By Darrell Martin
Trading the news can be a great way to catch volatility in the market even after regular trading hours and before or after a day job. Australia news typically comes out in the US Eastern evening time hours. This Tuesday, January 26, 2016, the Australian CPI and Trimmed Mean CPI will be released at 7:30 PM ET. The CPI stands for Consumer Price Index and it gauges the change in the price of goods and services bought by consumers. The Trimmed Mean CPI simply excludes the most volatile 30% of items for a more consistent reading number.
To trade this report, you can use Nadex Spreads with an Iron Condor strategy. Nadex is an exchange located in the US and is regulated by the Commodities and Futures Trading Commission (CFTC). You can trade Nadex from 48 different countries. Spreads allow you to trade a range of a market and have a floor and a ceiling, which you can’t win or lose past, depending on the direction of your trade.
Since the Reserve Bank of Australia will release the reports at 7:30 PM ET, you can enter the trade as early as 7:00 PM ET for 9:00 PM ET expirations. You will need to buy a Nadex AUD/USD spread below the market with the ceiling where the market is trading at the time and sell a Nadex AUD/USD spread above the market with the floor where the market is trading at the time. You also need to be sure you have a profit potential or reward potential of $35 or more combined between the spreads. Each spread should have around a $17 or more profit potential.
How do you find just the right spreads for this setup? To demo this trade you need two things: To be logged into a Nadex demo account, which takes seconds to open, and to have the Apex spread scanner open to easily find your spreads. The Apex spread scanner is available to all traders at www.apexinvesting.com. Below you can see a listing of AUD/USD spreads on the spread scanner.
This strategy is recommended based on market analysis from 12 - 24 past news releases and market reaction. The Iron Condor is a great strategy that leaves plenty of room for the market to move, yet keep your trade at the very least in a 1:1 max risk reward ratio, if not profiting or breaking even. For this trade, the market can move and one side may profit before the other side. You can leave the other side on though as the market may pull back and then that side could profit as well. You would want to call the trade and exit at the 1:1 risk reward points, which would be where the market moves 70 pips up or down. Max profit can occur if the market stays right where it is and the trade expires or if one side profits and then the other side profits.
To find out more about Iron Condors and other news strategies along with a full calendar of events, go to www.apexinvesting.com. There you will find free education on how to trade futures, forex, CFDs as well as Nadex spreads and binaries.
