WestmarkTrading - Trading Made Simple - 6 Stress Free Ways to Exploit Volatility

Chapter
01

How Nadex Keeps Trading Simple

By Dan Cook, Nadex.com

Even for the most experienced trader, trading is never easy. For a newcomer to the markets, the whole experience can be absolutely overwhelming.

Traditionally, most exchanges were designed for institutions or professional traders. This meant large contract sizes and capital requirements that were far beyond the reach of all but the wealthiest. This effectively closed the door to the individual, retail-level trader. Even as mini and micro contracts have been introduced at other exchanges, and capital requirements have dropped, trading on many of the traditional asset classes is still the realm of the institutional trader with ultra-fast, dedicated connections into the exchanges and super computers placing trades in nano-seconds. When you consider an individual facing this as their competition, it is much akin to being dropped in the middle of the ocean, in shark invested waters, with a raw steak tied to your leg. A few might make it to shore, but most won’t.

At Nadex, we pride ourselves on being an exchange designed specifically for you, the individual trader. While we can never guarantee that trading will be easy, we strive every day to provide an environment that simplifies the process and shortens the learning curveto understand how to trade products, so you can focus on personal growth items, such as trading psychology and risk management, without being distracted by unknown risks. We do this in several ways:

8 Ways Nadex Keeps Trading Simple

  1. Low Barrier to Entry – At Nadex, you can access some of the most popular asset classes such as stock index futures, commodities and currencies, with a very low initial deposit. Additionally, as you will see with some of the strategies in this e-book, many trades can be placed with capital requirements that are less than $100.00 per trade. We believe everyone should have access to trade the markets, but also access to trade them sensibly with all possible protections in place.
     
  2. Defined Risk – Part of trading sensibly, is being able to understand and define your accepted risk on every trade. With all Nadex contracts, the maximum possible risk and potential return, excluding fees, are known before the trade is placed and are presented transparently on Nadex order tickets. You also have the flexibility to close out positions prior to a contract expiring, to limit losses or lock in profits, while also having the assurance of knowing the worst-case scenario up front. There is no possibility of a margin call or losing more than you have in your account based on your trading or the underlying market's activity. This fact alone can go a long way toward preventing a lot of sleepless nights.
     
  3. Consistent collateral requirements – For all trades at Nadex, the cash you need to put up to secure an order, or collateral requirement, is always equal to the initial risk on that trade. Even if you choose to hold a position overnight, unlike futures where you may need to close out prior to the close because of increased capital requirements, at Nadex there is no additional margin or capital needed to hold that position.
     
  4. Straightforward contracts – Whether you are trading a binary option, knock-out or call spread contract, each instrument has a simple design where the most important elements of any trade, namely maximum risk and potential reward, are immediately visible right on the order ticket. While each contract has a basic construction, as your trading evolves, these contracts can be utilized in multi-contract strategies creating powerful trading opportunities. Additionally, if you are an experienced trader, because our contracts are based on the most popular markets in the world, your analysis does not need to change, you are simply using a different vehicle to express your opinion about market direction.
     
  5. Around the clock trading – Nadex contracts are available for trading 23 hours a day from Sunday evening to Friday afternoon. With the combination of wide-ranging market hours and short-term opportunities, you can trade when it fits with your schedule, whether that be late at night, early morning or throughout the day.
     
  6. Transparency – It is almost impossible to trade successfully if you are not confident in what you are trading. As an exchange, Nadex's primary function is to match buyers and sellers, in an unbiased manner, at an agreed upon price. If you have a question about a price a trade was filled or if you would like to understand how the contract expiration value was calculated, simply reach out to us and we are happy to provide the time and sales data and walk through each element of the trade.
     
  7. No High-Frequency Trading – At Nadex our mission is to provide a fair, level playing field for all of our traders. As such, we do not currently allow direct connections into our exchange for the purpose of placing orders. As an additional layer of protection, we also set strict limits on the number of orders that can be placed per second, which reduces the possibility of high frequency trading disrupting our markets and works to keep you on a level playing field with all of our other participants. 
     
