By Darrell Martin
A report by Reuters on Retail Sales news for May, showed it had the largest decline since January 2016, thanks to declining motor vehicles sales and discretionary spending. This was completely unexpected as seen by the 0.1 percent gain that economists expected. Retail Sales, to be released Friday, July 14, at 8:30 AM ET, is forecast again for the same gain. Core Retail Sales excluding automobile sales, reflects more closely to the GDP. Consumer Price Index and Core CPI, which excludes food and energy, will release at the same time on Friday. These scheduled news events pose an opportunity for trading with a high probability trade strategy and the right instruments.
Enter Nadex spreads, specifically Nadex EUR/USD spreads. Spreads have a floor and ceiling marking the range in a market one can trade. When the underlying market goes beyond those points, risk and profit stop but the trade is not stopped out. This offers a great possibility for traders without the downside of unlimited risk, as when trading futures and spot forex.
A Strategy For Any Market Direction
For any scheduled news event, it is never known which direction the market will move. An Iron Condor strategy offers a high opportunity strategy as it can profit regardless of the direction the market moves. This strategy profits from the pullback of the market, which is the tendency after the move in reaction to the news.
For set up, one spread is bought below the market and one spread is bought above the market. The ceiling of the bought lower spread should meet the floor of the sold upper spread and be where the market is trading at the time of entry. Entry can be as early as 7:00 AM ET for 9:00 AM ET expiration. Each spread should have a profit potential of around $15 for a $30 combined profit potential.
Once the trade is placed, stops can be added to further manage risk at the 1:1 risk reward points. To easily figure where those points are located, simply double the combined profit potential, which in this case would add up to 60. Stops should be placed 60 pips above and below from where the market was at entry for a 1:1 risk reward ratio. As the market pulls back closer to center as time expires, the greater the profit is made. At center, between the two spreads, is where max profit is made the closer to settlement or at settlement.
For free day trading education on Nadex spreads, binaries or futures and forex go to www.apexinvesting.com. A community of traders helping and supporting other traders to reach their trading goals.