Consistent Market Reaction To Specific News Can Lead To Trading Opportunities
Trading the news has its advantages. The same news reports often cycle through monthly, quarterly, even annually. Tracking market reaction to the news, you can find consistencies in distance of market movement.
US Durable Goods Orders and Core Durable Goods Orders is released monthly and tends to move EUR/USD with some consistency. This can make for a possible monthly scheduled trade. It was found that an Iron Condor strategy can be a high probability strategy for just this kind of market movement for this news event.
Thursday, February 25, 2016 at 8:30 AM ET all three reports will be released.
For an Iron Condor, one can buy a Nadex EUR/USD spread below the market with the ceiling or top of the spread where the market is trading at the time, and sell a Nadex EUR/USD spread above the market with the floor or bottom of the spread where the market is trading at the time.
The market can also stay in a range and lead to profit on both sides as well. Max profit would be when the market is right between spreads at expiration. For every pip away from the center between spreads the market is, then it’s $1 less in profit.
The market can move 30 pips up or down and the trade will be at a breakeven point.
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