By Darrell Martin
Three news reports regarding the UK are scheduled for release this coming Friday, March 11, 2016, at 4:30 AM ET, including:
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Trade Balance
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Construction Output
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Consumer Inflation Expectations
This makes for an Iron Condor trade opportunity using Nadex spreads to trade GBP/USD. This strategy, using spreads, allows you to enter as early as the night before, Thursday, at 11:00 PM ET, for 7:00 AM ET expirations. Nadex spreads are option derivatives of underlying markets. You can trade a range of a market, specified by the floor and ceiling of the spread, and trade it long or short. You can’t win or lose past the floor or ceiling, and as such, you know what the capped risk is up front.
With Spreads You Can Buy Below The Market And Sell Above The Market
With this strategy, you are buying below the market and selling above the market. You are looking for the market to make a move, so one side will profit, and then when the market pulls back, the other is set to profit. Alternatively, the market can stay right where it was at entry, or close to it, and you can profit.
You want to buy a Nadex GBP/USD below the market, but with the ceiling being where the market is trading at the time, and sell a Nadex GBP/USD above the market, but with the floor being where the market is trading at the time. Each spread should have a profit potential of $20 or more for a combined profit potential of $40. Using the spread scanner, you can easily find these spreads. See how the spreads are displayed on the spread scanner in the example below.
Be sure to set limit take profit orders as soon as you enter. Since you are buying below the market and selling above the market, the market can move as much as 40 pips in either direction and your trade will just hit the breakeven points, depending on your exact entries. Ideally, you want the market to move just enough for one side to profit, and then pull back so the other side can profit as well. Should the market go outside of the breakeven points, you want to set stop limit orders at the 1:1 max risk/reward points, where the market has moved as far as 80 pips up or 80 pips down.
When you trade regularly scheduled news, by tracking the consistent market responses in size of movements, you can set your expectations and have a strategy ready at a scheduled time. For more trade tips and news events like these, visit www.apexinvesting.com. Nadex is a US based CFTC regulated exchange and can be traded from 48 different countries.
