Beta Testing the New Nadex Trading Platform

[expiated]

RULE ONE: Stick with the standard practice of ONLY purchasing contracts that will expire within the PRESENT hour. (Two hours provides too much time for tables to turn.) In effect, this means the earliest you should begin trading each day is 4:00 PM Pacific Time.

RULE TWO: ONLY trade trending pairs, even though it is theoretically possible and also justifiable to trade a mean reversion/regression toward the mean strategy at the outer extremes of the typical price range of consolidating/accumulating pairs. (This is based on prudence and an abundance of caution and NOT on a failed trade.)

As I worked with the above two rules, along with the advice from Post #229 to ONLY enter positions when the direction of the proposed trade matches the slope of the 13-minute baseline, I was led to code an indicator that projects or estimates what is typically the maximum size of a 15-minute candlestick, as illustrated below.

However, its usefulness when trading foreign currency pairs was limited because the strike prices on five-minute binary options were too tight to provide for reasonable odds that an asset would be in-the-money at expiry—no matter what value was selected—and the two-hour binary options left open too wide a window for fortunes to turn.

Accordingly, I am in the process of evaluating the use of this measure trading U.S. indices rather than Forex pairs, which might work to my advantage in that I would have three opportunities to trade each hour rather than the one opportunity per hour I have when trading two-hour Forex binary option contracts.

 

[maxinger]

STOP BETA TESTING FOR MORE THAN A YEAR!!!!!!!!


If it doesn't work after a year, try different thing!!!

Let's say you are 50 years old. And life expectancy is 75 years old.
Do not attempt to beta test for many many decades!!!!

By then you will be dead with huge debts

 

[expiated]

Friday | May 5, 2023 | 8:41 AM PST

Using my demo account to trade Nadex Forex binary options with the kind of reckless abandon that demanded total perfection, I took a $10,000 opening balance to $70,000 within a couple of days before overlooking this or that aspect of my forecast models, thereby ending my winning streak. Nonetheless, that process guided me to doing an improved job of interpreting my charts.

So presently, I'm taking my enhanced system model interpretation skills and applying them to Forex virtual knock-out contracts (which are much more forgiving than binary options) to see if I can grow a $10,000 opening balance to $100,000, and if so, how long it takes me to do so (all of this in preparation for going live later this month)...

I began yesterday, and at the end of this 24-hour market cycle, my balance is now at $12,708.25.

Previously, my methodology (which was "finalized" around this time last year) was a style of day trading that was very profitable, but demanded the constant monitoring and managing of my positions to implement it successfully...just when I experienced a change of circumstances that prevented me from doing so. It's taken me the entire year between then and now to "morph" that system into a pseudo swing style of trading that now empowers me with the ability to put on trades and then walk away with almost the same level of confidence—with the slightly lower success rate more than compensated for by the substantial size of some of the most profitable winning positions.

Again, given this most recent development, I'm carrying out this last little exercise before switching back to real money.

 

[expiated]

So, today I tested the information I got saying that Nadex no longer requires traders to deposit a minimum of $100 when adding to their funds, and indeed, it turned out to be true...

Consequently, I have to admit that the service has made at least two improvements, from my perspective... this one, and the introduction of Knock-Outs a couple of years ago, which provides me with a way to avoid having to deal with the absolutely outlandish (in my opinion) risk:reward structure of their Binary Option Contracts.

 

[expiated]

So, in comparing where my system calculates the top and bottom of the projected weekly price range of GBPUSD at 2 AM Monday morning as compared with the levels where Nadex would return a $6.50, $15.75 or $9.00 weekly in-the-money binary option reward to an approximate $80 to $90 worth of risk, this is what I'm looking at...

At this same hour, I'm looking at about $4 to $16 worth of reward for approximately $84 to $96 worth of risk with respect to a daily in-the-money binary option...

 

[expiated]

So, four hours later, the range of contracts paying $6.00 and above has not changed dramatically, but has merely dropped down with a drop in the rate. The black outlines show where the interval is now, compared to where the strike prices were back then.

There's now about 18 hours left rather than 22.

 

[expiated]

There's now about 18 hours left rather than 22.

With three hours left to go, I see nothing of use coming from this little exercise.

 

[expiated]

Let me record the intervals between the middle two strike prices at different times during the day to get a clearer picture of exactly what's going on with these numbers. At 8:45 PM PDT there's four pips difference between the strike prices and $26.75 between the payouts...

 

[expiated]

The "BOUNCE LEVELS" Tactic
Monday | June 26, 2023

Unless AUDJPY executes a bull run, I expect it come down from 96.31. If it does, will it be there eight hours from now, 12 hours, or 24 hours? This is what I want to know.

This is even truer of AUDUSD at 0.6715, which is more bearish than AUDJPY, even though it has been in consolidation for over a day. (At the moment, AUDJPY is pretty much neutral).

Though EURJPY has gone nowhere in two-and-a-half days, it's still overall bullish. So, look to buy off any bounce within the 155.42 to 156.20 neighborhood. For GBPJPY, the buy zone is between 181.23 up to 181.97; and it's between 142.51 and 143.14 for USDJPY.

For USDCAD, the sell zone is from 1.3175 up to 1.3235 (if it can manage to climb that high).

EURGBP is structured for a bullish bounce anywhere below 0.8562.

(So, for this tactic, you check your charts once at the top of each hour.)

 

[expiated]

Unless AUDJPY executes a bull run, I expect it to come down from 96.31. If it does, will it be there eight hours from now, 12 hours, or 24 hours? This is what I want to know.

It was around 8:00 PM PDT when I made my observations. So then, AUDJPY reversed course about three hours later, and hit a local low about five hours after eight o'clock, during the 1:00 hour (or actually, it was during the 2:00 hour, but that was also when it reversed north in a dramatic way)...

So then, the maximum drop took five or six hours (to answer my question). It still has room to drop further, but once it falls below 95.93, it will once again enter a "bullish bounce" zone.

AUDUSD began to drop two hours later, during the 10 PM hour, and fell dramatically at 1:00 AM. It has already made contact with its bullish bounce zone (but just barely).

The closest EURGBP made it to the bounce zone (at 0.8562) before ricocheting north was four pips higher at 0.8566 (during the 11 PM hour).

With the exception of USDCAD, the other pairs didn't even make the effort. USDCAD has yet to bounce (south), which I am expecting it to do, but it has also not quite reached its bearish reversal zone, which is still 17 pips away.

CONCLUSION: I like this "bounce level" tactic. The landmarks this particular forecast model provides serve as nice "lead lines" for gauging the maximum depths or heights to which pairs are likely to rise or fall before encountering some manner of rejection.