NADEX runs with a proprietary trading platform. Because it is regulated, this platform is constantly monitored. Safety and security are very serious focuses for this company, and their software is perhaps the most trustworthy that you will find. They are under the full coverage of the U.S. government.
NADEX Trading: How it Works
NADEX is a slightly different type of binary options trading experience than what you may have seen in the past.
Depending on the asset that you access, you will see a variety of choices for how to trade, but every trade you will be faced with, NADEX will give you a maximum amount that you can earn and a maximum that you can lose.
Your job as a trader is to predict an outcome that has a strong chance of being profitable and reduces your chances of losses to as little as you can get them, while maximizing your chances of earning money.
For your peace of mind, NADEX’s trading platform is very simple and straightforward. Trades can be established and monitored from a single screen, ensuring that the process is quick on your part so that decisions can be made with as little hassle as possible. Although this is a slightly different type of trading, the way that the software platform is set up, the differences are minimal.
You will need to adjust the math on some of your analysis and risk management techniques, but this is a simple change and you will learn how to make these adjustments with some experience. Using the NADEX demo account platform can help to speed up this process.
NADEX provides their traders with a lot of tools to help them succeed, such as charts and technical analysis indicators. They also have a lot of different types of trades that many brokers don’t offer, such as an ability to predict economic events, such as what the Federal Reserve will do with upcoming announcements, what the jobs reports will say, and how political events will turn out. This gives NADEX traders a lot of flexibility that other sites do not.
What’s an Exchange?
You may have noticed in the name above that NADEX is an exchange. What does that mean to you as a trader?
At an exchange, you are buying options contracts from other traders who have placed them for sale. You can also choose to create and sell options contracts if you wish, too. The winning side of the trade earns the return that was agreed upon before trade execution.
Binary Options Exchange vs. Binary Options Broker
This means that when you have a losing trade, it’s not the broker who profits, but rather the other trader. NADEX makes money by charging a normal fee with every contract bought and sold. It also encourages traders to look for the best deals possible as there is no manipulation of contract prices, but everything is determined by real people like you. It creates far more in terms of opportunity, too.
This is opposed to a binary options broker, where you have unlimited access to trades because the broker backs every trade you make. You are not purchasing an option from another trader, but rather from the broker itself.
In many instances, an exchange gives you more freedom than a broker does thanks to the customization capabilities that you gain. It also has some downfalls. For example, if you wish to sell an option an no one purchases it, your trade is not completed. This doesn’t happen often, but it is a possibility. It eliminates your chances of making a profit in some cases, but it also eliminates your chances of losing money. Is it inconvenient? Sure, in the rare times when it happens. But it can be a blessing in disguise.
How Does the NADEX Trading Platform Work?
The NADEX platform allows you to trade options for as little as $1 per trade, depending on the kind of returns you hope to receive.
If you have experience in the binary options world, one of the first things that you will notice with NADEX is that their trades are structured differently than the European style options you’ve been exposed to. Rather than a structure where you are trying to predict if the current price of an asset will go up or down over the stated timeframe before the expiry, earning an agreed-upon rate if you are correct in your prediction, NADEX options are a little different. Here, you will be asked whether the price will be above or below a given point upon expiry.
In this respect, NADEX is very similar to other binary options brokers. But instead of risking a certain amount, you need to select a payout. If you choose to have $100 returned to you for a correct trade, you might need to risk $60, if the trade if more likely to be successful. Unlike with other brokers, you need to confront the issue of spreads at NADEX.
NADEX also allows their traders more control over the trades they execute. Unlike other brokers where you take out a trade and hope for the best, NADEX allows their traders to end their positions early in many cases in order to cut their losses or to realize their profits early. This is a good risk management tool to have in your bag of tricks if you are an experienced trader and know how to use it properly.
NADEX Mobile App: Trading on-the-Go
NADEX also offers mobile trading. They have a platform available both on tablets and on smartphones, making the use of their platform ideal for busy individuals on-the-go. One of the few drawbacks to mobile trading is that some individuals find performing detailed analysis difficult to do on their mobile devices.
NADEX Spreads: How Do They Work?
NADEX offers spread trades for their clients. This is a different way of trading than the binary options that you might be used to, and as such, there is a certain amount of curiosity that traders often have when dealing with them.Some traders jump in headfirst and lose their money trading on spreads because they do not have the knowledge or the expertise to be successful with them. Many other traders avoid spread trades altogether because they are a different type of trade than what they’re used to.
You don’t need to fit into either of these extremes. Instead, we urge you to learn what these trades are and practice with them in a demo account. This way, you can have some level of expertise with them, and when the right situations pop up, you will be more likely to trade these instruments with success.
NADEX vs. Forex: What is the Difference?
First, let’s get an important distinction out of the way. If you have experience with Forex trading, you may think that you’ve already gained mastery over the concept of spreads.
However, the type of spread that is present at NADEX is a very different thing than what you will find at a Forex broker. When you are Forex trading, you will find two different prices for an asset: the bid and the ask. When you buy a currency pair, the price will be higher than the price that you can immediately sell that pair at. In order to make a profit, you need to wait until the price moves enough that this difference is overcome.
At NADEX, spreads are set up in a very different manner. Here, you are given a range of prices—a spread—of where an asset will finish in price. This establishes a floor for how much you can possibly lose, and a ceiling for how much you could earn if things go well for you. This range gives you protection against losses, which is a beneficial risk management move, and it gives you a cap on how much you can earn in exchange.
Let’s say that you are focusing on the GBP/USD currency pair, and the range 1.1000 to 1.1250 is given. Even if the price of this pair drops below 1.1000, this will be the price you are given. And vice versa for the upper end of this spread.
