An Evening Opportunity For A Scheduled Trade

The AUD/USD can be a great market to trade in the evening hours in the US, particularly when there are news announcements coming up. Thursday at 8:30 p.m. ET, the Producer Price Index and Private Sector Credit information for Australia will be released. This is a scheduled opportunity to trade. You can enter as early as 7:00 a.m. ET using Nadex AUD/USD spreads for 9:00 p.m. ET expirations. For this trade it is recommended to use an Iron Condor strategy, which can give the market plenty of wiggle room, let it go either direction and still have possibility to profit.

The Producer Price Index is a report released quarterly that gives the percent change in the price of the finished goods and services producers charge. It is good for currency when the actual is greater than what was forecast. Private Sector Credit is a report that measures change in the total value of new credit issued to consumers and businesses. Both reports give significant insight to the state of the Australian economy. Higher prices from producers are usually passed on to consumers. More borrowing takes place when consumers and businesses are confident about their future financial situation.

The Iron Condor is the strategy suggested, as it doesn’t matter which way the market goes after the news is released. In addition, the Iron Condor has a significant wingspan allowing the market to move a great deal before going outside the 1:1 risk reward ratio. For this trade, you want the profit potential to be $30 or more combined. To find just the right spreads, go to the spread scanner where you can see all the spreads at a glance and easily focus in on the ones you want. Below you can see an example of Nadex AUD/USD spreads on the spread scanner.

To view a larger image, click HERE.

The spread contracts are listed down the center with the floor being on the left and ceiling on the right. When trading spreads, you can’t win or lose past the ceiling or the floor depending on the direction of your trade. For an Iron Condor setup, you will buy a lower Nadex AUD/USD spread below the market with the ceiling where the market is trading at the time. You will sell an upper Nadex AUD/USD spread with the floor where the market is trading at the time. With this setup, your lower bought spread’s ceiling will meet the floor of your sold upper spread’s floor. You can trade multiple contracts but you need to have the same number on each side.

Depending on where your exact entries are, the market can move 60 pips above or below from time of entry and your trade will still have a 1:1 risk reward ratio. This is also where you will want to set your stops. Your breakeven point is when the market moves 30 pips up or down, again depending on your exact entries. You want to set your take profits as well. Depending on where you entered, set one take profit where the market would hit 15 pips higher than your bought spread’s ceiling and the other take profit approximately 15 pips lower than your sold spread’s floor.

If the market returns or stays in the middle of your spreads and your trade expires there, then you make max profit. However, it also could be you take profit on one side and then you take profit on the other side, when the market makes a pull back. This is called legging out of a trade.

To get free access to the spread scanner and a complete calendar of news events to trade go to www.apexinvesting.com. There you will find free education on how to trade Nadex spreads and binaries, futures, forex and CFDs.