News Trade For USD/CAD Using Defined Capped Risk With Spreads

At 8:30 ET on Thursday morning Canada will release its Gross Domestic Product data. Based on previous movement from this event in USD/CAD, an Iron Condor trading Nadex USD/CAD spreads could be a high probability trade for traders looking for profit of $25 or more.

To set it up, one could buy a lower spread below the market with the ceiling where the market is trading at the time, and sell an upper spread above the market with the floor where the market is trading at the time. The Iron Condor is a premium collection trade, which profits from collecting premium while time expires. If the market moves and pulls back or just remains right between the spreads and is there at settlement, then max profit can be reached.

With a profit potential of $25 or more combined between the spreads, stops can be set where the market would hit 50 pips above and below. That is where the 1:1 risk reward ratio is. As long as the market is between 25 pips above and below where it started, then the trade would make some profit.

Spreads have defined capped risk, so total risk is known up front and there is no loss or profit beyond the ceiling and floor. Traders using the spread scanner learn to trade spreads fast and more effectively. To find the right spreads for this strategy, simply find the reward potential for both sides of the Iron Condor, and then verify the other parameters meet requirements.