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Converting BO strategy to Nadex (or Forex)?


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#1 Jinch

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Posted 15 October 2017 - 03:14 AM

Going to read up as much as I can but looking for some real-world advice / experience....

 

We all know that standard BO trading is hampered by trading against the dealer. They have no reason to allow you to be successful long-term as it costs them money in most cases. Agreed?

 

So, if you have a successful BO strategy how easy is it to adapt it to work in Nadex or Forex? Presumably that depends on the strategy.

 

Here's an example using a fairly typical BO strategy:

 

5M chart

- if conditions are right at the close of a candle (let's just say it's no more complicated than an arrow saying "call" or "put"), I place a £10 trade for 5mins (approx 80% payout)

- if I win, great - I get £8 profit

- if I lose, I then trade the next candle at £12.50

- if I win that 2nd trade, I recoup the £10 lost on the 1st trade and end there at breakeven, and wait for the next setup

- if I lose, however, I then trade the next candle at £28

- if I win, I recoup the £22.50 and end there at breakeven, and wait for the next setup

- if I lose, I accept losses of £10+£12.50+£28, and wait for the next setup

 

So there is potentially a 2-step martingale involved, but let's assume the strategy was successful enough that the wins on the first candle outweighed the losses and made it worthwhile. Whether the strat is good / bad / indifferent isn't the issue here.

 

The advantages of BO with this strat are that:

- you have a fixed expiry time so know exactly when to enter a trade, how long before you get a win / lose outcome and when to enter the next candle if necessary

- you know exactly how much you will win / lose at all times, so can calculate 2nd or 3rd candle amounts exactly to cover previous outlay

- it doesn't matter what amount you're right or wrong by: a losing 1 micropip candle costs you no more than a losing 10 pip candle

 

I have no experience of Forex or Nadex but they seem widely regarded as much safer options for making long-term profit, as you're battling other traders and not brokers. However with a strategy like that above - based on black and white criteria and knowing exactly how much you need to trade to recover losses and how much profit you will make each time - I'm not sure if it can translate to Nadex or Forex.

 

Does anyone have any constructive thoughts on this? Or experience of adapting a martingale-style strategy to Nadex / Forex? Or best of all, a BO broker that loves you to win £150 each day and pays up without question (ha ha ha ha ha.......)?



#2 zozon

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Posted 15 October 2017 - 04:07 AM

 Nadex I do not know enough, but BO and Forex are fully compatible, if you has a successful strategy in the BO, it will most likely be able to adapt to Forex with minimal changes, I think in forex there is no need to martingale be involved, simple reason, the percentage of invested and earned money is different than in the BO.

 

Please read Trebor1645 post, which is very relevant to this topic. He applies his successful BO strategy to forex:

http://www.binaryopt...ategy/?p=133901



#3 Jinch

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Posted 15 October 2017 - 04:29 AM

 Nadex I do not know enough, but BO and Forex are fully compatible, if you has a successful strategy in the BO, it will most likely be able to adapt to Forex with minimal changes, I think in forex there is no need to martingale be involved, simple reason, the percentage of invested and earned money is different than in the BO.

 

Please read Trebor1645 post, which is very relevant to this topic. He applies his successful BO strategy to forex:

http://www.binaryopt...ategy/?p=133901

Thanks Zozon.

 

I've been following Feed The Ducks from early on and in fact the reason I was veering towards Forex is so that I could use your version of Ducks in a Forex environment.

 

So in terms of Forex, if I lose the first trade and need to recoup the £10 invested, I just let the next Forex trade run until I (hopefully) get into sufficient profit to cover that lost £10?



#4 zozon

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Posted 15 October 2017 - 06:50 AM

Thanks Zozon.

 

I've been following Feed The Ducks from early on and in fact the reason I was veering towards Forex is so that I could use your version of Ducks in a Forex environment.

 

So in terms of Forex, if I lose the first trade and need to recoup the £10 invested, I just let the next Forex trade run until I (hopefully) get into sufficient profit to cover that lost £10?

 

Theoretically yes, so why not try ....
 
I opened a new demo account yesterday with IC market, got 200 euros on it, just as much as Starting Deposit on real account, it's good, I can monitoring my money's behavior when trading with such a small initial capital...
 
If we use the Ducks strategy, it only needs to be caught when the trend changes direction, or pullback, it means 5 minutes TF, starts uptrend, as in the picture, the trigger line is MA20 - (Bollinger middle line), we buy, and sell when the candle breaks the MA20, or hit StopLos-5 pips / TP-15 pips...
 
There would be 20 pips profit on the picture ...
 
Why do not we try, what can we lose ...

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#5 Singh

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Posted 16 October 2017 - 01:50 PM

So if your question is whether you should use it on Nadex or Spot then my answer depends on what time frame you trade on how much intital money you are looking to start with. If you want to trade on 5m chart then yeah spot is not worth unless you have large account and you are doing scalping for 1 pip or so with 10 lots or so. Nadex can be good with this but then watch out for spread.

 

I would try it on hourly candle and trade 2hour expiry on nadex and then grow my account and switch to spot.

 

Singh


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#6 Jinch

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Posted 18 October 2017 - 04:01 AM

 

Theoretically yes, so why not try ....
 
I opened a new demo account yesterday with IC market, got 200 euros on it, just as much as Starting Deposit on real account, it's good, I can monitoring my money's behavior when trading with such a small initial capital...
 
If we use the Ducks strategy, it only needs to be caught when the trend changes direction, or pullback, it means 5 minutes TF, starts uptrend, as in the picture, the trigger line is MA20 - (Bollinger middle line), we buy, and sell when the candle breaks the MA20, or hit StopLos-5 pips / TP-15 pips...
 
There would be 20 pips profit on the picture ...
 
Why do not we try, what can we lose ...

 

 

So if your question is whether you should use it on Nadex or Spot then my answer depends on what time frame you trade on how much intital money you are looking to start with. If you want to trade on 5m chart then yeah spot is not worth unless you have large account and you are doing scalping for 1 pip or so with 10 lots or so. Nadex can be good with this but then watch out for spread.

 

I would try it on hourly candle and trade 2hour expiry on nadex and then grow my account and switch to spot.

 

Singh

Guys, thank you both for your thoughts / PMs. Your input has been invaluable.






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