Evening News Trade Opportunity With Nadex GBP/USD Spreads

News scheduled for evening release can be good for evening traders because forex markets move when news is released. If the movements are tracked and consistent moves are found, a strategy can be used to place a high probability trade. Wednesday evening is such an occasion. The Bank of England will be releasing news at 4:30 a.m. ET, Thursday, September 29, on Net Lending to Individuals, M4 Money Supply, and Mortgage Approvals. The first is the change in value of new consumer credit; the M4 Money Supply is the change in the amount of currency in circulation and deposited in banks, and the last is new mortgages approved for home purchases.

This news tends to move the market and then pull back. Based on that kind of move, an Iron Condor strategy, using Nadex spreads, can make for a high probability trade. Based on the average market reaction over a number of passed news events, the profit potential should be $35 or more combined for the trade. The trade can be entered the evening before, on Wednesday at 11:00 a.m. ET for 7:00 a.m. ET expiration.

The profit potential is considered combined, because the Iron Condor includes two Nadex GBP/USD spreads. One spread is a range of the market above the market and the second spread is a range of the market below. The spreads can be bought or sold and the risk/reward is capped at the floor and ceiling.

To set up, one could buy the lower spread with the ceiling where the market is trading at the time and sell the upper spread with the floor where the market is trading at the time. The $35 or more profit potential should be split between the two spreads as closely as possible.

Using the spread scanner and its filter feature, traders can easily bring up GBP/USD spreads expiring at 7:00 AM ET. Then, by simply looking down the risk/reward column, the spreads with the right reward potential will stand out. Simply click on the ticket, verify the ceiling/floor parameters and place the trade. Check out a view of the spread scanner below.

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Stops should be placed for this trade at the 1:1 risk reward ratio points, which are 70 pips above and below where the market was at entry. Basically, it is double the profit potential in pips above and below. For example, if the trade had a profit potential of $40, then the stop points would be 80 pips above and below.

Profit will be made when the market settles anywhere between the breakeven points for the trade, which are 35 pips above and below. Should the market settle right in the middle between the two spreads then max profit is made. More contracts can be traded as long as there is the same number of contracts for both spreads traded.

Free access to the spread scanner and free day trading education can be found at Apex Investing.