All posts by Michael Hodges

I am a long time trader with over a decade of experience. I am a big fan of social trading and think it is a great way to trade.

Demo Trading, Is It Worth Your Time

My Answer To The Question, Is Demo Trading Worth It?

I have to say that yes, demo trading is absolutely worth it. It is the best place to get real world trading experience, build your confidence, learn the mechanics of trading and a tool I still use today. Yes, the giant of technical analysis and trading that you see before you today is indeed a demo trader. I do it for a number of reasons but top of the list has to be for safety. Demo trading provides a level of safety for my real-money account that you just can’t get anywhere else. Why is this? It is because I know better than to experiment, test or make wild speculations with my real money; that’s what the demo account is for. Having the demo account provides a place for me to make those trades that don’t fit my general strategy, or are part of my learning experience, thereby providing a layer of protection from the market and from myself. When I see a trade working then I can try the same thing with real money.

Practice Makes Perfect

There are a number of reasons why demo trading is important. For a newbie it is important because it is where you learn the mechanics of trading. Trading demo answers a lot of questions, questions like what happens when I enter an order, what does it look like when it’s open, what does it look like when it is closed, how does my money management work, how does my money management affect my trades and many many other questions a newbie or inexperienced trader may have.

Look at the picture below, I chose it because it is a great example of how demo trading can help you get in synch with the market. How many hours of practice do you think these guys put in to be able to row that boat, how many more to be competitive? That’s what it takes to be successful at trading and that is what a demo account is for.

rowing-scullers

Once the mechanics are learned, the demo account does not lose its importance. It also provides a training ground and launch pad for trading real money accounts. The advancing trader can use the demo account to practice trading strategies, money management, learn and study the market until they know it inside and out. A friend of mine, Okane, recently said something that I have found to be perfectly true. Trading the demo account, and studying the market, can help you develop a kind of sixth sense that will lead you to more profitable trading. Ultimately that is why I like it, it helps you get in tune with the market.

I can readily admit that I am not always in tune with the market. Sometimes I have winning streaks, sometimes I have losing streaks. The demo account helps because when I realize I am on a bad streak, or just out of tune with market direction or churning conditions and volatility, I can switch and start trading there for safety. Then, when I am back in tune I can move my trades back to the real money account. Believe it or not this is a really valuable tool but one that requires a certain amount of self control to use.

Yet another reason I like my demo account is for accountability. It’s very easy to look at a chart and say, “I think the market is going up” or “I think the market is going down”. It is something else entirely to to say that and then act on it. Even writing it down is better than nothing but with a demo account it’s more real, you have points to keep track of and everybody hates to lose their points. You see the trade in the account, you see if it wins or loses and you see if your balance draws down. It may be a fake balance but losing points is losing points, if you want to win as a trader then you have to be able to win with demo money as well as real money.

Where To Find Quality Demo Trading

I use my NADEX demo account on a regular basis. NADEX trading is more complex than spot trading, and more rewarding, so I highly recommend traders start there first. To help, I’ve written two articles on how to make the most of your NADEX experience and fine tune the platform for best results: The Geek’s Tips For Trading NADEX Binary Options and NADEX Trading Tips; Your Account Settings And Execution Speed.

Unfortunately most binary options brokers don’t have quality demo trading. If they do it usually comes with a catch. Not NADEX, they are regulated and squared away, perfect for US traders, and just about anyone else. They have a foreign account for individuals from about 100 countries including the UK and many EU nations.

Investoo.Com Indicators; Good For NADEX Trading

Investoo.com Binary Options Indicator

Investoo.com is a website with a vast library of educational trading videos, indicators and signal systems good for a variety of trading styles. The service is based in England and registered with the FCS, number 82888880. A simple registration will get you access to the introductory level training videos while a one time uprage of $100 will get you the full package. Included are 3 MT4 indicator/signal systems based on PSAR, MACD and Stochastic and over 300 hours of videos organized into several courses targeting technical aspects such as candle sticks and strategy for binary options and forex traders. Click here for my full Investoo.com review.

NADEX Binary Options Signals

The goal of the website is to teach beginners how to trade, but they go far beyond that. Traders of any level can learn something from the videos and the indicator signals are a valuable trading tool. They produce easy to follow entry and exit signals that go hand in hand with the video lessons.

They are MT4 indicator plug-ins based on three standard indicators; Parabolic Stop and Reverse, MACD and what they call the binary options indicator but is really just stochastic (my favorite indicator). The indicators track prices and generate signals as they meet preset criteria, when used along with confirming and coincident indicators they perform pretty well. The caveat, and the website does not sugar coat it, is that false signals do occur, they offer no guarantees of wild success.

This is where the videos come in handy, they teach different methods of picking the good signals and weeding out false signals to help ensure win rates that will produce profits over time. I suggest using them to get least a basic understanding of trend along with the use of support and resistance levels.

