By Darrell Martin
Five different ways to examine Canada’s Consumer Price Index (CPI) will be released Friday, April 21, at 8:30 AM ET. CPI is the change in the price of goods and services consumers have purchased. Higher interest rates can be put in place to check inflation. Based on previous market reaction to these news reports, an Iron Condor strategy, using Nadex spreads can make for a high probability trade.
The market tends to make a move and then pull back after this news. The Iron Condor includes two Nadex USD/CAD spreads in its strategy: one that is bought below where the market is at entry, and one that is sold above where the market is at entry. If the market makes a move up or down then pulls back, as time expires while the market pulls back to where it was at entry, this trade profits. Entry can be as early as 8:00 AM ET for 10:00 AM ET expiring spreads.
When using the Spread Scanner, the trade is simple to set up, even for beginners. Filters can narrow down the spread selection to show only USD/CAD spreads expiring at 10:00 AM ET. Both spreads should have a profit potential of $15 or more, for a combined profit potential of at least $30 for the trade. The red and green risk reward bars will show the profit potential for buying and selling each spread. Then, the ticket icon will open a ticket to easily enter the trade. Below is a view of the Spread Scanner.
The bought spread’s ceiling should be where the market is trading at the time and meet the floor of the sold spread. For this trade with a profit potential of $30, stops should be placed around 60 pips above and below from where the market was at entry. A 1:1 risk reward ratio would be at those points, in the event the market takes off and doesn’t return. The market can go up 30 pips or down 30 pips and as long as it settles somewhere in between those breakeven points, it will profit.
For free access to the Spread Scanner and free day trading education, visit www.apexinvesting.com.