Trading 15 Minutes a Day/Night: Expiration Trend Collection on Nadex Binaries
It’s possible that you have discovered the joys of trading binaries, but you still have a life and it’s probably a very busy life!
Perhaps you have a very limited time when you can trade. Maybe it is only early in the morning before work or before school. Maybe it’s at night after work. Even if you only have 15 minutes, whether it’s day or night, here’s another strategy that you can put in your tool trade arsenal.
This is the ETC and this time it doesn't stand for et cetera! ETC stands for Expiration Trend Collection. In another article, the strategy of the EPC, or Expiration Premium Collection strategy was discussed. To read that article, click HERE
This strategy is the exact opposite, except for the fact that it is also done during the last 15 minutes of the trading hour on Nadex. An ETC is always an Out of The Money (OTM) binary, which means it has lower risk because the market has to move for you to profit. On an EPC, where you would buy a binary at $75, with an ETC you would SELL the binary at $75. You are saying that the market is going to move so much in those last 15 minutes that you will profit. Sure, the ETC will have a lower win rate than the EPC, but it offers higher rewards.
Let’s think about this.
If you are entering the trade at $75 on a sell contract, your risk is only $25. You want to make sure that you have sold a close OTM contract so that you have a chance of making a profit. You can exit the trade when the market hits the strike price and since the trading price is usually around $50 at that time, you would have a profit of $25. You could continue to hold onto your contract until expiration and possibly collect a better payout. If you choose to do this, you would want to be sure to manage your risk by trailing your stops.
Another thing you could do, would be to sell two contracts and as the market reached the strike price, exit out of one and hold on to the other one. Be sure that you test this in demo until you have a handle on how it works.
This same strategy could work if you were to BUY Nadex binary contracts, too. You would just reverse the situation and buy at around $30. Again, you’re buying an OTM close contract with a low risk. You are, in fact, saying that the market will move above the strike price by expiration, which is 15 minutes away. This gives you a profit potential of $70, but the market MUST move in your favor for you to be profitable. Let’s plug in some numbers to help you wrap your head around this strategy. Let’s say the market (Wall Street 30) is trading at 17110.6 at 2:45 p.m. and you get a buy signal. Volume exceeds expectation, and there was an up close bar followed by a bar that broke that bar’s high. At 2:45 p.m., you buy a Nadex binary contract Wall Street 30 >17114@ 3PM which means that you believe the market will be above 17114 at expiration in 15 minutes. You buy the binary for $33. Your risk is $33 and your profit potential is $67.
This type of trade has a lower probability, but that is offset by a higher payout. The ETC strategy is a way to make money on movement because if the market doesn't move in your favor, you won’t make money. When it does move in your favor be sure to manage your risk, however small, by trailing your stops and locking in your profit. Again, be sure to practice this in demo before trying it out live.
To learn even more successful strategies to add to your trading arsenal, 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 rooms, take advantage of trade signal services, have key indicators and access the Apex Forum. The forum content is updated daily and includes over 7000 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.
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