Straddle The Market And Be Ready For A Move In Either Direction With UK News

[sherrie]

By Darrell Martin

Three reports will be released Wednesday, March 16, 2016, at 5:30 AM ET providing a trade opportunity. If you don’t like being up this early in the morning, no worries. This trade setup calls for entry the night before, Tuesday at 11:00 PM ET for 7:00 AM ET expirations using Nadex GBP/USD spreads.

Fortunately, you won’t need to wake up in the middle of the night. You can put the trade on the night before. This trade strategy is low risk, and ready for the market to go in either direction. A Straddle strategy has two spreads on both sides of the market.

A Low Risk Trade: Stops Aren’t Necessary

You can sell a Nadex GBP/USD spread with the ceiling where the market is trading at the time and buy a Nadex GBP/USD spread with the floor where the market is trading at the time. Both spreads should have a max risk of $20 each for a combined total risk of $40. A Spread has a floor and a ceiling, which identifies the range of an underlying market you can trade. You can’t win or lose past the floor and ceiling, which provides defined capped risk. Since this trade has such low risk, there is no need to set stops.

Once you have entered the trade, you need to place your limit take profit orders. Based on previous market reaction to the release of 12-24 past months of these reports, it was found that a Straddle strategy with a max risk of $40 is high probability for a profitable trade. For a 1:1 max risk/reward ratio, set your limit take profit orders where the market would move 80 pips up or 80 pips down. The breakeven points would be where the market hits 40 pips up or down. These reports tend to move the market, and if one side profits, leave the other side on should the market pull back, the other side may profit as well.

To find just the right spreads at a glance, you can utilize the free Nadex spread scanner available at www.apexinvesting.com. For an example of how easy it is to identify spreads, their floor and ceiling and respective risk reward, see below.

Nadex is a US based CFTC regulated exchange and can be traded from 48 different countries. At Apex Investing, you will find free education on how to trade futures, forex and CFDs as well as Nadex binaries and spreads.

[iNitrox1]

I’m finally going to try one of these straddles. I believe I have drawn this trade on paper to get a better visual of the trade and have an idea of how it’s going to go down except for one thing… it’s Tuesday, 10:43pm ET, ready to setup the trade using a Nadex GBP/USD spread for a 7:00am ET expiration… Looking at the spread scanner, I don’t see where it’s possible to get a spread with a 7:00am ET expiration. What am I not seeing here?

[MATRIXBINARY373]

Not quite 11pm EST (11pm - 7am Spread)

[iNitrox1]

Thank you, I thought I may have jumped the gun and now I see I did

[iNitrox1]

I believe this is what it’s supposed to look like. Have I set it up correctly? I will let the trade play out, and see what my first straddle looks like in the morning. Thanks

[MATRIXBINARY373]

Everything looks good. However your TP levels are a little more than 1:1 risk/reward. I am not sure how big of a thing that is though.

I tend to be overly cautious however. (yes this is coming from the guy that bought a $92 binary right before expiration and held it to expiration ) and will actually set my own TP before the 1:1

But i think it all comes down to how comfortable you are in the trade.

[iNitrox1]

Thanks for the follow up. I did this DEMO trade to see if I had an understanding of something that I may want to try more of in the future. I think I may be missing a few key aspects and will look into this further. I will look into the calculator and check into some of the educational info on these straddles. I will take the learning these slowly as I already have a lot on my plate in other strategies and systems.

Big thanks for the assist, much appreciated.