How To Trade On Manufacturing And Production Reports
Scheduled news events are great opportunities for traders if they have realistic expectations and a plan.
Apex Investing has a calendar posted monthly that lists all the news events that are potentially good trading opportunities. To come up with a news event trade and to determine if a news event is trade worthy the following needs to be analyzed:
- What news is expected?
- Is this news event consistent?
- Does the news event consistently impact the market?
- What is the impact it consistently has?
Once you have that information, a trading plan can be developed to trade that event. On the Apex News Trading Plan Calendar for Friday, January 16, there is a plan for the news releases of the US Capacity Utilization Rate and Industrial Production.
These reports are consistently released monthly and if the actual numbers released are greater than the forecast numbers, then it is good for currency. The Capacity Utilization Rate is a measured percentage of available resources being utilized by manufacturers, mines and utilities.
When producers are nearing full capacity they tend to raise prices. The higher costs are passed on to the consumer, and this is known as consumer inflation; for this reason the markets tend to react to this news release.
The second news report, Industrial Production is also a leading indicator of economic health. It measures the change in total inflation-adjusted value of output produced by manufacturers, mines and utilities. It is also called Factory Output. Both of these reports will be released at 9:15 AM EST on Friday.
Apex found to trade these reports an Iron Condor strategy is effective to trade the EUR/USD. The market will tend to react directly after the news and then settle. With an Iron Condor you use Nadex Spreads.
Sell the upper spread with the floor being at market and buy the lower spread with the ceiling being at market. Therefore, the upper spread’s floor has the same underlying price as the lower spread’s ceiling.
You can enter your trades as early as 9:00 AM EST with an expiration of 11:00 AM for a minimum profit of $30.
A complete monthly news plan is available at Apex, to trade a variety of markets based on numerous news events. If you would like to learn more on how to trade Iron Condors or trade other news events, 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 9000 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.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.