Iron Condor Strategy For US New Home Sales Report Release


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By Darrell Martin

On Wednesday, August 23, 2017, at 10:00 AM ET, a report for New Home Sales in the United States will be released. This is a monthly report that provides data on the number of single-family houses sold and for sale. The report issued this week gives national and regional data on median and average prices, the number of houses sold and for sale by stage of construction and other interesting statistics.

As a trader, you may wonder how this type of a report can have any effect on your trading. A new home encompasses many different commercial and consumer areas in its construction and sale. The price of lumber and furniture, providing jobs and obtaining building permits can have an influence on the report and the market.

The July release, which reported June data had forecast 615K, but had an actual reading of 610K. This month, the forecast is 612K. If the reading is higher than expected, regard it as positive or bearish for the USD. If it comes in lower than expected, consider it negative or bearish for the USD.

The Strategy Utilizing Nadex EUR/USD spreads and an Iron Condor strategy, you can trade this news release. Enter as early as 9:00 AM with an expiration of 11:00 AM looking for a minimum profit of $30. With this strategy, you are buying below and selling above the market with the expectation of the market either staying in a range between those points or making a move and pulling back. The concept of a spread is designating a range of a market to trade, which gives you a spread option. It has a floor or bottom of the range and a ceiling or top of the range. Spreads can be bought or sold. The advantage of the floor/ceiling concept is capped, defined risk up front. There is no losing past the floor if you’re short or past the ceiling if you’re long. This also applies to profiting. Profits stop at the floor and the ceiling.

The Set Up Setting up the strategy requires just the right spreads. Buy a spread below the market but with the ceiling where the market is trading at the time. Concurrently, sell a spread above the market but with the floor where the market is trading at the time. The ceiling of the bought spread should meet the floor of the sold spread. The key for this trade is the profit potential of $30 or more combined between the spreads, therefore approximately $15 per spread.

None of that is complicated. In fact, it is easy using the spread scanner available free to all traders at www.apexinvesting.com. Once logged into your Nadex demo or live account, you open the spread scanner and choose your desired market. Now, at a glance, you can see all the required information in one window and find just the right spreads quickly. See the image below for an example of the spread scanner. For a complete calendar of news events and strategies to trade them, see the news section HERE. Apex also provides free education on trading Nadex binaries and spreads as well as futures, forex and CFDs. Nadex is a CFTC regulated US based exchange