Straddle The Market And Be Ready For A Move In Either Direction With UK News

Three reports will be released Wednesday, March 16, 2016, at 5:30 AM ET providing a trade opportunity. This trade setup calls for entry the night before, Tuesday at 11:00 PM ET for 7:00 AM ET expirations using Nadex GBP/USD spreads.

A Straddle strategy has two spreads on both sides of the market.

A Low Risk Trade: Stops Aren’t Necessary

One can sell a Nadex GBP/USD spread with the ceiling where the market is trading at the time and buy a Nadex GBP/USD spread with the floor where the market is trading at the time. Both spreads should have a max risk of $20 each for a combined total risk of $40. A Spread has a floor and a ceiling, which identifies the range of an underlying market you can trade. 

Based on previous market reaction to the release of 12-24 past months of these reports, it was found that a Straddle strategy with a max risk of $40 is high probability for a profitable trade. For a 1:1 max risk/reward ratio, set your limit take profit orders where the market would move 80 pips up or 80 pips down.

The breakeven points would be where the market hits 40 pips up or down.

These reports tend to move the market, and if one side profits, leave the other side on should the market pull back, the other side may profit as well.