The Importance Of Sticking To The Parameters When Trading News Events

News this Thursday includes the U.S. Preliminary Gross Domestic Product (GDP) and Price Index. The GDP is an important gauge for the health of the economy. It gives the broadest perspective for economic activity.

There are three releases for GDP: an advance, preliminary and final.

These reports are preliminary. The advance usually has the most impact however; the preliminary is still a good opportunity for a neutral trade strategy like the Iron Condor using Nadex EUR/USD spreads.

The Price Index is the change in the price of all goods and services, while the GDP focuses on the value. Both are reported in an annualized format.

These reports tend to move the EUR/USD market. However, after the move the market pulls back and can pull back to where it started as well.

That is why a neutral Iron Condor strategy using Nadex Spreads is the perfect strategy to capture potential profits for this news event. The reports come out at 8:30 AM ET, Thursday, August 27, 2015 so the best time to enter is 8:00 AM ET for 10:00 AM ET expiration.

Profit Potential $35 Or More, Stick To Trade Parameters

The way to enter is to find two spreads: buy a lower spread and sell an upper spread. If you plotted the spreads on an EUR/USD chart, the lower bought spread should have its ceiling where the market is trading at the time and should meet the floor of your upper sold spread.

The profit potential you want to set up for is $35 or more. It is important to meet those parameters; otherwise, it’s not worth taking the trade.

You can trade more contracts on each side of your Iron Condor, the lower bought spread and the upper sold spread, as long as you have the same number of contracts on the lower as you have on the upper.

Also, your trade can be left on until expiration, letting the market have time to pull back. The more it pulls back closer to center, the higher your profit with max profit being when the market pulls back to center directly between the two spreads.

Iron Condor Strategy High Probability Trade For These Reports

Going for a $35 profit potential in an Iron Condor strategy means the market can move approximately 70 pips in either direction and your trade still has a 1:1 risk reward ratio.

The market can move approximately 35 pips in either direction and your trade would be breakeven. This gives the market plenty of room to move before you would incur any loss. Fortunately, based on previous analysis from market reaction after these reports in the past, the market doesn’t normally move that much and tends to pull back.

This makes the neutral Iron Condor strategy a high probability trade for these news events.

If you would like to learn more about how to trade Nadex, news trades, Futures and Forex, please visit www.apexinvesting.com.

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