A Scheduled Trade With Strategy To Match Markit Data Release

Every week has potential scheduled trades as we have scheduled news events. All a trader needs to do is track the various news reports that come out repeatedly and the market reaction to their release. If there is a consistent trend, then voila, you have a consistent trade opportunity. You only need a strategy to go with it for high probability results.

Enter Construction PMI on the UK coming out Wednesday at 4:30 a.m. ET. Released by Markit, a financial information services organization, PMI stands for Purchasing Manager’s Index and is a level of diffusion index based on answers from 170 surveyed purchasing managers in the construction industry from the UK. The questions revolve around business conditions for these managers, including employment, production, new orders, prices, etc. This report reflects on economic health, and the GBP/USD market has shown consistent response over time. There is enough analysis to come up with a recommended trade strategy of an Iron Condor, using Nadex GBP/USD spreads entering as early as 11:00 p.m. ET on Tuesday, the evening before, for a 7:00 a.m. ET expiration and with a $30 or more profit potential.

To set up this potentially high probability trade, you want to sell an upper spread above the market, but with its bottom or floor where the market is trading at the time. You also want to buy a lower spread below the market with its ceiling or top where the market is trading at the time. A spread is a range of the market and has a floor and a ceiling. Depending on which direction you trade the spread, you can’t win or lose past the floor and the ceiling. To find spreads at a glance, with the right floor and ceiling, just open the spread scanner located at www.apexinvesting.com. Below is an example of the spread scanner with a list of GBP/USD spreads. You will also need to have a demo or live account at Nadex and be logged in. A demo account can be set up in seconds and a live account in minutes. It’s that easy.

To view a larger image click HERE.

The great thing about this setup is you can enter the night before and leave the trade on until expiration. Be sure to always demo trades first before going live. Understand the market, the trade and the execution. You can enter as early as 11:00 PM ET, Tuesday the night before for 7:00 AM ET expirations. Once you find the spreads that meet the right floor and ceiling parameters, you need to make sure they meet the profit potential parameters. On the spread scanner image above, you will see the far left column, which tells of the potential Risk/Reward if you sell that spread, and the far right column tells of the potential Risk/Reward if you buy that spread. When choosing the spreads for this news trade, look at their Reward and make sure they each have around $15 for a combined profit potential of $30 or more.

With all the parameters meeting up, you can enter your trade. With a $30 or more profit potential, the market can move 30 pips up or down and that’s where your breakeven points are. If your trade expires anywhere in between those points, you will make some level of profit. You can always increase the number of contracts you trade, just be sure to trade the same number on both sides of the trade. To figure your profit, it is $1 less in profit for every tick away from the center of your spreads the market is at expiration. You need to know where the 1:1 risk reward ratio points are to set your stops. The 1:1 risk reward ratio points would be where the market hits 60 pips up or down in movement from where it was when you entered.

For a full calendar of news events for trading every day and strategies to trade them, along with free education on how to trade Nadex, futures, forex and CFDs go to www.apexinvesting.com. Nadex can be traded from 49 different countries and is a US based CFTC regulated exchange. You can also enter and exit your trades at any time to take profit and manage your risk.