By Darrell Martin
At 5:30 a.m. ET on Wednesday, March 18, 2015, there will be eight news reports released from the United Kingdom. All of these reports will impact your trading, especially if you are trading the GBP/USD.
Bank Of England Half of the reports come from the Bank of England and involve the Monetary Policy Meeting Minutes including how the members voted in regards to raising or lowering interest rates. Although the minutes from the meeting are in-depth and give some understanding of the economic conditions that influenced the member’s decisions on where to set the interest rates, it is the votes themselves that tend to be the most important part of the minutes.
U.K. Office Of National Statistics The other four reports are released from the U.K. Office of National Statistics and deal with earnings and unemployment. One report entitled Claimant Count Change tells the change in the number of unemployed people during the last month. If this report shows a rising trend, then it indicates a weakness in the labor market, which would signify problems with spending and economic growth. If there are more and more people out of work, there will be less and less money to spend.
How To Trade All of these news reports can be traded using a Straddle strategy. A Straddle is the opposite of an Iron Condor. You will still want to place two trades simultaneously using Nadex Spreads on the GBP/USD. Nadex has recently opened their membership up to 49 countries.
You can enter as early as 11:00 p.m. Tuesday, March 17, with an expiration of 7:00 a.m. Wednesday, March 18. You are looking for a maximum risk of $40.
To place a straddle, buy the upper spread and sell the lower spread having the ceiling of the lower spread equal to the floor of the upper spread. You want your entry price as close to this center as possible. The beauty of this kind of strategy is that no matter which way the news causes the market to move, you are covered, with limited risk.
For more information on how to trade the news or learn different strategies for your trading, go to www.apexinvesting.com.