This morning, while trading the FDAX, it was moving in a congestion pattern on the 3 minute chart with a congestion above price at 10004, so I pulled up the Nadex Binary Options knowing it would probably stay below the congest dot. The 45 minute chart showed a magenta peak that would potentially move down to the 9984 area. The 12 minute was making lower highs. The binary windowshowed the probabilities were that price would close below the 10004 area. I sold the option believing that price would indeed close below the 10004 area. It did and I locked in profits of $30 per contract. (You can click on the chart to expand the view.)
Trading the FDAX
Now let’s look at what it all said to me when I put it together:
- 45 minute showed downward movement
- 12 minute was showing lower highs
- 3 minute showed a congestion area of 10004 to 9996
- Nadex Binary Options showed a 30% greater chance of it closing below 10004
Going against the 3/12/45 indicators and the probability that the Nadex Binary Option was showing didn’t make sense. I let the option expire at 5:00 am for the full $30 per contract.
Trading the Nadex Binary Options re-enforces good trading habits. For example, I still document every trade. I still capture my screenshots. I still make sure the setups are valid. The biggest difference is instead of sitting in front of the screen waiting for the setup, I know to start looking at the top of the hour now. I can actually manage my time more efficiently, which is nice and build in a ten minute break every hour to clear my head.
In other words, by trading the Nadex Binary Options, we have just a little bit more control of our time but risk is capped.