In order to use the indicators for NADEX you will also need to use MT4. If you don’t have it it is an easy download as well but does not link to the platform. You’ll use the MT4 chart for basic analysis and signals that you will use to enter trades on NADEX. Once you download the indicators adjust to the time frame you like, the indicator will appear at the bottom and signals will generate in real time.

In order to use them to their fullest potential strategy is a must, simply following them blindly will not produce good results. Strategy includes things like only taking trend following signals. Expiry should be chosen based on the time frame of chart you are using. I suggest at minimum 30 minute candle sticks, I prefer one hour and one day for my trading, but they will work just fine with 2 and 5 minute charts for trading the 5 minute and 20 minute NADEX expiry.

click here to visit INVESTOO.com NOW!

investoo trading for beginners

For more information about trading NADEX, using the platform, using the demo account and adjusting the settings for lightning fast execution speeds you must read my articles The Geeks Tips For Trading NADEX and NADEX Trading Tips; Your Account Settings And Executions Speeds.

NADEX Trading Tips; Your Account Settings And Execution Speed

How To Win On NADEX

My NADEX advice? Open a demo account now and use it to practice my NADEX trading tips. In my first installment of tips for trading NADEX I went over the charts, using the demo, setting up the platform for ease, expiry and strike prices, buying and selling as well as understanding how the order ticket works. In this installment I will go over the Account Settings and Preferences and how they can be used to fine tune the platforms function to increase your execution speed, maintain money management/risk control and, hopefully, increase your profitability.

Click Here For My Full Review Of NADEX Binary Options Exchange

In trading, short term day trading and speculation like what we do at NADEX and with any binary options trading, it all comes down to speed. You have to get in when the time is right and then get out when the time is right, delays in execution can cost profits at best, and create losses at worse. The problem is clear, the need is clear, read on to find out the solutions.

NADEX Account Settings And Preferences

If you have any doubts about NADEX being set up for traders, and for trader satisfaction, they will be dispelled soon. There is a learning curve, don’t get me wrong, NADEX is a fast paced and semi-complex trading environment. Once you get past the entry level obstacles these settings will personalize the platform and specifically the order ticket/order process so that you can achieve ultra fast execution speeds. To put it in perspective, the basic mechanics of entering an order can take as many as 6 steps and a minute or longer for the inexperienced; Open the ticket, choose buy or sell, choose market or limit order (limit adds the step of price you are willing to pay) and then enter. With the right set up you can lower this to as few as 2 steps and under 5 seconds, a huge difference wouldn’t you say?

To find the preferences page go to My Account, click on Settings (under the Fund Account tab) and then click on Preferences. Here you will find 6 settings, these are what they are. . .

  1. The Flashes – The Flashes are those neat little blips of color that show up on the ladder (the ladder is that screen with the list of strike prices and bid/ask prices). Each time a new price is offered or accepted the bid, ask or both will flash. If price goes up it flashes green, if it goes down it flashes red. The setting here is for the flashes to be on or off. I personally like them but NADEX says they may impair performance so that is all the hint I need to turn them off. Every little bit helps, right?
  2. Order Type – Order Type, GTC/LIMIT or Market, could be the most important choice you can make for time saving. A GTC/LIMIT order is good because you can set a price you like and leave the order open until it fills, but it takes time to enter the limit prices into the ticket. A Market order guarantees a near instant fill but you may get a price you don’t like. At face value I prefer the GTC but with another setting, more details below, the Market order becomes my preference.
  3. Default Order Size – This is a gem of a time saver, and an awesome tool for your money management. You can set the default order size to whatever you want. The default default is 1 lot, I like to trade 10 lots because it fits my account size and % Rule (no trade is bigger than 3% of my account). By setting this to your preferred trade size you not only cut down on the time it takes to fill out the order ticket you are also taking the guesswork and emotional quality out of deciding just how many lots you should trade at this time.
  4. Market Order Risk Tolerance – This setting goes hand in hand with the Order Type setting. If you choose to use the Market Order you can set the risk tolerance to help control your fill price. The default setting is $10, this means that your market order will fill if the price is within $10 of the price at the time you entered the order. You can set it as low as $1 or as high as $25. I like to keep mine at $5, this allows a little leeway for price movement while I enter the trade but keeps it to a minimum. I sometimes miss fills but not as many as I would using the GTC feature. In terms of execution speed this doesn’t really increase it but it does make using market orders safer which paves the way to 2 click trading.
  5. Multiple Or Reuse Ticket – This setting affects how the order tickets are displayed. The Multiple Ticket setting lets more than order ticket to pop up at one time. This way traders who use advance strategies utilizing multiple positions, hedging, butterflies and condors to see each leg of their trade at one time. The Reuse Ticket setting is great for traders who may buy and sell or sell and buy the same position more than once during the life of the option. Once an order is sent the ticket stays up and can be used again to enter another trade on the same strike.
  6. Inactivity Setting – This setting doesn’t help execution speed but it does help with Internet security. Set it to as little as 1 hour or as much as 12 hours and the platform will log you off automatically.

