By Darrell Martin
Four different reports are being released on Friday, July 17, 2015, at 8:30 AM ET including:
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CPI
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Core CPI
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Building Permits
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Housing Starts
There are two different sets of reports. One set is focused on Consumer Pricing and the other focused on building. CPI stands for Consumer Price Index which measures the change in the price of all goods and services consumers have purchased. The Core CPI takes that number but excludes pricing information on food and energy, which tends to be very volatile and can distort the CPI. This pricing information gives insight into inflation which can affect interest rate changes.
The Building Permits Report is the annualized number of new residential building permits issued in the previous month and the Housing Starts Report is an annualized number of new residential buildings starting construction in the last month. Building houses stimulates the economy and permits and starts give first confirmation of home building.
Enter At 7:00 AM For 9:00 AM Expirations
The release of the reports is at 8:30 AM ET. It is unknown which direction the EUR/USD market will move but it has been found to move and pull back after the news release. With that information in mind, a neutral low risk strategy like an Iron Condor is ideal using Nadex Spreads. Nadex Spreads have a floor and a ceiling providing defined limited risk and profit at those points, depending on the direction of the spread. For this trade setup two spreads are traded. Buy a Nadex EUR/USD Spread with the ceiling where the underlying EUR/USD is trading at that time. Then, sell a Nadex EUR/USD Spread with the floor where the underlying EUR/USD is trading at that time. This will give you a lower bought spread and an upper sold spread. Entry should be at 7:00 AM ET with 9:00 AM ET expirations.
Have The Right Setup Or Don’t Take The Trade, Never Force It
You want to have the right profit potential setup as well. Look for spreads that will give you a combined profit potential of $25 or more. So each spread should cost you around $12 - $15 or more to achieve that profit potential. If all of the above isn’t available for setup, then don’t take the trade. If that profit potential doesn’t seem like much, then you can always trade more spreads on each side as long as you have an equal number of spreads on each side. The trade can be left on until expiration. For max profit the market needs to pull back or remain right between the two spreads at expiration. Nadex Spreads tick in $1 increments and therefore, every tick away from center between the spreads is $1 less profit. However, based on 12 - 24 months of reports and market analysis it was found that the EUR/USD tends to make a move and then pull back after the release of these reports.
To see a full calendar of news trades from the Apex Investing news team and strategies to trade them, go to www.apexinvesting.com. Nadex Spreads and Binaries can be traded from 49 countries. To see an Iron Condor trade beginning to close, see The Awesomeness Of An Iron Condor.