Scheduled News Events Can Make For Great Trades

There are a variety of scheduled economic news reports that come out monthly, quarterly or a specific number of times per year. Traders watch for these reports to get a read on the economy and on how businesses are doing. From the reports, they place their trades accordingly and cause movement in the markets. In addition, the reports come out for countries all over the world. What does this mean for the retail day trader? This creates trade opportunities at all different times in all different markets, not just the US markets during US working hours.

Markit To Release UK Services PMI

A case in point is 4:30 AM ET Thursday, September 3, 2015, Markit a leading global provider of financial information with 19 offices worldwide, will release the UK Services Purchasing Managers Index (PMI). The report may come out at 4:30 AM ET but the trade is put on the evening before at 11:00 PM ET. This report affects the GBP/USD so that would be the chart to follow. However, for this trade setup and strategy you would trade Nadex GBP/USD Spreads.

Traders follow this report because it is a leading indicator on the health of the economy for the UK. It is an index based on a survey of purchasing managers asked to rate business conditions like employment, production, orders, prices, etc. Since this is based on Services PMI, the survey is taken in the services industry.

Nadex Is A Regulated Chicago, US Based Exchange

Nadex is an exchange regulated by the CFTC and lists binaries and spreads. If you have never traded spreads before, they have a floor and a ceiling. Based on the direction (long or short) of your trade, you can only profit up to the floor or the ceiling and you cannot lose past the floor or the ceiling of the spread. For this strategy called an Iron Condor, you will trade two Nadex GBP/USD Spreads entering at 11:00 PM ET, Wednesday, the night before the release with expirations at 7:00 AM ET, Thursday. You will buy a spread below the market but with its ceiling being where the market is trading at the time. You will also sell a spread above the market but with its floor being where the market it trading at the time.

You want your profit potential to be $35 or more. Based on market analysis done on the market’s reaction to this report being released in the past, it was found that the market moves around 35 pips or less and then pulls back. This is what you want to see the market do with this strategy. Max profit for this trade is when the market comes back to center, between your spreads, where it started when you placed the trade. You can leave your trade on until expiration to give the market time to get there.

If you want to learn more about Nadex and how to trade binaries and spreads and the news, go to www.apexinvesting.com. Nadex can be traded from 49 countries not just the United States.