Nadex Gold Investing Tips and Strategies

You want to speculate on the price of gold. However, you don't want to risk thousands and futures and options markets require a large capital investment. No worries. Consider using the NADEX (North America Derivatives Exchange) to speculate on the price of gold.

What is the NADEX?

The NADEX is a U.S. License and Operated Derivatives Exchange based in the United States. You can speculate on the hourly, daily and weekly price movements of gold, silver, Dow, S&P, Nasdaq, Currencies and Commodities. You can start your account with as little as $100. And you can make a big return in as little as an hour. However, if you want to speculate on gold, with the Nadex, it is critical to know what you are doing.

Trading on the NADEX

There are two ways you can trade gold on the Nadex.

• Binary Options - A binary option means you take a position that gold will close above or below a given price at a certain deadline. For instance, let's say you believe the price of gold will be higher at the end of the U.S. stock marketing trading day (4:15 PM EST). And the opening price of gold is $1450. You would find binary option that says Daily Binary Gold $1,450. And you will buy this option for $55. If gold is higher than $1450, you will receive $100. If gold is lower, you lose your $55. Binary options are available for hourly, daily and weekly expiration.
• Spreads - A spread is a price range that allows you to manage your risk. Let's say you believe gold will be higher at the end of the day. You can buy a daily gold spread with a price range of $1425 to $1475. The spread has a value of $500. And with the price of gold at $1,450, you buy the contract for $250. If the price goes over $1,475, you get $500. If the price is below $1425, you lose your $250. However, if the price is up slightly, let's say, to $1455, you get $275 in return for a $25 profit.

Before you trade gold on the NADEX, you should consider these tips. If you don't know what you are doing, you could lose a lot of money. However, if you use some common sense, you can make some consistent profits.

• Avoid all Binary Options - I would avoid the binary options because you usually have to pay $55 to win $45. And that means you need a 55% winning percentage in order to make a consistent profit.
• Avoid hourly contracts - While it is tempting to make a quick return , in one hour, you can burn through a lot of cash if you hit a losing streak.
• Use Weekly Spreads - Weekly spreads are the best way to investing in gold on the Nadex. You risk less and you have the potential to build a big bankroll with a little cash.
• Buy the higher weekly spreads during September - September is the strongest historical month for gold. This is the time to go for big profits. One way to make a big potential profit is to buy a spread that is just outside of the money. So, for instance, if the price of gold is $1,450 at the beginning of the week, then buy the $1450 to $1500 spread. Your outlay should be minimal (about $65). However, if the price of gold goes up $50 in the week, you get $500, a $455 profit. If the price of gold goes down, you only lose $65.
• Buy a weekly spread after a week when gold is down - We are in a gold bull market and gold rarely has a down week. But when it does, you should use this as an opportunity to strike. After a down week in gold, open a spread, where the price of gold is at the middle of the spread range. So, for instance, if the price of gold is $1,450, then you should buy the gold weekly $1,425 to $1,475 spread. Your outlay will be about $250.

The NADEX is a great way to speculate on the price of gold with a limited budget. Avoid hourly options and binary options. Use the weekly spread during gold seasonally strong period (September) and after a down week in the precious metal.

When you visit the NADEX, you can open a DEMO account and trade with $5,000 fictional dollars. Use the demo account as an opportunity to trade these strategies (or any trading ideas of your own) and see if the NADEX is right for you. With discipline and common sense, you can make a great return on a small amount of capital.