Three Reports On UK Labor And Unemployment Make For Trade Opportunity

Three reports for the UK are due out early Wednesday, November 16, at 4:30 a.m. ET. They include the Average Earnings Index, Claimant Count Change, and Unemployment Rate. These releases show the increase in cost of labor for amount of jobless claiming unemployment benefits, and unemployed in the last three months. Traders pay attention to these results as they can have an impact on the markets.

The market move can be big. Therefore, a Straddle strategy makes for a high probability trade. To set up the Straddle, two Nadex GBP/USD spreads are entered: one long and one short. The floor of the long spread should meet the ceiling of the short spread and be where the market is trading at the time.

Fortunately, this trade doesn’t have to be entered in the middle of the night. It can be entered the evening before at 11:00 a.m. ET. The spreads should have an expiration of 7:00 a.m. ET. Each spread should have no more than a $20 risk and $40 combined risk for the trade. Take profit orders should be entered where the trade would make a 1:1 risk reward ratio. Those points for this trade would be around 80 pips above and 80 pips below entry. Once the market hits 40 pips above or below the point of entry, the trade has hit breakeven and going beyond those points, the trade begins to profit.

No stops are necessary, as the risk is so low. To see the risk reward amounts based on different moves for this trade, see the chart below. With Nadex, it is possible to exit at any time and take profits are in place when the market hits the 1:1 ratio points.

To view a larger image click HERE.

If one side profits, the other take profit order can be left on in the event the market turns and goes the other direction as well.

Free access to the Spread scanner along with free day trading education is available at Apex Investing.