Be Ready For A Market Move After The European Central Bank Press Conference


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By Darrell Martin

Scheduled eight times per year, the European Central Bank Press Conference can get the EUR/USD moving making for a nice trade opportunity. The next conference takes place this Wednesday, April 15, 2015, at 8:30 AM ET. The press conference itself is about one hour long, and then there is a question-answer period for the press. The answers, being unscripted and unpredictable, can lead to market volatility. Traders take notice of this press conference as it is the European Central Bank’s method of releasing monetary policy information. Information can include interest rates and policy decisions regarding the current and future economic outlook and inflation. Trade Two Spreads To Straddle The Market To trade this scheduled event, use Nadex Spreads to set up a Straddle strategy. This strategy is good for when the market is expected to make a significant move and it is unknown which direction it’s going to go. Apex Investing researches market moves after scheduled news events for 12 - 24 months. A Straddle setup is just like it sounds. Two spreads are traded straddling where the current underlying market is trading. The underlying market in this case is the EUR/USD. Buy the Nadex EUR/USD upper spread with the floor being where, or close to where, the current underlying is trading. Sell the Nadex EUR/USD lower spread with the ceiling being where, or close to where, the current underlying is trading. Look to enter the spreads as early as 8:00 AM ET, with a 3:00 PM ET expiration for a maximum risk of $45. An Estimated Move Of Up to 90 Pips For This News Event When straddling the market using two spreads, if or when the market takes off in one direction, one side of the straddle will lose while the other profits. If it is recommended to set up a Straddle for a maximum risk of $45, then it’s estimated that the market could move at least 90 pips in one direction in order to profit. For example, if you bought the upper spread for $25 and you sold the lower spread for $20, and the market moved 90 pips up, then you would lose $20 on the sold spread, and you would profit $65 on the bought spread for a net profit of $45. To learn more about news trades, see a full calendar, and strategies go to www.apexinvesting.com.