NADEX, The Best Broker For US Binary Options Trading


Social Trading Binary Options

US=Yes
$250 Deposit
Regulated
NADEX
Full Review
NADEX Demo
Account
Visit NADEX Now!

There are quite a few brokers that allow US traders to trade binary options. There is only one best broker for US binary options trading and that is NADEX. If anyone, or any website, tells you different they are not being honest with you. NADEX is the only CFTC approved binary options exchange on the market that is serving retail traders like me and you. CFTC regulation is an important aspect to consider, for sure, but believe you me it is not the reason, or not the only reason, why NADEX is the broker you should be using.

Legal And Trustworthy – There are lots of trustworthy brokers on the market but that does not make them legal. Brokers like Tradorax, TradeThunder all accept US traders but they don’t provide the same protections for you and your money. An offshore broker may be reliable in terms of platform, trading and payout but without the backing of the CFTC there is still the chance of fraud and scams. At the very least there is no protection for you in case of complaint or dispute.

Further, since the off-shore brokers are breaking US law there is always the risk of being shut out, or them being shut down, even if they are operating on the up-and-up. Trading at NADEX is not like that. They are 100% legal which makes them safe and trustworthy with the backing of the US legal system to protect you. I’ve never heard of a single NADEX scam, or fraud, or case in which they took advantage of anyone, and if they did the CFTC would take care of it, and of you.

Better Returns – Offshore brokers tend to pay returns in the range of 70-90% on average with most coming in at the low end of the range. A very few will go higher, most will offer exotic style options like one-touch, range or boundary that have returns that count in the hundreds of percents, 300-500% is not uncommon but come with enhanced risk as well. NADEX binary options, when trading at the money strikes, return 100% on average with that going up to over 1000% when using deep out of the money strikes. On top of that, there is no fear of price manipulation, platform outages or any other discrepancy to prevent you from winning or cutting your profits short.

Of course, it is also possible to make returns that are less than 100%, using a strike that is already in the money may return only 10-50%, but these options also have a high probability of closing in the money … a nearly guaranteed return for the savvy trader. So, what’s better? Maybe getting 85% IF the platform works and the broker doesn’t cheat you or making 50-100% on a platform you know is legit?

The Trading Is Better – Trading at an off-shore broker is very limited. Your only option, no pun intended, is to BUY a call or BUY a put. Once you do the only thing you can do is sit back and wait for it to close, hopefully in the money, and hopefully without any price manipulations. Very rarely will you have the ability to close the position before expiry, and if you do even that option is limited to an “available window” which is dictated by the broker with diminished returns.

NADEX is much more versatile. First, there are no calls and puts, NADEX trades like spot forex, you can buy to open, and you can sell to open. If you buy to open you pay for the position and profit when it closes in the money. When you sell to open you GET PAID for the position and profit when it closes out of the money. On top of that either position can be closed AT ANY TIME with no limits and no “available” windows, for a profit if there is one or to cut losses when you need to. You can follow this link for The Geek’s Tips For Trading NADEX binary options.

Respect – Not only is NADEX a respectable broker, they respect their traders. When you join NADEX you become a valued MEMBER of the exchange, free to trade with other members of the exchange, and are not betting against the house. Off-shore brokers are more like a dealer at a back room gambling table, when you trade you’re betting against the house, and in the end the house always wins. They don’t respect you, to them you are just another mark whose money will soon be theirs.

NADEX is an exchange, you trade with other traders at on the exchange and NADEX makes a little money each time a contract is opened or closed. The offshore guys make money when you lose, all of your money, so they want you to lose as much as possible. NADEX wants to provide a high quality platform, for everyone to have a good time and do not use pushy marketing tactics, shady “account managers” or scam signal services to lure you in. If this is the kind of broker you want to trade with there is no reason you shouldn’t join NADEX now.

The Geek’s Tips For Trading NADEX Binary Options

Interested in trading on NADEX? Having a hard time figuring out how it works? This is my list of tips for trading NADEX binary options covering how to set up the platform for ease of use, picking strikes and expiry and using the features to their fullest potential. If you are new to NADEX or even not so new this is information you need. If you don’t know much about NADEX yet or if it is the right choice for you follow this link to the Geek’s Review Of NADEX.

