Trading NADEX Knock-Outs

[expiated]

Sunday | April 10, 2020 | 7:40 PM PST

A couple of Euro pairs look like they could be trying to reverse north, so it might soon be a good time to get in at the base of a fresh ascent.

USDJPY is decidedly bullish, but the structure is presently awful for entering a long position (the pair is surging rather than pulling back) so let me see what happens if I purchase the four knock-outs right here, from the top to the bottom...

I'm going to do the reverse with AUDUSD, which is very bearish, but I will opt not to paste the associated images in this case.

Wait...two of the positions have already been knocked out (I can't find the third one), so I really don't see any point in pursuing this experiment any further. Clearly, trading knock-outs without regard to market structure would be just plain stupid. (Nix AUDUSD.)

UPDATE...

Structurally, GBPUSD looks good. I'm going to see what happens if I try to reach $20,000 on the back of this pair (a binary option put contract) and then purchase a logical knock-out as well. (The only thing was, to get a binary option contract where the payout wasn't grossly awful, I had to pick an expiry that was a minimum of four hours away!)

 

[expiated]

I'm going to see what happens if I try to reach $20,000 on the back of this pair (a binary option put contract) and then purchase a logical knock-out as well.

I realized afterward that I entered the GBPUSD short position via a knock-out intuitively rather than based on the protocol from Post #9 given that candlesticks were not painting on the far side of the four-hour price range envelope. (I acted because of the price action I saw in terms of the instantaneous moving average and the three-hour baseline on an hourly chart.)

I don't know what happened with the top USDJPY knock-out. It should have paid out, but it didn't. The second one down did pay out, so if one is going to ignore structure, it rules out the bottom two options (when entering long positions). However, that defeats the whole point of (my) trading knock-outs, which is for the more favorable risk-to-reward ratios.

 

[expiated]

GBPUSD reversed direction, so the last target was never hit. If I recall correctly, at one point, it was at least $9.00 in profit territory, so that's something to keep in mind. Based on this recollection and past observations, it could be that a $6.00 target will almost always be hit, whether the pair follows through on its original trajectory or not.

 

[expiated]

For My Information...

In reviewing the GBPUSD chart, the optimum time for entering a short position, the one that meets the above described protocols (except that the four-hour price range envelope was no longer bearish then) was between 2:00 and 3:00 a.m. this morning, when unfortunately, most sane Californians are fast asleep...

 

[expiated]

Monday | April 11, 2022 | 9:40 AM PST

A couple of Euro pairs look like they could be trying to reverse north.

The Euro pairs did indeed reverse north, especially EURJPY, and are presently in the midst of pullbacks that "should" serve as ideal launching pads, if and when price is rejected by support

I'm going to go ahead and purchase the middle two knock-outs for each of these pairs, with maximum losses between $30 to $50, because I will not be sitting around waiting for their relative bounces, which I would love to do, if I could.

Let me see what happens...

 

[expiated]

I'm going to go ahead and purchase the middle two knock-outs for each of these pairs, with maximum losses between $30 to $50, because I will not be sitting around waiting for their relative bounces, which I would love to do, if I could. Let me see what happens...

...quite a disaster.

Based on all that has occurred thus far, let me see what takes place if I introduce the setting of six-pip take-profit targets into the mix.

USDJPY would be an almost perfect candidate if the four-hour measures were bullish, but alas, they are not. Nonetheless, there are enough structural pros vs. cons that I'm going to go ahead and take a shot.

I'm going to take a stab at USDCAD as well.

UPDATE: I just used the purchase of two-hour USDCAD binary option call contracts four minutes before expiry to recoup some of the knock-out losses. But, I'm not sure what the balance will be once the presently open positions close.

 

[expiated]

USDJPY would be an almost perfect candidate if the four-hour measures were bullish, but alas, they are not. Nonetheless, there are enough structural pros vs. cons that I'm going to go ahead and take a shot.

The USDJPY target was hit approximately 2½ hours after entry.

 

[expiated]

Tuesday | April 12, 2022 | 3:30 PM PST

AUDJPY is not painting candlesticks at the bottom of the four-hour price range, but just about everything else related to the pair recommends entering a long position, which is why I am buying the middle two knock-outs.

 

[expiated]

Wednesday | April 13, 2022 | 10:45 AM PST

Everyone of the instruments purchased yesterday has reversed direction in a significant way, yet the Aussie pairs and USDCAD knock-outs all sold to close for a profit at their respective take profit targets, as USDJPY did yesterday (before their most substantial intraday reversals took place)...

Consequently, my plan is to raise the stakes/take-profit target to eight pips, and then continue to raise the figure incrementally by two pips at a time until the "two middle knock-outs" approach I'm currently using begins to fail.

In glancing at my charts, I noticed that the proprietary 60-minute dynamic/adaptive price range envelope on my five-minute charts is closely approximated by the standard 45-minute moving average envelope at 0.13% deviation.

It is also clear that the 20-minute baseline is too unstable to be trusted, which surprised me, because when it comes to intraday trading, I regard the 20-minute trend as king.

In all likelihood, I think that this opinion might be the result of trading 20-minute U.S. index binary options. So then, this leads me to conclude that the 20-minute baseline is wonderful for making forecasts of 20 minutes or less, but once one goes beyond that relatively limited time frame, it is the 45-minute baseline that takes over as the reigning monarch.

Combined with the success of yesterday’s binary option call contracts, the demo account balance is once again back above $20,000.

Reversals off the four-hour price range support/resistance levels, as conveyed by the 20- and 45-minute baselines, that are aligned with the slope of the 19-hour price-flow envelope, look to constitute entries with the highest probability of yielding successful outcomes. So, it is on this basis that I will try to make today trades.

 

[expiated]

Unfortunately, I will not have time to stick around to wait for the 20-minute baseline to cross below the 45-minute baseline before I sell AUDUSD, which is the RIGHT way to do this, but I hope to see it work anyway...

I also bought USDJPY. I was going sell GBPUSD as well, but just now, when I went to submit the order, I noticed that the 19-hour price flow is beginning to drift upward, so I nixed that plan.