By Darrell Martin
Home sales, whether new homes or existing homes sold, drive economies. The sale of a home means much work and business created. There is the business of the financing, then the services of the moving companies and most likely lots of new items to purchase as well. The effects of a home sale are far reaching, as they ripple throughout an economy. It’s no different in the US. United States New Home Sales will come out Tuesday, June 23, 2015 along with the Richmond Manufacturing Index. The two reports, when greater than forecast, are good for the USD and make for a trade opportunity on the EUR/USD.
The Richmond Manufacturing Index is an index based on surveyed manufacturers in Richmond and above zero indicates improving conditions. The survey wants to know the manufacturers opinions on business conditions including increasing shipments, new orders and employment.
Two Reports Out At Same Time Make For EUR/USD Spreads Trade
The EUR/USD is known for reacting to these news events, then making a pullback based on analysis of 12-24 past reports and market reaction. For this kind of a move a neutral Iron Condor strategy works well, using Nadex EUR/USD spreads. You can enter your trade at 9:00 AM ET for 11:00 AM ET expirations. The reports come out at 10:00 AM ET. You want to have a $30 or more profit potential. Therefore, buy the lower spread for around $15 or more and sell the upper spread for around $15 or more. In addition, the ceiling of the lower bought spread should meet where the floor of the upper sold spread is, and together they should be where the then current underlying market is trading.
Go For The Right Setup, Don’t Force It
Without that setup don’t take or force the trade. Once the reports are out the market makes a move and then typically will pull back. The closer to the center of the Iron Condor, between your two spreads the market comes, the higher your profit. You can leave the trade on until expiration to give the trade time to play out and the market time to make its move.
Nadex also offers binaries for trade. It is a US regulated exchange and can be traded from 49 different countries. To learn more about how to trade the news and for a complete news calendar go to www.apexinvesting.com. For a complete example of an Iron Condor trade, see The Awesomeness Of The Iron Condor.