Nadex Trade of The Day- The Caret Trade

TradingPub Admin | February 23, 2015

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By Sean Jantz, Founder

Binary Trade Group

If your work schedule doesn't permit you to trade during the day, here's a trade that you can make almost every day on your lunch break. Many traders avoid  trading at lunchtime because there is just not much volume in the market. With Nadex Binary Options, the lunchtime "Caret" Trade allows you to take advantage of declining lunchtime volume on the S&P 500 Futures  market.

Quite often, after a busy morning session, volume on the S&P 500 has a tendency to start declining, usually after 10:00am EST. The market, which has been grinding upward hits resistance, and then starts forming an upside-down "V" pattern. I call it the "Caret" trade because it resembles the "^" symbol above the number 6 on your keyboard.

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ES Trading Chart

In today's lunchtime trade, the "Caret" trade is in play. The market started moving upward after 10:00am as volume declined. At noon, the market hit resistance on the Keltner Channel and the indicators on the Fisher Transformer were lined up overbought. A reversal Star candle signaled a potential reversal. Sure enough, it happened:

ES Day Trading Chart

The market started to reverse with a strong SELL signal on the Fisher transformer. The following order was placed:

Trade Details:

Contract: US 500 (Mar) >2107.3 (1PM)

Expiration: Mon Feb 23 13:00:00 EST 2015

Direction: SELL

Quantity: 2

Price: 20.00

Two contracts were being sold, with a maximum risk of $160 and a maximum reward of $40 for this deep in the money trade. Now it's time to see how this trade played out on the Nadex charts:

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The Caret Trade

Vertical lines were plotted on the Nadex chart (above) denoting the 11am-1pm time frame. As you can see, the 2107.3 strike price chosen was well above the peak of the market, and when the market reversed it was time to kick back and enjoy lunch.

The trade settled in the money for full profit of $40 at 1:00pm, less $3.60 in exchange fees.

About Sean Jantz:

Sean Jantz is Founder of The Binary Group (BTG). He trades mainly Binary Options using the NADEX exchange. Additionally, he makes LIVE Calls on opportunities for members of the BTG private Facebook group on a daily basis, along with other BTG instructors.   BTG provides new and experienced traders with daily training sessions for trading Nadex Binary, and has helped so many in honing their trading skills.

More information about the Binary Trade Group

See This Trading Education Video of Sean Jantz Breaks Down Today's "Caret" Trade

If you would like to learn more about Nadex, or how to trade  Binary Options, please check out our free video library and learn why this may be an interesting new way for you to diversify your trading portfolio.
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The Trading Pub Team