How to get Started with Call Spreads

Step 1 - Get hands on experience.


Hands typing on laptop

Call spreads, as described so far, are unique to Nadex and, as such, the only way to experience these contracts is provided by Nadex. Trading involves risk though. Which is what makes it exciting. As with anything that involves risk it is best to start slow. For example, it wouldn’t be a good idea to get in the ring with a professional boxer, if it is the first time you have ever put on gloves. And you probably wouldn’t jump out of a perfectly good airplane without first taking at least a few skydiving lessons. Neither of those would be good ideas and jumping into the markets without practicing your craft or understanding what you are doing is not a good idea either.

Thankfully, you can get a free and risk-free, lifetime Nadex demo account. This account will allow you to practice your skills and get a firm, first-hand understanding of exactly how these contracts work.

Now, a practice account will never teach you how to trade, only risking real money will give you that full experience, but you need to start somewhere.

Get a good understanding in the demo account and when you are ready to embrace risk with real money, we will be here and happy to help you get your live account established.



Step 2 - Choose your market.


Identify what markets you want to trade. Do you want to trade currencies? Maybe you want to trade stock index futures? Commodities? Maybe you don’t even know. And that is fine.

If you’re in your demo account, try them all and see what markets meet your preferences.



Step 3 - Choose your direction.


Once you have chosen a market, you will need to make a determination on direction. Is the market going up or is the market going down? Maybe you don’t have any idea what direction the market may go, and that’s okay, with call spreads there is a strategy for that scenario too (more on that later).

By the way, if you are already trading and feel comfortable in your market analysis, that doesn’t have to change. All you have to do is apply the same analysis with an understanding of how the contracts work.



Step 4 - Buy or sell?


If you think the market is going up, place your buy order.

If you think it is going down, you want to be a seller.

It is really that simple.



Step 5 - Monitor your position.


Monitor your position. Watch how it moves within the boundaries of the range. Look at the performance of the contract as the market moves, either in your favor or against.

Whether right or wrong on market direction, there are lessons to be learned from every trade and every trade, good or bad, can be extremely valuable.


Now that you’ve gotten a basic start to trading Nadex Call Spreads, let’s take a look at some simple strategies on the next page.



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