By Darrell Martin
Unlike other countries, Canada releases their Gross Domestic Product once monthly about sixty days after the month ends, and their quarterly report is a summation of the monthly report. The monthly GDP report is a trade opportunity using an Iron Condor strategy looking for a profit potential of $25 or more. This may seem low but you can always trade more contracts. You just need to trade the same number of contracts on your buy side as your sell side.
When setting up an Iron Condor, buy a Nadex USD/CAD spread with the ceiling where the market is trading at the time, and sell a Nadex USD/CAD spread with the floor where the market is trading at the time. The max risk may seem high when placing the trade, as you pay the max risk up front. However, with Nadex spreads the risk is defined and capped, unlike futures or spot forex. When the trade settles, you receive the amount you put up to enter the trade plus profit or less any loss.
Realistic Risk vs. Max Risk
The max risk isn’t your realistic risk. You will place stop limit orders to keep your risk realistic within a 1:1 max risk reward ratio. Each spread should have a profit potential of approximately $12 or more. Depending on your exact entries, your 1:1 risk/reward ratio points are where the market moves 50 pips up or down after entry. You can enter as early as 8:00 AM ET for 10:00 AM ET expirations. To easily find just the right spreads, you can use the spread scanner at www.apexinvesting.com.
In the example above, you see the spreads are listed down the center. The reward potential is on the far left if you are selling the spread and the far right if you are buying the spread. To enter your order, simply click on the ticket and enter your order.
Once the news is released, typically the market will make a move and then pull back. Be sure to set limit take profit orders. As the market moves, one side may profit and then the other. Max profit is when the market is right in the middle between the two spreads at expiration. Therefore, you can leave the trade on to let it play out as well. Depending again on your exact entries, the market can move up or down 25 pips before hitting your breakeven points. As long as the market is somewhere between the breakeven points at expiration you will profit. Of course, the closer it is to the center between the two spreads, the greater your profit.
For a complete calendar of news events and strategies to trade them, visit www.apexinvesting.com. There you will find free education on how to trade futures, forex and CFDs as well as Nadex binaries and spreads. Nadex is a US based CFTC regulated exchange and can be traded from 48 different countries.
