Trade the Canadian Unemployment and Trade Balance Numbers

Canada has two reports coming out Friday, regarding employment and another report on the Trade Balance. All three make for a trade opportunity using an Iron Condor setup trading Nadex USD/CAD spreads looking for a $40 profit or reward potential. Statistics Canada will be releasing the Employment Change and the Unemployment Rate. The first tells the change in the number of employed people in the previous month and the second gives the percentage of workforce unemployed and seeking work. The numbers come out Friday, February 5, 2016, at 8:30 AM ET. The Trade Balance tells the difference in value of imported and exported goods during the previous month and is also released by Statistics Canada.

An Iron Condor strategy works well for news events when you don’t know which way the market will go. Based on previous market reaction to these past reports, it was found that the market would move and then pull back, which also makes the Iron Condor an ideal setup. A Nadex spread is an option with a floor and a ceiling, which specifies the range of the market you can trade. You can trade it long or short. For this trade you will trade two spreads. You want to buy a Nadex USD/CAD spread to trade the range below the market, but with the ceiling of the spread where the market is trading at the time. You also want to sell a Nadex USD/CAD spread to trade the range above the market, but with the floor of the spread where the market is trading at the time.

The other essential requirement for this recommended trade is to have a reward potential of $40 or more combined between the spreads. Hence, each spread will have around $20 or more profit potential. With this strategy, you are buying below the market and selling above the market. For max profit, you want the market to pull back after making any moves and be between your spreads at settlement. Another way to make good profit is for the market to move far enough for one side to profit and then pull back and have the other side profit.

For every pip away from the center of your spreads the market is at settlement, it is only $1 less in profit. Another advantage with this strategy is the wide range the Iron Condor spans giving the market plenty of room to move before you are at breakeven, much less losing on the trade. Depending on your exact entry, the market can move 40 pips up or down before your trade is at breakeven. For a 1:1 risk reward ratio the market can move 80 pips up or down.

To find your spreads quickly and easily, just open the spread scanner available for free access at www.apexinvesting.com. You also need a Nadex demo or live account, which takes only moments to open.

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USD/CAD

If $40 doesn’t seem like much profit, you can always trade more spreads as long as you have the same number of spreads on each side of your trade. If you aren’t able to find spreads with the right floor and ceiling parameters, or with the right reward potential, then don’t force the trade. There is news coming out almost daily and several news trades available a week to look for, so there is no need to force a trade.

For a complete calendar of news events and strategies to trade them, as well as free education and a 17,000+ member day trader forum, visit www.apexinvesting.com. Nadex is a CFTC regulated exchange located in the US and can be traded from 48 different countries.