Retail sales and pricing news will be released this week for Canada. The four reports coming out Friday, August 19, at 8:30 a.m. ET, reveal consumer spending trends and any signs of inflation. Based on previous market reaction to this Canadian news the event, it can be traded using an Iron Condor strategy with Nadex USD/CAD spreads. An average market move is around 30 pips for this event.
Nadex spreads have a floor and a ceiling, which gives the price range of the market that can be traded. Profit and loss is limited to that range which can be traded long and short. For example, when trading a spread long, the trade can only profit from entry point to the ceiling and loss is only from entry point to the floor. This provides limited risk unlike trading futures or spot Forex.
The Iron Condor strategy is meant to use when the market is expected to make a move and then pull back, which tends to happen often with news events.
Profit potential for this trade should be $30 or more combined between the spreads. Therefore, split between the two spreads would be around $15 or more per spread. Entry can be as early as 8:00 a.m. ET for the two hour 10:00 a.m. ET expirations. Using the Apex spread scanner makes it quick and easy to find the right spreads for the strategy.
See below for an idea of profit and loss based on market movement for this trade.
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