GDP: Economic Health Indicator


By Darrell Martin

To know the health of an economy, pay attention to the Gross Domestic Product or GDP data. This is data released monthly by many countries and reveals the annualized change in the inflation-adjusted value of all goods and services produced by the respective economy. It is the broadest measure of economic activity and serves as the primary indicator of the health of the economy.

Just like other news releases, this report can cause movement in the market. Canada will release its GDP report on Thursday, January 31, 2019 at 8:30 AM ET and is forecast to be down 0.1 percent from last month’s reading. Should the reading be higher than expected, take it as positive or bullish for the CAD. However, if numbers released are lower than expected, regard it as negative or bearish for the CAD.

This news can be traded using Nadex USD/CAD spreads. Using an Iron Condor strategy, enter as early as 8:00 AM with an expiration of 10:00 AM. Minimum profit should be $25.

To set up this strategy, buy one spread below and sell one spread above where the market is currently trading. To achieve the minimum profit goal of $25, each spread should have a minimum profit potential of about $13. The bought spread’s ceiling should meet the sold spread’s floor.

If the parameters for the trade do not line up, then there is no trade. Never force a trade. Always demo trade new strategies to mastery before risking live money.

After entering this trade, stops can be set where the market would reach 50 pips above and below where the market was at entry. This is the 1:1 risk reward ratio points for this trade.