  8. No Pattern Day Trader Rule – If you have tried to day trade stocks, this is probably a rule you are familiar with. In general, unless you have an account balance of $25,000, you are prohibited from placing more than 5 trades in any given week in the stock market. This can severely restrict the opportunities traders can take advantage of, and sometimes worse, because opening a position and then closing a position counts as two trades, many have found themselves placing their 5th trade of the week to open a position, only to find out later, they are not able to close it and are trapped being exposed to the whims of the market. At Nadex, there is no pattern day trader rule. You can trade in and out as often as you like, as long as you have adequate capital in your Nadex account to secure each position.

These are just a handful of ways Nadex helps keep trading simple for our members. One other way is by offering a free, Nadex demo account where you can come in, explore the contracts and the platforms on your computer or mobile device, and determine for yourself what types of opportunities trading at Nadex holds for you.


To access your free demo, simply


ABOUT THE AUTHOR

Author: Dan Cook, Director of Business Development
Company: Nadex
WebsiteNadex.com
Services Offered: CFTC-Regulated Trading Exchange for Desktop or Mobile Devices. Binary Options, Knockout and Spread Contracts.
Markets Covered: US and Foreign Equity Indices, Major Currency Pairs, Commodities, News Events

The North American Derivatives Exchange™ (Nadex) is the premier US exchange for binary options, call spreads, and knock-outs, offering secure and innovative ways to participate in the markets. We are regulated by the Commodity Futures Trading Commission (CFTC), and member funds are held in segregated accounts in major US banks.

Chapter
02

Candlestick Signals for High-Probability Setups

By Stephen Bigalow, CandlestickForum.com

Candlesticks and candlestick patterns give us a clear picture of investor sentiment, providing graphic depictions of human emotions. With candlestick pattern analysis, it's very easy to spot trending markets, and when to spot potential reversals.

Candlestick analysis is critical to Portfolio Management because it positions you in the direction of the trend, and not against it. It is ideal for Day Trading and Swing Trading.

Trading with the T-Line

When we use the T-Line (8 EMA) in conjunction with major moving averages, and the Stochastic oscillator, it can be very easy to spot high probability trade entries and exits.

Let's take a look at an example for Gold on July 22, 2020.:

Everything was bullish for Gold. The market tested the 50 SMA in mid-June which held up  as support. Since then, Gold has continued to grind its way upward, staying in a nice "Steady Eddie" pattern riding above all of the moving averagers.  There's no reason not to remain bullish unless the market closes below the T-Line.

With that information, it's very easy to make some trading decisions with Nadex. Since our bias is bullish, we can easily locate trading opportunities with Nadex. 

With Nadex Binary Options, you are you expressing your opinion about where a market will travel relative to a fixed price level (strike price), and also within a specified time frame.

Nadex Binary Options are traded in Contracts. Each contract is valued at $100. The marketplace of buyers and sellers determines what your risk and reward will be.

Example: Let's say the underlying market is at the same level of a strike price. You might be able to buy a contract for $50. That means someone on the other side of the trade is also willing to risk $50.

When your trade fills, $50 will be deducted and withheld from your trading account. If you hold that trade until expiration, then there are 2 possible outcomes:

  1. You are right, and will collect $100, per contract traded, or
  2. You are wrong, and your payout will be $0, so you forfeit the $50 that was withheld.

You are not married to the trade. You can exit any time you wish. You can exit to lock in profits or to minimize losses if the trade is moving against you.

In this case, I was trading my opinion that Gold would close above 1,840.50 by 1:30 ET Friday, when the Gold Pits close.

On Monday afternoon, Gold was traveling around the 1840 strike price. I chose a Weekly Binary Option, expiring Friday at 1:30pm ET.

Contract Details:

Contract: Buy Gold (Aug) >1840.5
Contract Expiry: Weekly: Expires on Friday, July 24 at 1:30pm ET
Price: $50
Maximum Risk: $50 (plus exchange fees)
Maximum Reward: $50 (less exchange fees)

Trade Results

This trade moved rapidly into profitability and kept grinding upward. I could have opted to do nothing and let this trade expire for a highly probable maximum profit of $50. But in these volatile markets, I opted to exit the trade for a $42 profit. 

In my mind, I cut most of the meat off of the bone, and locked in a sure profit. There are still 2 full days until expiration, and anything can happen. 

