One Way To Trade New Home Sales News

Similar to how Existing Home Sales can stimulate the economy, New Home Sales can as well. The same can be said of mortgage applications, agent payments, and new decor, landscaping, and furniture purchaes. All of this activity ripples through the economy. Therefore, traders watch and trade based on this news.

The day trader can also trade it using an Iron Condor strategy with Nadex Spreads. Nadex Spreads have capped risk on both its binaries and spreads, so there are no margin calls or requirements. The risk only needs to be covered and stops placed to further keep risk in check.

Two Spreads: One Long and One Short

The US New Home Sales will be released Friday, December 23, at 10:00 AM ET. Trades can be entered as early as 9:00 AM ET for 11:00 AM ET expirations. One Nadex EUR/USD spread could be bought below the market, while its ceiling is capped where the market is trading at the time. Simultaneously, another spread could be sold above the market, with its floor where the market is trading at the time. The trade should have combined profit potential of $30 with each spread having around $15 or more profit potential or no trade.

With this news, the market tends to react and then pull back. Pulling back to center between the two spreads and being there at settlement brings max profit. The market settling anywhere between the two breakeven points, being 30 pips above and below where the market was at entry, will also bring profit.

To see how the market movement affects profit and loss for this trade, see the image below.

Notice in the image how stops are best placed where the market would reach 60 pips above and below from where it started. While more spreads can be traded, there should be the same number of spreads on each side of the Iron Condor.

Free access to the spread scanner and free day trading education can be found at Apex Investing.