Trading Forex Nadex Binary Options To Trade The News

What if you could know exactly when the market was going to move and by approximately how much so you could make a killing while trading? There are some great benefits to trading the news.

If you don’t trade the news, you still need to know what news is happening to have proper expectations of the market. Knowing when the market is going to move and by approximately how much, would enable you to better know when to add on to a trade, when to tighten your stops, when to take profit and when to trade a potential reversal.

There are several websites out there that post news events, planned and breaking, including Benzinga. That’s where you can find out what’s happening and why it’s happening, and get some insight as to why the markets are reacting the way they are on your charts. By the time it shows up there though, or anywhere else, it’s already reflected on the chart.

With an unscheduled, surprise breaking news event, there is no way to know what the expected movement is, and the markets will have already reacted to it before you even contemplate there was breaking news. That’s very important to understand. There is no way you, as an individual trader, can compete with massive algorithms and hundreds of thousands of people on staff worldwide seeking out that information to have it in first. They’re going to have an edge, and all that information is built into the chart.

Basically, news is not news, it’s history, because you are finding out what already happened. It’s not like you are getting news coverage of what’s happening in the moment.

You want to know, for your trading, about the news that is planned, not the breaking news like the Ukraine engaging the Russians, which happened last Friday during trading hours. A lot of times news is Monday morning quarterbacking. It helps you explain what just happened in the market and why, but it doesn’t help you make money.

The kind of news you need to be aware of is the planned news with a scheduled time of announcement. You want to know what the expectations are on that news, and what the expected movements that we usually see are. Is there a way to take advantage of that average move? Will the market stay in a range, or does it normally just take off? Those are the questions we consider to help us plan a possible trade should the opportunity present itself. It doesn’t mean we are going to have a trade, it just means when the news comes out, at a certain time, with an average expected move, we will be prepared with a trade plan.

You don’t want to try and forecast the news and trade it directionally. You want to see if there is a way you can take advantage of how the market normally reacts when the scheduled news happens.

Nadex is very effective for these trades because they have options for day traders. You can do a straddle on these news events where you buy the upper spread and you sell the lower spread, so it doesn’t matter which direction the market goes, just that it goes far. Interestingly, there aren’t that many trades on news that actually move as far as you think.

When that’s the case, you can do an opposite of a Straddle, which is an Iron Condor. If the market reacting to the news announcement usually stays in a range, you can do an Iron Condor. In this case, you buy the lower spread and sell the upper spread. Even if you choose not to trade the news, you need to be aware of the news.

If you have proper expectations of the moves around the planned news announcements, you can adjust your trading, maybe stay out, or tighten your stops, not add on to a move, or get ready for a strong reversal after a spike in volume.

Below you can see a list of news announcements scheduled for the week of August 18 – 22 along with the trading plan details.

Tuesday, August 19

• 4:00AM Current Account coming out by Europe impacting the EUR/USD

Looking at past releases for this event, the move on the EUR/USD has been 7, 8, 17, 12, 14, 9, 7, 8, 7, 11, 2. Looking at past moves, it’s not a big market mover. The market tends to stay flat, so an Iron Condor is a good strategy to use. You want to sell the upper spread and buy the lower spread making sure there is 20 pips of profit available. That’s what you could make but more importantly, it’s the minimum profit potential you will require out of the spreads to enter the trade, otherwise there is no trade.
You can look for an entry as early as 11PM the night before for a 7AM expiration

• 4:30AM GBP CPI report is released affecting the GBP/USD

This can move 50, 60, 70 pips in the first 5-15 minutes if it doesn’t make that kind of move, then it will probably only move less than 20 pips. Since it’s very inconsistent, it’s a “be aware” news event. This is a good one to look to trade the pullbacks from spikes in volume; you can use the Apex spike striker strategy.

• 8:30AM US CPI, Core CPI, Housing Starts and Building Permits Reports are released

The above events impact the USD, therefore we can look at the EUR/USD to trade. Past movements have been 14, 25, 15, 18, 18, 20, 30, 13, 8, 5, 60. A good trade plan for this release would be to go for a minimum 20 pip profit, an average of the past moves, and enter a trade at 8AM for a 10AM expiration. Since it’s a relatively small move, an Iron Condor would be an excellent strategy: buying the lower spread and selling the upper spread. This trade can be left on until expiration. The closer it expires to the ceiling of the lower spread, and the floor of the upper spread, being in the middle of the Iron Condor, the closer to max profit the trade will be. In addition, if you trade copper, you need to be aware that Housing Starts news affects copper, as copper is needed to build homes.

• 7:30PM AUD RBA Governor Stevens will be speaking just be aware.

Wednesday August 20, 2014

• 4:30AM GBP/USD Asset Purchase Votes, Official Bank Rate votes; just be aware.
• 10:30AM Weekly Oil Inventories, trade the pull back from the volume spike with Apex spike striker strategy.
• 8:30AM CAD Wholesale Sales, minor event; just be aware.
• 9:45 HSBC Flash Manufacturing can affect JPY and AUS which can have some crazy moves, so just be aware.

Thursday, August 21, 2014
All Day, be aware of the Jackson Hole Symposium the financial symposium.

• 2:00AM CHF Trade Balance Report affects the USD/CHF

Past movements have been 28, 17, 17, 3, 38, 14, 8, 5, 25, 35, 6.
You can enter at 11PM Wed for a 7AM expiration Iron Condor with a minimum profit potential of 30.

• 3-4:30AM PMIs from France, Germany, Flash Manufacturing; just be aware.
• 5:30AM UK Retail Sales impacts the GBP/USD

Past movements have been 25, 14, 11, 50, 45, 7, 11, 28, 18, 35, 45.
You can enter at 11PM Wed for a 7AM expiration Iron Condor with a minimum profit potential of 40.

• 8:30 USD Weekly Jobless Claims will affect the EUR/USD

You can enter at 8AM for a 10AM expiration Iron Condor with a minimum profit potential of 25 pips. Always look for volume spikes to trade the pullback. You can use the Apex spike striker strategy.

• 10:00AM USD Existing Home Sales and Phili Fed Manufacturing, impacts the EUR/USD

Enter at 9AM for an 11AM expiration Iron Condor for minimum 20 pips possible profit. Be ready for any Jackson Hole news.

• 10:30AM Natural Gas Storage, trade the pull back from the volume spike with Apex spike striker strategy.

Friday, August 22, 2014
Jackson Hole Symposium continues, specific events below.

• 10:00AM Fed Chair Yellen speaks, markets will react if she mentions any clues on what will happen to interest rates; just be aware.
• 2:30PM ECB President Draghi Speaks just be aware.

If you want to learn more on how to trade the news or track the Apex Trading Plan news calendar, go to www.apexinvesting.com. Apex Investing Institute offers free education, and free access to the Nadex Binary and Spread Scanner Analyzers. Member traders are invited to trade in the rooms, take advantage of trade signal services, have key indicators and access the Apex Forum. The forum content is updated daily and includes over 7000 members. In a supportive learning community of seasoned as well as up and coming traders, traders of all levels learn how to trade Nadex binaries and spreads in depth, as well as futures, forex stock and options, and gain an edge for successful trading overall.