The Geek’s Tips For Trading NADEX Binary Options

Setting Up Your Screen – The first thing you may have noticed about NADEX is that the trading platform and screen is a little busy, there is a lot going on. The first tip is to be sure you understand what you are looking at, and how to set it up for your use. What I want to make clear is that each section of the chart is an individual frame that can be added, removed or altered at will. You can change where each is located as well as it’s size. When you first pull up the platform it likes to display the “most traded assets” which I find to confusing to use. I like to pick an asset, in this example the EUR/JPY, and then click on the expiry I want to trade which will pull up a frame with just that asset and all the strikes available at that expiry. Other options for viewing are Open Trades and Working Orders which list which options you own, and which ones have orders yet to be filled.

nadex custom screen

Choosing Expiry At NADEX - Choosing expiry, and strike, are the two most important choices you can make when trading at NADEX. Expiry is a little less important because you can close your position whenever you want, if it is showing a profit you make a profit. However, if you want to hold the option until it expires and make the max profit the expiry time becomes more important. This will be dependent on your signal, and what time frame you are trading. I like to trade using end of week for daily chart signals, sometimes end of day, and I use the closest intraday for when I trade shorter term.

In the image you can see that expiry is listed as 11AM to 1PM, 12AM to 2PM and etc. This is the window in which the option trades, the 11 to 1 option opens for trading at 11 and closes for expiry at 1PM. There are also short term 5 minute and 20 minute expiry that open and close every 5 or 20 minutes. Each asset class has different expiry windows based on the open market times they trade, I recommend familiarizing yourself with the ones you like to trade the most.

choosing expiry at NADEX

Choosing Strike Price At NADEX – How to choose expiry at NADEX is the question I get most often. It can be confusing, there are a lot of choices, and if your screen is not set up for ease of use like I went over before it can be really confusing. As a rule of thumb, especially for those new to NADEX, I always suggest using the AT THE MONEY strike price when you take an active signal, be it one you derive yourself or one that you get from a service provider. Using the at the money strike most closely mimics trading spot style binary where your strike is the price of the underlying asset at the time of purchase.

You can find the at the money option easily by looking at the window of available strikes for the asset/expiration you are trading. See below. The price of the ATM option will be very near to $50 which means your return will be close to 100%, usually about 90%, much much better than the average 75% return of offshore brokers. If you feel strongly about the trade, you can pick an out of the money strike for a lower price, if you are less sure then pick an in the money strike for a higher price.

how to choose strike price at NADEX

Buying And Selling At NADEX - You may have noticed by now that all options are listed with a bid and an offer price. When you are selling an option you get the BID price, it is what buyers are bidding. When you buy an options you pay the OFFER price, it is what sellers are offering their options for. The difference is what is known as the spread, actively traded strikes, expiries and assets have lower spreads, less actively trading have bigger spreads. In terms of NADEX trading the spread is not too important, important but not the end of the world for you profitability, but it is a need to know item.

One more thing, when you are bullish at NADEX you buy to open, when you are bearish you sell to open. When you buy, you pay, when you sell, someone pays you. In the first case your profit per lot is the difference between the price you paid and $100. In the second your profit is the amount you receive, depending on if the option closes OUT OF THE MONEY (expires worthless for the person who bought it, otherwise your loss per lot is the difference between what you received in premium and $100)

nadex bid and ask spread

Understand The Order Ticket - There are a number of ways to pull up an order ticket. The order ticket is where you make the actual trade by choosing buy/sell, market or limit order and how much you want to spend. Regardless of where you click to get the ticket they all look the same, image below. Keep in mind that each ticket is for a certain asset, at a certain expiry time and a certain strike. If you want a different asset, strike or expiry you will need to pull up a ticket for that option.

how to use nadex order ticket

Making A Watchlist – Making your own watchlist can be very helpful if you like to trade multiple assets, or multiple expiries of the same asset. To do this all you have to do is click on the tab shown in the image below and then click on Add To Watchlist. There are other options on this drop down menu as well such as links to quick charts and order tickets.

nadex, how to add to watch list

The Charts – The charts at NADEX are quite good. They are fully functional and provide a view of the market in lines, bars or candles. Time frames run from tick data, to 1 second, 1 minute, 2 minute, 3 minute, 5, 10, 15 and 30 minutes, 1 hour, 2 hours, 3 hours, 4 hours and daily data. The charts also have drawing tools for support/resistance, Fibonacci and others. In all, there are over 30 drawing and technical tools. Tools include things like Ichimoku, MACD, Stochastic and moving averages. You can set up your charts however you like and save it for future use. Also on the charts, on the side of the screen, are listings of where available option strikes are in reference to asset prices, and quick links to order tickets for buying and selling.

NADEX charts

NADEX Demo Accounts - To help tie all of what I am about to go over together NADEX has a demo account. It is completely free, all you have to do is sign up, and it is fully featured. Every asset, every strike and every expiry is available to trade. The account is set up with $25,000 and allows you to experiment with the tools, trading and set up. If you haven’t already I strongly suggest you sign up a demo account now

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