Six UK Reports Offer Overnight Trading Opportunity


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By Darrell Martin

At 4:30 AM EST, Wednesday, January 4, six reports will be released in the UK that can influence trading. Most of them register “low” on the importance scale, but all together can present traders with an overnight trading opportunity.

The reports are:

  • M4 Money Supply

  • Mortgage Approvals

  • Net Lending to Individuals

  • Services PMI

  • Mortgage Lending

  • Bank of England Consumer Credit

Services PMI receives high importance since it is viewed that purchasing managers can have early access to company performance data, which can indicate overall economic performance.

Generally, the reports are forecast to remain the same as the previous outcomes, with only minor variances. However, even small fluctuations can cause some movement in the market.

The instrument to utilize is the GBP/USD and an Iron Condor strategy using Nadex spreads could be beneficial. This strategy is preferred when movement is expected but direction is unknown. The market can move up down or stay in a range and still have the potential to profit.

With this news being released very early in the morning Eastern Time in the US, a trade can be entered the night before as early as 11:00 PM, with 7:00 AM expirations. This allows time for movement in the market after the news is released.

One Nadex GBP/USD spread is bought below where the market is trading. The ceiling of the bought spread should be where the market is trading. The other spread is sold above where the market is trading. The floor of the sold spread should meet the ceiling of the bought spread and be where the market is trading at the time.

Each spread should have a profit potential of at least $17 for a combined minimum profit target of $35. The spread scanner enables traders to immediately see the reward potential, simply find the spreads that meet the parameter of the trade and execute the trade.

By placing both parts of the trade, it is as if you are encircling an area in which the market will be contained. The ceiling of the lower spread must be equal to the floor of the upper spread. The equal ceiling and the floor levels should be where the market is trading at the time of entry.

Stops should be placed where the market would hit 70 pips above and below where the trade was entered. Max profit is when the market is between the spreads at settlement.

When news is released, there is always the likelihood of the market making a move, pulling back or ranging. This makes the Iron Condor an ideal strategy.

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