By Darrell Martin
Automatic Data Processing will release the US ADP Non-Farm Employment Change Wednesday, March 30, 2016, at 8:15 AM ET, which is the employment increase for the private sector derived from their payroll information. From January to February, it increased by 214k jobs and is forecast to be 194k this coming report. Regardless of the numbers being up or down, the report can be traded using an Iron Condor neutral strategy employing Nadex spreads.
A neutral strategy can be an opportunity to profit if the market moves up or down; for that reason the strategy is considered neutral. With an Iron Condor, you are buying below the market and selling above the market. Based on previous market movement to past report releases, it is recommended to set up the Iron Condor with a $30 or more profit potential. Buy a Nadex EUR/USD spread below the market, but with the ceiling where the market is trading at the time. Sell a Nadex EUR/USD spread above the market but with the floor where the market is trading at the time. Each spread should have a reward potential of $15 or more for a $30 or more combined profit potential. You can enter as early as 7:00 AM ET for 9:00 AM ET expirations.
Since you’re buying below the market and selling above the market, you want the market to do one of three things:
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Remain in the middle between the spreads until expiration, for full profit
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Move far enough for one side to profit, then pull back and the other side may profit as well
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Move, but remain in a tight range
Any of those scenarios and your trade will profit. Depending on your exact entry, the market can move up or down 30 pips and your trade will be at breakeven points. Be sure to place limit take profit orders after entering. To manage risk, you can place limit orders at the 1:1 max risk/reward ratio points where the market moves up or down 60 pips.
To easily find the right spreads with the right parameters, use the spread scanner available for all traders at www.apexinvesting.com. There you can choose your market, see the spread’s floors and ceilings listed down the center of the window, and the reward potential just to the outside left and right. Once you see the spreads you want, just click on the ticket icon, a ticket will open and you can place your trade. See an example screenshot below.
The spread scanner is designed for the trader to find the right spreads for the strategy at a glance and to fill orders instantly. For more news trades and strategies to trade them visit www.apexinvesting.com. Nadex is a US based CFTC regulated exchange and can be traded from 48 different countries.
