By Darrell Martin
The Australian Trade Balance will be released Wednesday, August 2, at 9:30 PM ET. If you like to trade in the evening, then the AUD/USD market may be a good market for you with open hours in the evening. This scheduled news event can be traded using capped risk Nadex AUD/USD spreads.
The release is at 9:30 but you can enter as early as 6:00 PM ET for the 11:00 PM ET expiration. The strategy is an Iron Condor for a minimum profit potential of $30 or more split as evenly as possible between the spreads. One spread is bought below the market and one spread is sold above the market. The ceiling of the bought spread should meet the floor of the sold spread and be where the market is at entry.
To easily find the spreads, use the Apex Spread Scanner Pro, available free for any trader. Each spread listed will show the red and green risk and reward bars along with numbers. Just look at those bars to find an AUD/USD spread to sell and to buy with $15 or more reward potential. Once found, be sure they meet the ceiling floor parameters and then enter the trade.
The 1:1 risk reward ratio points can be figured easily by doubling the total profit potential of the trade. For this trade at $30, doubling it would equal 60. Where the market reaches 60 pips either up or down from where it was at entry, is where to place stop limit orders for a 1:1 risk reward ratio. The market can move up or down 30 pips before hitting breakeven points.
When the market is between those points, as time expires and gets closer to settlement, the trade will begin to profit. When the market is right between the two spreads at settlement is max profit. The range for profiting is 60 pips between the two breakeven points.