By Darrell Martin
Four different versions of the Consumer Price Index (CPI) for Canada will be reported Friday, February 24, at 8:30 AM ET. These include the CPI, the Median CPI, the Trimmed CPI and the Core CPI. This index is the most important release related to inflation because of its early release and overall breadth. The Median version shows the general inflation trend removing extreme price movements for certain items. The Trimmed Mean version has yet another way to expose the underlying inflation trend. Finally, the Core CPI is the calculation excluding the eight most volatile items. The central bank watches this news for signs of inflation and considers this news as the bank sets the interest rates. Traders also watch this scheduled news and their reactions reflect through the moves in the market.
Day traders using Nadex USD/CAD spreads can also take advantage of the event with limited defined risk. Based on 12 - 24 past months of reports, the market tends to make a move and then a pullback. For that kind of move, an Iron Condor with two spreads, one sold and one bought, both ready to profit on the pull back, offers a high probability strategy.
The bought spread should be below the market with its ceiling where the market is trading at the time, and the sold spread should be above the market with its floor where the market is trading at the time. Each spread should have a profit potential of $15 or more. The trade in total should have a profit potential of at least $30. Beginner and advanced day traders using the Apex spread scanner can see all of this information for each Nadex spread, making it easy and efficient to identify spreads for strategies and accurate execution. Risk reward for each spread whether buying or selling, is displayed with color coded visually proportioned bars. The browser based spread scanner has intuitively designed filters to scan through the various Nadex instruments and bring up the right instrument and expiration time for the trade.
The trade can be entered as early as 8:00 AM ET for 10:00 AM ET expiration. Stops should be placed in the event the market takes off but doesn’t pull back. The 1:1 risk reward ratio points are where the market would move 60 pips above and below from where the market was at entry. The trade is profitable when the market settles and is between 30 pips above and below from where the market was at entry. . This provides a 60-pip wide range where the market can settle for making profit.
For free access to the spread scanner and day trading education, visit www.apexinvesting.com.