About adding a little bit of risk to bull spreads ~ forex trading optionshouse

11:54 PM in a, about, adding, bit, bull, double, e, Forex, h, happened, hockey, little, of, risk, spreads, sticks, the, to, today, what

Ok Clients, Remember...

This is a different way to trade so if you are not comfortable doing what I am getting ready to layout, you dont have to nor should you. Its all based on how you want to manage your account.

I see a lot of new traders averaging down to try to "BE RIGHT" on their trade. This method blew out 9 of my accounts in the past and I highly suggest NOT doing it with one exception. Bull Spreads. A trader can do this effectively on bull spreads because you know your max risk.

This is about the safest way to "Average Down" because you know what your max loss is. Still remember that averaging down is not for the low funded account. Try it on demo if you are inclined
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Everything I am going to talk about is based on the "Wally World 6 Million" trade below

Daily 415pm Expiration 16000-16400             16030  16036
Daily 415pm Expiration  15400-16200            16002  16007
Daily 415pm Expiration 15600-16000             15980  15985
Daily 415pm Expiration 15600-16400             15995  16000
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If I am going to buy 16000-16400 and sell the 15600-16000 then I want to get the closest price possible to the floor, right? well right now the price shows 16036 which is 30something points higher than the actual underlying price.

If you want to trade 7 contracts but you want to minimize your risk. You can place buy orders:

Buy 1 @ 16036 This will put you in the trade.
Buy 1 @ 16026
Buy 2 @16016
Buy 3 @ 16006

Your average price will be 16016.

Your max risk will be $112 for 7 contracts. You can know that you wil not lose any more than $112 if your trade fails.

Each point will be worth $7 so if price moves 50 points in your favor, then your profit will be sitting at a $280 profit. If price does what it did Thursday and over 300 points in your favor, you will be sitting on a profit of $2,100

If price falls 300 points against you, your max loss is $112.

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How to calculate Take Profit Levels on Nadex Bull Spreads ~ forex trading or stock trading

11:05 PM in a, about, adding, bit, bull, calculate, Forex, how, levels, little, nadex, of, on, profit, risk, spreads, take, to

It is really simple. I will not over complicate it. There are several hour long webinars out there on the web that shows how to do this but I will tell you in a few short sentences. Nadex profit and loss is equal to $1 per tick. What is a tick? It is the LAST digit on any bull spread. If the Gold price is 1299.6, then that last digit (6) is what you want to look at. If the Wall Street 30 price is 16430, then the last digit (0) is the digit you want to watch. When calculating your TP, all you have to do is erase the point, if there is a point in the quote such as the one in the Gold price at 1299.6 If I want to calculate at what price a $30 profit means, lets pretend I am selling, then this is how you do it... 12996 (take out the point) MINUS 30 = 12966. Then add the point back in. 1296.6 1296.6 is the price you want to take profit at to make a potential $30 profit. Lets look at the Wall St 30 at a price of 16430. If you sold it at 16430 and wanted a $45 profit, where would you set your TP at? 16430 MINUS 45 EQUALS 16385. 16430-45= 16385 So 16385 is where you want to buy it back. So what about buying? how do I calculate buying? Answer... Just ADD instead of SUBTRACT If I want a profit of $30... 16430 PLUS 30 EQUALS 16460. 16460 is where you set your TP And on the Gold trade, if I want a $30 profit when buying... Remember to take out the decimal. 1299.6 will become 12996 12996 PLUS 30 EQUALS 13026. Add the decimal back in... 1302.6 is your TP price. Thats it.
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Look Deeper ~ forex trading on sunday

5:19 PM in bull, calculate, deeper, Forex, how, levels, look, nadex, on, profit, spreads, take, to

Clients,

This trading week has proven to be somewhat difficult. If you followed every signal to a "T", you netted a $9 profit per contract. This is right at break even and not great but it is not a loss. We will have a loss at some point but this week was not it.

Many clients that come to me are victims of scam artists. One of my key concerns is to stop the bleeding, like I have said in an earlier post. Some people have told me they were just draining money out of their account week after week after week. Even though we did not have a great week, you still did not lose for the 4th week in a row if you followed the instructions.

I know for a fact that some are not following instructions and did lose money this week. There is nothing I can say or do about that. You have to learn to follow a plan of some sort, whether it is mine or your own. Stick to a plan, and you can start the healing process and stop losing money.

One client sent me an email this week and said something of this sort, " Ryan, today was the first day I stuck to my plan and it feels great." Of course it feels great! Knowing that you accomplished something is the best feeling in the world. Knowing that you are treating this like a business feels awesome!

Now, from experience, here is what is likely to happen in the future. One of you will be trading live money and not following the rules. After a couple of months of losing money week after week, you will decide to follow the rules so you will stop losing money in your live account and open a demo account. for 2 weeks, you will trade on a demo and those 2 weeks will be the same weeks I lose money. You will get pissed off and stop following the rules and go back to live trading and gambling and losing money again.

Dont let this happen to you! This DID happen to me a long time ago.

Look Deeper.

Step back from the markets and take a look at your life. Where do you want to be in 5 or 10 years? I never have heard a person who seeks to be a doctor in 3 days. Treat trading as a long term commitment just like a profession because that is what it is.

Take each day and throw it away. After the day is done, forget about it. Look at the long term picture. Over the past 4 weeks, I have been getting messages asking me when the next trade is coming or when I was going to start sending more trades. There has been a lot of downtime. But just step back and look.

In the past 4 weeks, we have netted a profit of $176.5 if you traded one contract.

This is better than losing. Much better.

Over the coarse of one year, this nets $2,118 in profits. On a $1,000 account, this is a $21% return. Where, other than trading, can you get a $21% return on your money? A bank? nope. A hedge fund? Yes but what do hedge funds do? They trade.

Many traders have ping pong tables and TVs in their offices. Why is this? It is to help keep them from over trading and compensate for boredom.Trading can and usually is a very boring business. If done right, it is boring.

You can not look at 3 days of losses and give up. This week, we had 2 winning days and 3 losing days. That is perfectly fine. ALWAYS look at the long term. weeks and months. Success can not and never will be able to be defined by a few days.

Before you take another trade, If you are not trading according to the signals and have no clue what to do, stop everything. Close your computer or trade on DEMO for awhile. The market will always be there. Trade on demo for a few months and only take the signals and see what happens.

Can you sit on your hands and let the market work for you?
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All that being said, I posted an equity chart and a few excel worksheets on our facebook group, facebook,com/groups/nadex about the money earned over a course of time. Take a look at that and sit back.

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You guys are great! See yall next week!








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