Conclusion

When you use the T-Line, major moving averages, stochastics, and couple it with the knowledge of a handful of common candlestick patterns, it becomes easy to gauge market sentiment, and to stack the probabilities on your side.

At Candlestickforum.com, our new Nadex Alerts program will scan the US stock indices, Oil, Gold and a few currency pairs for optimum setups using the time-tested methodologies employed by Stephen Bigalow for his daily and weekly market analysis.

ABOUT THE AUTHOR

Author: Stephen Bigalow
Company: Candlestick Forum
WebsiteCandestickForum.com
Services Offered: Trading Education, Books, Videos, Webinars, Indicators, Live Trading Room
Markets Covered: Options, Stocks, Forex, Futures

Stephen W. Bigalow has nearly 40+ years of investment experience, including eight years as a stockbroker with major Wall Street firms: Kidder Peabody & Company, Cowen & Company and Oppenheimer & Company.

Chapter
03

The Perfect Knockout

By Mark Hodge, RockwellTrading.com

Simple to understand, low risk, with super high profit potential...sounds a little too good to be true, right? Well, such a strategy does in fact exist...but honestly, even now I'm a little reluctant to share it. Up until this point this has been a strategy that we've kept pretty close to the vest. In fact, for a while I believe Markus and I were the only two people doing what we were (and still are) doing and it was working GREAT! So when we were confident in the profitability of this strategy, we first shared it with our private coaching students. This is our small group of hardcore traders who pay us a pretty penny for this type of inside look into what Markus and I are trading.

Like any good trading strategy or system, it's possible that if enough people start doing it, the 'big guys' could catch wind of it and program their algos to fade our trade signals. This could ultimately render the strategy dead in the water. If you've ever read the famous trading book "The Way Of The Turtle" this is something they mentioned even pre-algo days.

But since they have limited the availability of this special online event, we've agreed to share it with everyone that attends. We call this strategy "The Perfect Knockout."

SHORT VIDEO PRESENTATION: THE PERFECT KNOCKOUT

 

This strategy can be traded on the indexes, commodities and even Forex...but for us, we only focus on the few markets that we've found to work best. One of the many great things about this strategy is that because you're only risking a small amount on each trade (typically between $50-$75), it's great for even small accounts.

For example, on this particular trade setup I'm looking at, I can risk $75 to make as much as $525! That's a 1:7 risk/reward ratio! I promise this strategy couldn't be any easier, even if you're brand new to trading. And that $75 is fixed risk, meaning that's the max you can lose on the trade.

So if you'd like to learn this powerful strategy, I'm going to lay it all out as if you were part of our private coaching group. I'll give you our simple to follow trading plan with all the rules we follow to trade this strategy consistently and profitably.

Join me on August 20th for the "Trading Made Simple" financial symposium where I'll be giving my presentation, "The Perfect Knockout." It's going to be a lot of fun and I'm positive you're going to LOVE trading this strategy!

ABOUT THE AUTHOR

Author:  Mark Hodge
Company:  RockwellTrading.com
Website: RockwellTrading.com
Services Offered:  Trading Education, Trade Ideas, Live Trading Room
Markets Covered:  Stocks, Options, Futures, Forex, Nadex

As Head Coach at Rockwell Trading, Mark is co-developer of many of Rockwell Trading’s educational resources, and works on an individual basis with traders around the world.

 

Chapter
04

When Out-of-the-Money Makes Cents!

By Bryan Caprice, KeepTradingSimple.com

Trading Parabolic Retracements is a strategy I developed over 15 years ago, and I use the strategy regularly in my trading.

The strategy I am going to talk about leverages fear and greed, the two forces that drive volatility in the markets, in a very safe way.

Parabolic moves are the kind of moves that have you scratching your head saying "What just happened"? These moves are most often triggered by fear or greed surrounding a news event, or even a tweet.

During my presentation, we will define parabolic moves, when they can be traded, and how to place low-risk, high-reward trades on these events.

SHORT VIDEO PRESENTATION: PARABOLIC RETRACEMENTS - WHEN OUT OF THE MONEY MAKES CENTS!