Now, you establish a contract. Let’s say you think the price will drop for this pair. You create a contract where you are selling the pair. If the price does drop, then you will earn the difference between what the strike price was and what the expiry price was, multiplied by your risk and the leverage that you assumed. You can also buy existing contracts from other traders.
What you do is based upon the analysis that you conduct and where you think the asset’s price is headed. In this respect, it is similar to a traditional binary option. In other ways, it is very different.
Trading NADEX Spreads: The Strategy
You have probably realized by now that NADEX spreads require a very different approach than if you were to stick with the traditional binary options market or trade in the Forex marketplace.
How do you develop a working strategy trading spreads at NADEX?
First, learn the material. Go over their tutorials so that you are familiar with the process of executing trades in real time. Practice with the free demo account so that you are able to make trades quickly and without making a mistake.
These are the very first things you should do on any trading platform, whether it’s a broker or an exchange, and regardless of the trading instruments that you will be using. You need to ensure that you can flawlessly navigate the websites you’ll use, and make trades without error, all without spending too much mental energy remembering which buttons to push and where they are located. This takes time and practice, but it’s a must if you want to give yourself the best chances you possibly can.
Next, consideration needs to be given to risk. If you’re using leverage, are you using too much? If your trade turned out to be a worst-case scenario, are you okay with losing that amount of money? If no, then you need to make some changes so you are not overextending yourself and risking money that you shouldn’t be risking.
Finally, evaluate whether your chances of success mathematically outweigh your chances of profiting. If you can see a trade going in either direction, but you stand to lose slightly more than you could earn, basic math says that given enough scenarios of this occurring, you will lose money.
Situations that are not mathematically friendly to you should be avoided. These math skills will be something that you will want to develop if you do not already have a firm grasp on how these things work. The Learning Center at NADEX can get you pointed in the right direction for where to get started here. There are also plenty of resources out there on the web that can help you learn some of the finer points of the math needed to evaluate yourself as a binary options or spreads trader.
There are literally an endless number of strategies out there for trading NADEX spreads. Find a few that make sense to you, learn them as well as you can, and practice them over and over again.
That might not sound too glamourous, but this is one of the most reliable methods of making money trading here that you will find. And because this doesn’t involve an automated trading method, and because it doesn’t have you blindly following a set of rules, you are more likely to gain a deep understanding of how spreads work, and this knowledge can be applied to different situations. Hopefully, this will help you to be a profitable spread trader.
Does NADEX Have Auto Trading?
Automatic trading, or trading robots, are becoming very popular new methods of trading. Here, signals are plugged into a computer and trades are made are for you automatically. This, as you might have guessed, seems to have a ton of potential.
All you need to do is plug in what you want the robot to do, and it does it for you. However, this isn’t all that it might seem. Let’s take a look at some of the things that a trading robot does, and where NADEX fits in with this.
It might come as a surprise, but NADEX does not offer automatic trading for their traders. There are a number of reasons for this. For one, auto trading has the potential to be in conflict with local regulations. In order to fully protect themselves and stay 100 percent compliant, NADEX does not offer this service.
Auto trading also has the potential to drastically increase the risk that you take on. While many traders benefit greatly from this, a good number of traders also lose a lot of money. Just because you are using a trading robot does not mean that you are going to make money automatically.
Unless the signals that you use are excellent, you are likely to lose money. NADEX recognizes this and has taken steps to protect their clients.
NADEX EDUCATION: Learn How to Trade
NADEX has a lot of tools that will help binary options traders to improve their skills and have a better success rate, even without using a trading robot. These skills are a must if you want to stay in the marketplace for an extended period of time, whether you use a trading robot, or you are executing each trade on your own after researching the positions that you are thinking of taking. Enhancing these skills is a priority for NADEX, and it should be one for you, too.
If you want to be a successful trader, you need to keep learning. NADEX has a very thorough educational section on their site. Using this is a must if you want to keep growing as a trader. Gain these skills is far more time intensive than using a trading robot, but it is going to help you to grow your skills as a trader and give you the background that you need if you want to be successful over the long haul. It’s also going to give you a far better likelihood of being in the market earning money a year from now than if you were to blindly make trades without knowing what you were doing.
At NADEX, tools like webinars, video tutorials, trade examples and walkthroughs, and guidebooks for binary options trading and using the platform are all easily accessible. They also have an archive of past webinars for their traders so that you can go back and watch past webinars and get caught up on the skills that were examined.
NADEX also offers their traders access to market commentary, news events, and a glossary so that if terms that you are unfamiliar with are covered, you don’t have to worry about missing out on educational content. They also have more in depth courses to take advantage of if you really want to make the most out of your binary options learning and expertise.
NADEX Demo Account: Put Your Trading Knowledge into Practice
The skills and concepts that you learn at the NADEX Learning Center need to be tested out before you are likely to apply them with uniform accuracy. The free NADEX demo account is a feature that you will definitely want to familiarize yourself with if you want to improve as a trader.
Here, you can practice the skills you learn through the NADEX Learning Center and test out new ideas of your own. Demo trading involves no risk to real money as you are trading with fake money, but you get to use the actual Nadex trading software while you practice. This is a great way to get the experience you need to be more successful, all without gaining it while losing real money.
Demo trading doesn’t replicate real trading exactly. There are no emotions in demo trading, and you are not going to feel the same loss losing $100 in fake money as you would in losing $100 of real cash. However, with demo account practice, you are going to be better at using the software you will be using from here on out and reduce your chances of making a silly mistake. You will also gain more experience with the strategies you’ll use in your every day trading routine once you switch over to real money, and your mastery over these concepts will be much higher when the stakes are real.