By Darrell Martin
News events that affect the AUD/USD typically happen in the evening within the US time zones as is the case with this one. The Australian Bureau of Statistics will release the Building Approvals report which is the change in the number of new building approvals for the previous month. The release will be at 9:30 PM ET Wednesday, July 29, 2015. For this trade you can enter as early as 9:00 PM ET for 11:00 PM ET expirations.
Trade Recommendation Based On Market Reaction To 12 - 24 Report Releases
This report is an excellent indicator of future construction which is an economy stimulator. The reason being that building approvals are the first step needed to begin building. There is so much material, labor and services required for building. The last report came in with a 2.4 percent increase and this report it is forecast to be -0.9 percent. When the actual comes in greater than what was forecast, that is good for currency. For our trade however, whether it is good for currency or not is irrelevant. It was found through market research based on 12 - 24 past reports that the market will typically move but then pull back after these reports.
Never Force A Trade
To set your trade up, building an Iron Condor strategy, using Nadex spreads, enter two spreads. Buy a lower AUD/USD spread with the ceiling being where the market is trading at that time. Sell an upper AUD/USD spread with the floor being where the market is trading at that time, and meeting the ceiling of your bought lower spread. Be sure that your setup has a profit potential of $30 or more. To do this, have around $15 profit potential on the lower spread and around $15 profit potential on the upper spread. If you are unable to set up your Iron Condor with those conditions then don’t take the trade. It’s never good to force a trade and enter when the entry is less than optimal.
An Iron Condor strategy is a neutral strategy with a large wingspan. For this trade the market can move 15 pips up and you will profit on the lower bought spread but be break even on the sold upper spread. This will bring you a profit of around $15 from the lower spread. The same would be true if the market moved 15 pips down, only you would break even on the bought lower spread and profit around $15 on the sold upper spread. The AUD/USD could move 60 pips in one direction and your trade would still have a 1:1 risk reward ratio.
Nadex stands for North American Derivatives Exchange. It is an exchange located in the US and is regulated by the CFTC. Nadex has Binaries and Spreads for trade and can be traded from 49 different countries. Apex Investing Institute posts a news calendar weekly complete with recommended strategies to trade certain events. To see more trades visit www.apexinvesting.com. For a more in depth look at an Iron Condor strategy see The Awesomeness Of An Iron Condor.