Multiple Entry Opportunities Coming For NFP Friday


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By Darrell Martin

This week, January 6, is NFP Friday. The Friday of the month, when, at 8:30 AM ET, Non-Farm Payrolls are announced, is also known as Non-Farm Employment change. Along with this news, Average Hourly Earnings will be released. This is news that is very tradable due to the high volatility. Based on previous market reaction over a 24 month period, below are tables with suggested minimum profit potentials to set up for using Iron Condor strategies, along with maximum risk to set up for using Straddle strategies.

For the Iron Condor, sell a Nadex spread above the market and buy a Nadex spread below the market. The ceiling of the bought spread should meet the floor of the sold spread and be where the market is trading at the time. The ideal combined minimum profit should be split as equal as possible between the two spreads. To place stops, simply double the profit potential and put stops that many pips above and below from where the market was at entry.

The biggest move happens within the first fifteen minutes after the news is released 90% of the time. Based on that fact, trades can be entered for 9 AM, 10 AM or 3 PM ET expirations. It’s best to go for as much time as possible entering at 7 AM ET for 3 PM ET expiration. Entry can be as late as 8:15 AM ET.

For a Straddle setup, buy one spread with the floor where the market is trading at the time and sell one spread with the ceiling where the market is trading at the time. Be sure to keep the risk low and follow the suggested maximum risk guidelines below. Limit take profit orders should be set immediately after entering. Simply double the maximum risk amount and set take profit orders above and below from where the market was at entry.

Be very aware of deviation levels and take profit before the deviation level is hit. Often the market will remain flat after 11 AM and up until 3 PM after NFP. This can be a great time for Butterflies. Don’t get overwhelmed by the news. Most often price leads news.

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