How To Trade New Home Sales News


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By Darrell Martin

Similar to how Existing Home Sales can stimulate the economy, New Home Sales do as well. In addition to mortgages being made, agents being paid, new decor can be installed as can landscaping and furniture. All of this activity ripples through the economy. Therefore, traders watch and trade based on this news.

The day trader can also trade it using an Iron Condor strategy with Nadex Spreads. Nadex Spreads have capped risk on both its binaries and spreads and thus, there are no margin calls or requirements. The risk only needs to be covered and stops can be place to further keep risk in check.

Two Spreads: One Long and One Short

The US New Home Sales will be released Friday, December 23, at 10:00 AM ET. Enter as early as 9:00 AM ET for 11:00 AM ET expirations. One Nadex EUR/USD spread is bought below the market with its ceiling where the market is trading at the time. Simultaneously, one spread is sold above the market with its floor where the market is trading at the time. The trade should have combined profit potential of $30 with each spread having around $15 or more profit potential or no trade.

With this news, the market tends to react, move and then pull back. Pulling back to center between the two spreads and being there at settlement brings max profit. The market settling anywhere between the two breakeven points, being 30 pips above and below from where the market was at entry, will also bring profit.

To see how the market movement affects profit and loss for this trade, see the image below.

Based on the image, notice how stops should be placed where the market would reach 60 pips above and below from where it started. More spreads can be traded however; there should be the same number of spreads on each side of the Iron Condor.

Free access to the spread scanner and free day trading education can be found at Apex