By Darrell Martin
Statistics Canada is due to release three monthly reports including GDP, Raw Materials Price Index and Industrial Product Price Index. The three reports cover overall economic activity, consumer inflation and pricing. Monthly scheduled economic news can move markets and when some consistency is found in the movements, trade strategies can be planned for trading the events.
This news comes out Friday, July 29, at 8:30 AM ET and for the average move of 25 pips with a pullback after, an Iron Condor is a neutral strategy that could work well. Using Nadex USD/CAD spreads, buy a lower range spread below the market and sell an upper range spread above the market. The ceiling of the lower spread should meet the floor of the upper spread and be where the market is trading at the time. Each spread should have a profit potential of around $13 or more for a combined profit potential of $25 or more.
The Iron Condor is a neutral strategy good for when it is unknown which direction the market will move. It is also a strategy good for when markets are expected to make a move creating implied volatility in the pricing, and then after the move, the market pulls back. When the market returns close to where it started, the spread bought below the market can profit some as well as the spread sold above the market.
How are the right spreads easily found for the Iron Condor strategy? Traders have discovered the spread scanner the ideal tool for quickly analyzing available spreads and pinpointing the ones they want. All pertinent information on listed spreads for a particular market can be found in one window. For a glance of the spread scanner, see below.
Enter this trade as early as 8:00 AM ET for 10:00 AM ET expiration. Look for spreads with the right amount of reward potential. Once found, open a ticket, verify ceiling and floor parameters and profit potential, and then place the trade. Stops should be placed at the 1:1 risk/reward points. Just double the reward potential of the trade; for this trade it would be 50. Place stops where the market would hit 50 pips above and below.
The spread scanner is free for all traders’ use and available with free day trading education at www.apexinvesting.com.
