Directional Trading With Nadex 20 Minute Binaries

A little over two months ago, Nadex launched 20-Minute Binary Contracts. Perhaps you have started trading them, either live or demo. Maybe you could use a couple of new ideas or just some pointers to reinforce your trading plan.

As a basic overview, a 20-minute binary is just that: a contract that has a 20-minute expiration. The contracts are currently available on the US indices from 9:40 a.m. through 4:00 p.m. Monday through Friday. On each of the 20-Minute binary Contracts, there are nine strike levels offered on each of the following markets: US 500 (underlying E-mini S&P 500) or ES; US Smallcap 2000 (underlying Russell 2000 mini) or TF; US Tech 100 (underlying E-mini NASDAQ 100) or NQ; and Wall Street 30 (underlying E-mini Dow) or YM.

Sometimes you may wonder why it is important to learn so many different strategies. It is just like many other things in life. If you play golf, you don’t want to have just one club. If you are a football player, you need different plays.

If you wear clothes, you require different types of clothing for different occasions. When you start out trading, you may concentrate on only mastering one trade, but you soon find out that the market changes and that trade doesn’t always work for every type of market. You need multiple clubs in your golf bag, multiple plays in your playbook, and plenty of strategies for your trading day.

You have to know how to read the market conditions. It doesn’t matter if you trade the news, but you do need to know what news is happening on any given day because it can and will affect the market. If it causes the volume to be high, the markets are going to move. If something is announced that makes the volume low, the markets are going to move less.

Twenty-Minute binaries move quickly, so knowing expected range of the market can be very advantageous for your trading. It can help you determine whether you want to choose an In The Money (ITM), Out of The Money (OTM) or At The Money (ATM) contract.

You may remember that an ITM requires a stop loss because you will have to get out of the trade if it moves against you. An ATM requires no stop loss, and you want to have a 1:1 risk/reward. An OTM contract requires exceeding volume, no stop loss, but you need to set a take profit order.

One of the main things to do when trading 20-minute binaries is to not get greedy. If you can get in and make $20 and get out, you can potentially do that three times an hour. If you think of that type of income in relation to stocks, and you buy a stock at $20 and sell it for $40, you consider that a pretty good profit. Have that as your mindset, and don’t be greedy, but also realize that you can do that over and over again, every 20 minutes!

Here is an example of a trade placed on NQ >4165.5 with a 3:40 PM expiration.

Click HERE. to view a larger image.

The trade was entered at the beginning of the contract, but exited prior to expiration with a profit of $25. Volume had exceeded expectations, the price was in the middle of the expected range and a downward trend signal had been given.

Here is another trade that was done at the same time as the previous one. You can see that they had the same expiration times, but were done on different markets. This one also met the necessary qualifications for a good 20-minute binary trade: volume exceeded expectations, price was in the middle of expected range and again, a downward trend signal had been received.

Click HERE. to view a larger image. 

Be sure that you look at the volume, where the price is and where the expectations are at. It has to be a good trade that meets your criteria. When trading, especially when trading fast-moving 20-minute binaries, you have got to THINK! You have to think about which one is the best one to trade and why. You can use the Apex Binary scanner that will help you find the contracts that you can choose from. It is available at Apex Investing Institute.

If you would like to learn other strategies to add to your trading playbook, go to www.apexinvesting.com. Apex Investing Institute offers free education, and free access to the Nadex Binary and Spread Scanner Analyzers. Member traders are invited to trade in the chat rooms, take advantage of trade signal services, use key indicators and access the Apex Forum. The forum content is updated daily and includes over 9000 members. In a supportive learning community of seasoned as well as up and coming traders, traders of all levels learn how to trade Nadex binaries and spreads in depth, as well as futures, forex, stock and options, and gain an edge for successful trading overall.