A Trade Strategy For Trading Canadian Retail Sales

There are monthly releases of economic data that are scheduled news events. The advantage of this for traders is that with the right strategy traders can know when to enter a trade. Based on previous analysis of market reaction to the release of the CAD Retail Sales and Core Retail Sales, this news event makes for a good trade opportunity using an Iron Condor strategy and trading Nadex spreads.

On Wednesday, September 23, 2015 at 8:30 AM ET, Statistics Canada released the Retail Sales Report, a measure of change in the value of retail sales. The Core Retail Sales just excludes automobile information due to it being highly volatile. These numbers are important because they give an overview of economic activity for Canada.

The Market Can Move Either Direction With This Strategy

It is difficult to know ahead of time which way a market will move after a news release. That is no problem however, when trading the Iron Condor strategy. Whether the market moves up or down, as long as the market pulls back, there is a good probability of profiting with the Iron Condor. It was found with this news event that the USD/CAD tends to move and pull back.

You will want to enter two spreads. Sell a spread below the market with the ceiling being where the market is trading at the time and buy a spread above the market with the floor being where the market is trading at the time. Looking at the image below of the spread scanner, you can see the spread contracts are listed in the center. The contracts show up with two numbers: the number on the left is the floor and the number on the right is the ceiling. On the very left and very right of the scanner, you will see red and green showing the risk/reward for the spread contracts. The profit potential for this setup is $30 or more combined between the spreads. You want to enter your trade at 8:00 AM ET for expiration or closing at 10:00 AM ET.

The advantage of Nadex spreads is that they have defined capped risk. You cannot lose or profit beyond the floor or ceiling depending on the direction you entered the trade. With this Iron Condor strategy and a combined profit potential of $30 or more, the USD/CAD market can move 60 pips up or down and the trade will still be a 1:1 risk reward ratio. However, remember for this trade it was found based on 12 - 24 past months of reaction to previous releases, the market tends to move and then pull back. The closer to center the market pulls back to between the spreads, the higher the profit potential.

To learn more on the Iron Condor, Nadex spreads and to access the spread scanner go to www.apexinvesting.com.