How To Get In Above And Below The Market For A News Trade

Statistics Canada will be releasing several reports Friday, December 18, 2015, at 8:30 AM ET. Based on previous market action, after the release of these reports, it was found that an Iron Condor strategy was a high probability setup using Nadex spreads. Using Nadex USD/CAD spreads, entering as early as 8:00 AM with an expiration of 10:00 AM and for a minimum profit of $30 or more is recommended. The reports include the following:

• CPI
• Core CPI
• Wholesale Sales

CPI stands for Consumer Price Index and it measures the change in the price of goods and services purchased by consumers. The Core CPI is the CPI but excludes the eight most volatile items, which make up about 25% of the CPI and can distort the number.

To place your trade, be sure to have a demo or live account with Nadex. Either is quick and easy to set up and can be done in minutes. Always demo trades first before taking them live. Next, open the spread scanner provided by www.apexinvesting.com. On the spread scanner, you will see all the spreads listed down the center for your particular market choice. See example below:

To view a larger image click HERE.

The Iron Condor strategy is designed to capture profit when the market stays in a range, doesn’t move at all or moves a short distance and pulls back. Spreads allow you to trade the market in the range between the floor and ceiling of the spread. You can trade them long or short and you won’t win or lose past the floor or ceiling. Your max risk is known up front and it is capped. As mentioned above, you can enter as early as 8:00 AM ET, as long as you find the right spreads.

You want to sell a Nadex USD/CAD spread above the market but with its floor being where the market is trading at the time. Looking to the far left column on the spread scanner, you’ll see the Risk/Reward if you were to Sell the spread and it should have approximately $15 or more of Reward or profit potential. You also want to buy a Nadex USD/CAD spread below the market but with its ceiling being where the market is trading at the time. Looking this time to the far right column in the spread scanner, you’ll see the Risk/Reward if you were to Buy the spread and it should have approximately $15 or more of Reward or profit potential. Once you find both spreads and they have the right reward of $30 or more of combined profit potential and then you can enter the trade.

Buying Below and Selling Above

With the spread you are buying, you are actually buying below the market and with the spread you are selling; you are selling above the market. This being the case, the market can move within that range and your trade will make some level of profit. If the market comes up to where you sold your upper spread or down to where you bought your lower spread, then your trade is at a break even point. Essentially, you will have full profit on one spread and a full loss on the other spread.

The place to set your stops, or call the trade and exit, is at the 1:1 max risk/reward ratio points. Depending on your exact entries, if you have a profit potential of $30 or more, then place your stops where the market has moved 60 pips up or down. Should this happen, one spread will have made $15 profit and the other side will have lost $45 for a total loss of $30.

Where do you make max profit? When the market returns or remains right in the center of your two spreads and your trade expires there. Alternatively, if the market moves in one direction and one side of your trade profits, then the market returns for the other side to profit. For every pip away from the center of your spreads the market is at expiration, it is less $1 profit. Remember though, this is the recommended trade strategy based on 12 - 24 months of reports and market reaction. You may or may not find the spreads meeting all your parameters at the time of entry. In which case you can wait and the market and spreads may come around to be what you need, or they may not. There is no guarantee. Do not enter the trade unless the spreads have all the parameters.

For more information on how to trade the news, a full calendar of events and strategies to trade them, visit www.apexinvesting.com. There you will find free education on how to trade Nadex binaries and spreads as well as futures, forex and CFDs. Apex has a full line up of trading services and tools with proven consistency. Nadex is a US based exchange regulated by the CFTC and can be traded from 49 different countries.