How To Fly Like An Iron Condor While Trading Existing Home Sales

Existing Home Sales numbers will be released by the National Association of Realtors coming up on Tuesday, December 22, 2015, at 10:00 AM ET. This report has a medium impact on markets. It comes out monthly 20 days after the month ends. It is still reporting on sales before the Fed raised interest rates from the 0.00 - 0.25 corridor to a 0.25 - 0.50 range. Not that this minor hike is anticipated to influence sales much, as mortgage rates are expected to remain low. The Richmond Manufacturing Index will also come out at the same time although only it has a minor impact on markets.

News like this makes for great trading opportunities. You can trade the EUR/USD market reaction using Nadex spreads. Spreads have a floor and a ceiling number, which tells you the range of the market you are trading. You can go long or short with a spread as well. For the recommended strategy for this news event, you want to trade two Nadex EUR/USD spreads. Buy one Nadex EUR/USD spread range under the market having its ceiling where the market is trading at the time. Sell the other Nadex EUR/USD spread range above the market but having its floor where the market is trading at the time. The other requirement you need to have for your spreads is the profit potential. For this trade, you need your spreads to have a $30 or more combined profit potential, so each spread should have around $15 of Reward potential.

The spread scanner makes it easy and intuitive to trade spreads. All you need is a Nadex demo or live account, be logged in and then go to www.apexinvesting.com to log into the spread scanner. Both are easy to access and free to start. Below you can see the spread scanner with a list of EUR/USD spreads.

To view a larger image click HERE.

The Iron Condor strategy is named after the bird for its wing span. When you entered, you bought below the market and sold above the market. As long as the market settles within those prices at expiration, you will make some profit with max profit being between the two spreads. The market can also make a move where one side will profit but leave the other side on as the market can pull back and then the other side can profit as well. The market tends to react this way based on past market reaction, which is why the Iron Condor is recommended.

The time to call the trade is when the market reaches the 1:1 max risk/reward ratio. Place your stops and exit approximately 60 pips above or below your entry. At those points, one side will have profited approximately $15, depending on your entry, but the other side will have lost approximately $45 depending on your entry, for a total $30 loss. If you want more than a $30 profit potential, you can always trade more contracts. Just be sure to have the same number on each side of your trade to balance the bird’s wing span.

To learn more news trades and techniques go to www.apexinvesting.com. There you can find free education on trading Nadex, futures, forex and CFDs. Nadex also has binaries to trade and is a US based CFTC regulated exchange. It can be traded from 48 different countries.