticking with “a bird in the hand is worth two in the bush.” And don’t forget, the overall bias IS still bearish after all.

    The only question I have left is: "Is the best time to enter a position when the candlesticks cross my trigger line headed in the SAME direction as my core tend line?"

    To help answer that question, I'm about to purchase a EURUSD put contract, given that this is the very situation that has just set up with that pair.
  8. expiated


    The platform isn't working again, so chuck it!
  9. expiated


    I just logged into my Nadex demo account and, what you know, the platform was active!

    Even with expiry 23 hours away, if I purchased an in-the-money EURGBP call contract, I would only be given about a 25:75 reward-to-risk ratio, so just for the "fun" of it, I purchased an "even-money" contract instead...

    ScreenHunter_2346 Oct. 23 17.04.jpg

    Unless the pair climbs by some ridiculous amount, I will be watching to see if I'm given the opportunity to cash out early, and if so, with how much of a profit.
  10. expiated


    EURGBP is back above 0.8840, but there is no guaranty it will remain so over the next three hours until expiry, especially since it has been stuck in this same general region for the past four hours, so I'm going to go ahead and cash out now with what I've got ($17.75).

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    #10     Oct 24, 2018