Overnight Binary Trading Pays Off Even With Slight Mistake

It is always nice when you have an overnight trade that you can cash in on sooner than you anticipate when you set the trade up. This was the situation for a trader who recently posted what he learned and how he profited while trading an overnight news related trade.

Right around 6 PM, when Nadex opened, Trader A set up strangles on oil, since the Oil Inventory report was to be released the next morning at 10:30, USD/CAD and EUR/USD. Oil prices impact the USD/CAD and there were other scheduled news events. FOMC Meeting minutes and other news would probably affect the EUR/USD. After consulting his News calendar, he decided that strangles would be the best strategy for this trade and entered his trades with 2:30 PM expiry for Oil and 3 PM for the two Forex pairs.

At 6:12 PM, the trader bought 10 contracts at 19.50 of USD/CAD > 1.4040.

At about 1:00 AM, being half-asleep, he received an audible alert on his phone informing him that USD/CAD had just hit a 12-month high at 1.4039. He knew that was very near one of the strikes for his strangles. Even in his current state of sleepiness, he nevertheless checked on his trades. He had covered the losing side of the strangle and had a nice profit, but it hadn’t quite reached his take profit order. Then panic set in! Trader A realized that he had bought the wrong expiry. His trade would expire at 11 AM instead of 3 PM as he had planned. Because he was only $4 shy of his take profit target, he decided to cash out and walk away with what he had already profited on that instrument.

At 1:08 AM, the trader sold 10 contracts of USD/CAD >1.4040 at 48.00, for a $285 profit, not including trading fees. Ten contracts sold at 48.00 equaled 480. Ten contracts bought at 19.50 equaled 195, so 480 - 195 = 285.

The image below shows all of Trader A’s trades along with his take profit working orders. The bottom portion of the image shows the news information he used to plan his binary trading strategy.

He then amended the remaining leg of the strangle to near the price where he had bought it, in case the price retraced.

Making this kind of mistake is embarrassing, but common. However, it happened and for Trader A, it all worked out in the end.

Learning to trade involves making some mistakes. It has been said that in trading, you either win or you learn. Apex Investing offers free education and a trading forum of traders helping traders. Visit www.apexinvesting.com where you can learn how to trade Nadex binary options and spreads as well as futures, forex and CFD’s.