Bank Of Canada Set To Release A Statement. Get Ready With A Straddle Strategy

The Bank Of Canada is scheduled to release a statement this week. For the USD/CAD and the Bank of Canada, this is similar to when the Federal Reserve releases a statement in the US and the US markets move. This week at 10:00 AM ET, Wednesday, December 2, 2015, the Bank of Canada will give the Overnight Rate and Rate Statement. The actual statement contains much information including any rate changes, and reasoning behind their decision as well as commentary on the general economic conditions. Based on analysis of previous reports and market reaction done by the Apex Investing news team, a straddle strategy using Nadex USD/CAD spreads with a maximum risk of $40 can be a high probability trade.

Nadex is a US based, CFTC regulated exchange, which lists binaries and spreads for trade. Spreads are a range of a market with a floor and a ceiling. You cannot win or lose past the floor or the ceiling depending on which direction you trade the spread. With a straddle strategy, you trade two spreads on either side of the market set up to catch profit should the market go up or down.

You can enter this trade as early as 9:00 AM ET for 11:00 AM ET expirations. You need to buy the spread above the market with the floor being where the market is trading at the time. You also need to sell the spread below the market with the ceiling being where the market is trading at the time. You shouldn’t risk more than approximately $20 on each spread for a max risk of $40 on the trade.

It’s always necessary to demo a trade before doing the trade live. This news event is scheduled eight times a year, so you will definitely have another chance at the trade. Alternatively, it is a low risk trade therefore; you can practice execution and setup before the actual timing of the news event and then trade it live. That way you have some practice but you also know it’s low risk if the market doesn’t perform advantageously for the trade.

To find the right spreads easily at a glance, login to your Nadex demo or live account then open the spread scanner at www.apexinvesting.com. The spread scanner will display all the Nadex spreads of the market you want in a space on one screen. There you can see all the details of each spread and be able to filter down to see only the spreads you choose to focus on. With this straddle strategy, first click USD/CAD. As mentioned earlier, you can enter as early as 9:00 AM ET and you want to look at the 11:00 AM ET expirations.

Next, find the spreads with the right ceiling and floor parameters as mentioned above. Then, look to the far left and far right at the Risk/Reward columns. There, once you see that your chosen spreads meeting all parameters have a maximum Risk of around $20 each or less, for a combined Risk of $40 or less, that is when to enter the trade. See below for what an example of the spread scanner looks like displaying Nadex USD/CAD spreads.

To view image click HERE
HERE. USD_CAD

These reports tend to get the USD/CAD market moving. That is what you want for a straddle strategy. For this strategy for a 1:1 max risk reward ratio, you want the market to move up or down 80 pips, that’s where to set up take profit orders. At that point, you will have made enough to cover the cost of both sides of your trade and make $40 profit. Remember your max risk is $40 so there is no need to set up stops here. Also, if one side of the market profits you can leave the other side on and see if the market swings around and goes the other direction either to make a little profit or cut your risk a little.

For a complete daily news calendar of events and strategies to trade them as well as free trading education, go to www.apexinvesting.com.