Hey Guys? This is my first post here as I have recently came across the website / YouTube channel. I Just want to say thanks for doing what you all are doing. Keep it up!
I definitely enjoyed watching the video on trading the Forex news with Nadex straddles; however, it does bring up a question for me. I do apologize ahead of time if this question has been asked before, however, how does one really know what currency to place the straddle on before the news release? After doing some homework, as suggested in the video, by going back to the beginning of the year (1/2013) to look at the major US news releases and price movement in relation to the USD currency pairs, its clear that sometimes certain pairs will experience decent movement while others have minimal movement. For instance, looking at the ?ADP? non farm payroll for the EUR/USD, which is released at 7:15am / 8:15am EST monthly, we can see that the largest movement (either up or down) within the time frames of either 7:00am ? 9:00am or 8:00am ? 10:00am (2 hour spreads) was over 30 pips for only 4 releases this year. From what I have been seeing due to the cost of the spreads, movement needs to be at least 30+ pips. As an example the other day the cost to buy a 2 hour bull spread on the EUR/USD was only $6.00. In order to sell the cost was more then twice as much: $14.00. So the total risk is $20. We obviously need a price movement of 26 or 34 pips depending on the direction in order to close out a 1:1. So this points to my question again? Since not every currency pair experiences decent volatility during a news announcement (less then 30pip movement), how can we know what pairs will really move the most in order to ensure a 1:1 more then 50% of the time? Obviously a 50% win rate with a 1:2 will always come out ahead, however, if we are just hoping the currency gives us the volatility in order to gain 1:1 profit then in theory we will always break even? I might be missing something or not understanding, as I am new to Nadex, so any feedback would be great.
Thanks!
Matt