Get The Current Account News And The Current Strategy To Trade It

Every quarter the Bureau of Economic Analysis releases the US Current Account. It gives a picture of the International Transactions the United States has done over the previous quarter. The release is at 8:30 AM ET Thursday, December 17, 2015, and it includes the difference between imported and exported goods, services, income flows and unilateral transfers. All of this directly affects currency demand because foreigners must purchase goods and services in the US in US dollars.

There is a way to trade this news event using Nadex EUR/USD spreads. Based on previous reports and market reaction, it’s recommended to use an Iron Condor strategy going for a $30 or more profit potential. You can always trade more contracts to increase the profit potential if your trading account is large enough for the increased risk.

The Iron Condor strategy involves buying a Nadex EUR/USD spread below the market with the ceiling of the spread being where the market is trading at the time. You also need to sell a Nadex EUR/USD spread above the market with its floor being where the market is trading at the time. Since the profit potential for this Iron Condor is $30 or more, each spread should have a profit potential of around $15 or more. To easily find your spreads, open the spread scanner at www.apexinvesting.com. You will also need to be logged into your demo or live Nadex account, which can be set up within minutes. Nadex is a US based CFTC regulated exchange and can be traded from 49 different countries. For a glimpse of the spread scanner, see the image below which displays Nadex EUR/USD spreads.

To view image click HERE.
EUR_USD

It won’t matter which way the market goes after the release of this news. If the market moves significantly and then pulls back, one side of this trade will profit first and then the other may still profit. This strategy profits when the market stays in the range, between where you sold the upper spread and where you bought the lower spread. Should the market hit your sell and buy prices, that is where the trade would be at breakeven. One side will have profited while one side will have lost. However, you can leave this trade on until expiration to let the market play out and give your trade plenty of time to profit. Where to call the trade and exit to manage risk is at the 1:1 max risk/reward ratio points. Depending on your exact entries and profit potential, when the market goes up or down approximately 60 pips, this is the 1:1 max risk/reward ratio, and where you would want to exit to manage risk.

Max profit for this trade is when the trade expires with the market right where it was when you placed the trade, between your spreads. Therefore, for every one tick away the market is from the center is $1 less in profit. Remember however, for this news event the market tends to react and pull back or remain in a range.

There are news trades every week creating volatility in the markets and implied volatility creating trading opportunities with spreads just like in this example. For a complete calendar of events and strategies to trade them, go to www.apexinvesting.com. There you will find free education as well as tools and indicators to enhance your trading potential.