ABOUT THE AUTHOR

Author: Bryan Caprice
Company: Keep Trading Simple
Website: KeepTradingSimple.com
Services Offered: Trading Courses, Mentoring, Weekly Newsletter
Markets Covered: Forex, Futures, Stocks, Options and Nadex markets

Bryan's mission is to simplify trading and help remove the many distractions that the “professionals” tell new traders they have to use. His "Trader's Archetype" model is a system designed to help people tradie according to their individual situation.

Chapter
05

The Nadex Secret Weapon

By John Skelton, ApexInvesting.com

My name is John Skelton with Apex Investing Institute. I’m excited to share a short video here with you about how we are navigating the markets during this time of volatility and uncertainty. There are many systems out there that can give you a “possible” good set up. But possible is not good enough during these times. We focus on “probably” and not just “possible”. We are looking for the best of the best.

In this short video, I will do a quick review of of some of the ways wthat we look for identifying trading opportunities with Nadex. We will look af "Kink and Burst" opportunities. Much like a crimped water hose, pressure can build up when markets are in consolidation, resulting in a breakout once the pressure is released. We will also lokk at directional trading opportunities, straddles & strangles and other ways to stack the probabilities on your side.

You will also get a preview of the special tools we have developed at Apex Investing Institute to give you a crisp, clean picture of what the markets are telling you.

SHORT VIDEO PRESENTATION: THE NADEX TRADING SECRET WEAPON

 

ABOUT THE AUTHOR

Author: John Skelton, Head of Operations
Company: Apex Investing Institute
Website: ApexInvesting.com
Services Offered: Trading Courses, Software, Trading Community, Funded trading
Markets Covered: Futures, Nadex, Stocks, Options

Apex Investing is a trading community with 30,000 traders in over 150 countries globally. ... To simplify trading, they have developed numerous tools that they have applied to futures, forex, stock, and option markets.

Chapter
06

My Number 1 Crash-Proof Profit Strategy

By Eric Marcus, MajorLeagueTrading.com

Squirrel!

Yes, I said it. Call it the shiny object syndrome or whatever you would like, but the cold hard truth of the situation is that as humans our attention span has dropped to a mere 8 seconds. So, if you made it this far already then keep reading until the end, because a squirrel with an acorn before them can focus for up to 4 minutes, and what I’m about to share with you...well let’s just jump into it already.

The quest for the holy grail! - This is the title of an unwritten book about your trading journey thus far. Chapter 1 is all about how you came across the markets, and what inspired you to learn how to trade/invest. Chapter 2-57 is broken down into each of the trading strategies that you learned and applied for just a mere 8 seconds. Chapter 58 is about how you found the ‘acorn’, and Chapter 59 is where you started to turn the corner in your trading career and began stacking acorns.

What is it that allowed you to turn that corner though, and put an end to the shiny object syndrome? Focus.

A single strategy with clearly defined rules that works in whatever market conditions we are experiencing.

Crash Proof: My Number One Profit Strategy

As a trader there is this underlying desire to be right about what a particular instrument is going to do, and then an emotional attachment to your own intelligence when you actually enter into a position based on your thoughts or analysis, and not to mention the money aspect. This is caused from trying to predict what price is going to do rather than react when it tells you what to do.

How do you know when the market is telling you what to do though? Let’s look at an example.

In the chart below we have a grid of the 4 Main Index futures for the US market.

What we are watching and waiting for is a moment in time where 1 or more of the markets is doing something that the others are not doing. In this example we have the RTY and YM selling off to make new lows on the day around 11am EST. The ES & NQ do not break through those morning lows though and set a higher low. This is the overall market telling us or showing us that something isn’t quite right in this move, and that is when our opportunity presents itself.

In 2011 I stared & stared at the markets for thousands of hours. When I finally took a step back and started thinking to myself “Ok what is the market telling me right now?” The strategy I just shared with you was staring me right in the face. I have not changed or tweaked a single thing with this strategy in 9 years now, and it still continues to perform.

ABOUT THE AUTHOR

Author:  Eric Marcus
Company:  Major League Trading
Website:  MajorLeagueTrading.com
Services Offered:  Trading Education, Trade Ideas, Live Trading Room
Markets Covered:  Stocks, Options, Futures, Forex, Nadex

Eric Marcus is an active day and swing trader that uses 2 main strategies he developed himself, and now teaches to his students through his website.