Market Overview

Three Ways to Trade the Natural Gas Inventory Report Using Nadex Binaries

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Every Thursday morning at 10:30 AM EST the Natural Gas Inventory is released.
If the inventory is higher than expected, then the natural gas market usually drops and if the report is lower than expected, it usually rises in price.

There are several ways to trade this report. The first way is using Magnet Volume Price levels that are plotted on the chart to determine the Magnet Volume Channel. To create your channel after the report is released and NG has made its move, look at volume levels for 5, 10 and 15 minutes, on a 5 minute chart for NG. The 5 minute bar that has the greatest price movement will most likely have the highest volume, creating a spike in volume. Plot horizontal lines on either side of this 5 minute bar. These lines will create your channel.

Use Nadex daily binaries, rather than intraday. Let price move either up or down and by at least a 1-1.5 deviation move, then using the channel as a target look for OTM strikes on your channel border. If the market has moved up since the report, then sell an OTM strike that is on the channel. If the market has moved down since the report, then buy an OTM strike that is on the channel. The channel will be your magnet area and draw the price up to it thereby creating you a profit on your OTM binary. Note the chart below as an example; however. the times on this chart reflect PST.

To view image click HERE
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The second way to trade the NG is to use the expected range for the hour the report is released, between 10:00 AM and 11:00 AM EST again using Nadex daily binaries. At the beginning of the hour, look for strikes just outside the high and low of the range. Set a limit order for $30 to sell the strike at the top of the range and set a limit order for $70 to buy the strike at the bottom of the range. If the market moves close enough to one of your strikes when the report is released your order will fill. Set up your take profits: a $6 buy to exit the sold binary, and a $94 sell to exit the bought binary.

The third way to trade the NG report is to use the Spike Striker system. Using the Spike Striker indicator shows you when there is a spike in volume for a bar, where the volume is twice the volume of the previous bar’s volume and twice the volume of the following bar’s volume. Then the next bar would have to break the last bar’s high or low, in the opposite direction of the bar with the volume spike. For example, if the bar with the volume spike was long, then the last bar would have to break the low of the bar after the volume spike bar.

Basically, a Spike Striker is a bar with a significant spike in volume and you trade the retrace from the volume spike bar. So, when the report comes out, the market will spike. When it does, you can choose a Nadex daily binary ITM in the opposite direction of the volume spike bar. Exit the ITM binary when it reaches $6 for the sold strike and $94 for the bought strike. Or, you can choose a close OTM strike around where the price started from. Exit the OTM binary when the market retraces back and the binary becomes ATM with a price around $43 to $57.

To see an example of how to do this trade click HERE

To get access to the indicators to help trade the above systems and for a complete monthly calendar of scheduled news events and strategies to trade each one, 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 8000 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.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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