Nadex 101 Series Part 1 – Nadex Trading Binaries
NADEX MADE SIMPLE – PRESENTED BY CHARLIE COMBER
Why Nadex?
Nadex is an exchange trading platform that is regulated by the CFTC
Subject to regulatory oversight by the Commodity Futures Trading Commission.
All member funds are held in major US Bank
Protects you from market spikes getting stopped out
Offers short term contracts
Offers a wide range of markets
Offers low capped fees
Nadex Binaries
Nadex Binaries are one of my personal favorite to trade. Let me explain what a Nadex Binary is and how to trade it as simple as possible.
1.It is a True or False statement that upon expiry of a contract, the price will be above a specific price
2.Upon expiration, each contract is worth $0 or $100 per contract
3.Please note that before expiry –you may Stop Loss or Take Profit from the contract(s) by taking a trade against your initial entry.
◦For example –If you took a BUY on the EUR/USD and you see that the price is not going to go in your favor OR the contract is in your favor and you see that you have made a profit that is acceptable to you -THEN you may purchase that same contract again as a SELL
Strike Price & Buy vs Sell
What is Strike Price?
1.The Strike Price is the value of the contract
Let me explain what it means to Buy vs Sell
1.To Buy a contract means that the price will be above the strike price as a True statement
2.To Sell a contract means that the price will be above the strike price as a False statement
Risk & Potential Profit
Each contract purchased in Nadex is worth $0 or $100 at the time of expiration.
You may buy multiple contracts per trade.
When you purchase a contract
1.If you purchase a Buy at $70, then you are risking $70 to make a potential profit of $30 per contract.
2.If you purchase a Sell at $70, then you are risking $30 to make a potential profit of $70 per contract.
Purchasing a Contract on Nadex
To purchase a contract on Nadex select the binary you want
Click on Buy (Blue) or Sell (Red)
Enter the Size –or # of contracts you would like to purchase
Enter the Price you would like for entry
Click on Place Order
*Please keep in mind that when purchasing a contract on the
Nadex platform –you will see a negative amount under
Profit/Loss upon entry
Entry Point of Contract Purchase
As I just stated, you will see a negative amount under Profit/Loss upon entry when purchasing a contract
This should not alarm you. What you want to pay attention to, is the Indicative Index under your Open Positions.
ATM –OTM –ITM –What?
There are 3 different types of binary contracts and it seems I get more questions about this than anything
OTM –Out of the Money
ITM –In the Money
ATM –At the Money –Where the current market price is at –These contracts have an approximate 50% chance of being OTM or ITM
Let me give an example –
If you Buy the EUR/USD at 56.5 –you are stating that the statement is True; therefore the price must go above 56.5 at the time of expiry. If the price expired above, then you would be ITM. If the price expired below, then you would be OTM.
OTM
OTM contracts can only make a profit if the market moves in the direction of the contract purchased. With OTM contracts, you can enter the trade at a low risk, to make a high profit.
For example –If I purchased the
EUR/USD at 1.11147 –I more than
Likely would’ve risked around $20 to
Make a profit of $80 per contract
ITM
ITM contracts can only make a profit if the market stays in the direction of the contract purchased.
For example –If I purchased the
EUR/USD at 1.11147 –When my
Indicators lined up to take the trade,
I more than likely would’ve risked
around $70 to make a profit of $30
per contract
Open Your Demo Account
Ok, now that you have an intro and general understanding of the NadexPlatform, go ahead and open your demo account. The next video will be Part 2 on the Nadex101 Series and I will go into more detail.
Visit Nadex.com to open your demo account or if you are a non US Citizen, visit IG.com