There are many vanilla strategies out there that traders attempt to make their own, but in fact most new and novice traders won’t take the time to learn all the nuances of a strategy. What happens more often than not is traders will take a portion of a strategy and attempt to be consistently profitable with just that small piece.
This doesn’t work of course, but with Nadex binary options a trader can actually make it work. The mistake most traders make is focusing their efforts on the trade entry then using the limited loss advantage of Nadex options to protect their money.
At Path Trading Partners, we strongly advise you learn ALL the components of any strategy (whether ours or someone else’s), but if you are only willing learn one piece, choose a strategy with targets and learn how those targets are generated. If you can learn how to generate the achievable targets of a particular method, you can become much more effective choosing strikes and expirations on your Nadex platform.
Your choice of strike and expiration is as important in a Nadex trade as direction, more important in many cases, as being correct on direction alone does not pay you. Direction only pays you if the underlying settles passed your strike in binaries and toward the floor or ceiling in Nadex spreads. If you can learn the targets of a particular method, you can pick binary options whose strikes are well short of the target and cash in as the market moves through your strike.
Be conservative, if you are not willing to be studious. We still advise you learn ENTIRE methods or strategies, but if you just won’t put in the time, then learn the part that matters most for binaries and let Nadex limited risk protect you from the rest.
Futures, options and swaps trading involve risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results