With the advent of high-frequency trading (HFT) and complex computer algorithms, many veteran traders find themselves on the outside looking in. Men and women who used to be successful, whether in the pits or on a computer screen, doing painstaking analysis by hand, often find themselves missing fast moving markets while designing their trades or getting run over by the same fast movement once they do catch one. There are a couple of solutions to this.
One thing veteran traders must start doing is shirking their risk and expanding out their duration, or the time frame of their trades. Old-timers may be used to 1 minute or 5 minute charts, but the short time-frames are one of their problems. HFT, by its very nature, takes advantage of ultra-short-term inefficiencies in markets (along with some preferential treatment by exchanges). When a trader swims in those waters, they are swimming with the exact same sharks that attacked them last time. They BECOME the part of the inefficiency that HFT exploits. Moving out to longer term charts and taking trades that look for much bigger moves with much smaller positions, helps to solve this. It’s the equivalent of swimming in a pool aboard a luxury cruise liner that is floating in shark infested waters. They are there, but they are not getting to you unless the whole ship sinks
Enter Nadex binary options and Nadex Spreads. The trader’s lifeboat, so to speak. The limited risk and un-leveraged positions that you place when trading on Nadex (an exchange fully regulated by the CFTC) will not keep your boat from sinking, but they will limited the damage and float you to safety where you live to swim (trade) another day. Binary trading at Nadex is a beneficial and useful skill to master for any level of trader. Remember, you are the captain of your ship, so be responsible with the risk you take, and avoid becoming chum in the water.
Futures, options and swaps trading involve risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results