By Darrell Martin
Friday, June 3, at 8:30 AM ET the US Unemployment Rate and Non-Farm Employment Change will be released. These reports will get the currency markets moving, making for numerous trade opportunities. There are two strategies that can be used with Nadex spreads.
For Iron Condors, the ideal minimum profits are listed below for the various pairs and are based on the average range of market movement from this news over the last twelve months. To set up an Iron Condor trade, buy a Nadex spread in a below listed pair below the market and sell a Nadex spread in a below listed pair above the market. The below bought spread’s ceiling should meet the above sold spread’s floor and be where the market is trading at entry. The ideal profit potential should be split between the two spreads. Stops should be placed both above and below where the market would hit the number of pips for stops.
Max profit for any of the Iron Condors is when the market pulls back or stays in a range and settles right between the spread at expiration. If the market settles anywhere between the breakeven points, the amount of the potential profit listed in pips up or down, then the trade will profit an amount.
You want to go for as much time as you can get. The ideal expiration is 3 PM ET entering at 7 AM ET, or you can enter at 8 AM ET for 10 AM ET expiration. The majority of the movement happens in the first 15 minutes and then the market tends to pull back.
Since the markets can really move in reaction to this news, Straddles will also work well. Like an Iron Condor, a Straddle setup also has two spreads. It is the opposite of an Iron Condor setup though. To place this trade, buy a Nadex spread above the market and sell a Nadex spread below the market. The above bought spread’s floor should meet the below sold spread’s ceiling and be where the market is at entry.
The beauty of the Straddle is the low risk. The risk for the a pair’s straddle should be no more than the risk amount listed combined between the spreads. Take profit orders should be placed above and below where the market would hit the listed number in pips. At those points, the trade will have made enough to cover the loss of one side and make a profit based on a 1:1 risk reward ratio.
For the Straddle strategies you can go for a 9 AM ET, 10 AM ET, or 3 PM ET expiration. Check out where the deviation levels are for the market you are trading and place your take profit orders just before the deviation levels.
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