By Darrell Martin
It’s always daytime somewhere in the world and on a typical midweek day, there’s a good possibility there is a scheduled news event. A news event, worthy of trading, using a planned strategy for a market move that’s had some consistency. Unfortunately, the day time news event on the other side of the world means it’s taking place in the middle of the night, Eastern Time, in the US. Fortunately, that doesn’t rule out trading the event while trading Nadex spreads.
Entering The Evening Before Early Morning News
Thursday, April 13, at 3:15 AM ET, Switzerland’s Producer Price Index news will be released. This tends to move the market and then the market can pull back. For that kind of move, an Iron Condor, poised to profit on the return of the market to where it was at entry, has a tendency for a high probability trade strategy. Entry can be made the evening before at 11:00 PM ET for a 7:00 AM ET next day expiration time.
One Nadex USD/CHF spread is bought below the market with the ceiling where the market was at entry along with one spread being sold above the market with the floor where the market was at entry. Once the news is released and after the market makes its move and starts its pull back, if it returns to where it was at entry, between the two spreads, full profit could be made at settlement.
Each spread should have a profit potential of approximately $17 or more for a combined profit potential of at least $35. Doubling that amount would be 70 pips, which is where stops should be placed and the 1:1 risk reward ratio points are when the total risk is $35. Nadex is a US based CFTC regulated exchange and their spreads already provide capped risk, but the stops keep risk to a realistic amount for the trade.
Should the market pull back and be anywhere between the two breakeven points of 35 pips above and below from where it was at entry, the trade will make some profit. This is a 70 pip wide range the market can settle in, giving the trade ample room for profit.
To learn more strategies for trading the news, visit www.apexinvesting.com.