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Trade Forex Market News

Discussion in 'Forex News' started by joenews, Dec 23, 2011.

  1. joenews

    joenews Newbie

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    December 20, 2012

    Live chat room trade was Canadian CPI data.
    Market was expecting 0.1%
    we were using a trigger of 0.5%
    actual number released was 0.2%.

    This was not a big surprise to the market however it was less than expected and less than the prior month's reading of 0.3%.

    Our chat room call was a (HOLD) and no trade-off of the news itself

    The initial reaction off the news was a spike up in the USD/CAD.

    We waited approximately 4 minutes and then SOLD this pair which was basically a fade off of the spike up in price.

    This trade resulted in a 30 pip profit.

    We also opened a BUY order on Oil and used the commodity rally as additional confirmation to our USD/CAD (SELL) trade.

    December 21, 2012

    Live chat room trade was US existing home sales.
    Market was expecting 5,040,000
    we were using a trigger of 30,000
    actual number released was 4,420,000

    This was certainly a big difference from what the market was expecting and it did hit our trigger number. However in our analysis and update prior to the economic data released, we anticipated a higher probability of a market surprise for this number due to the national Association of realtors report of grossly overestimating their figures over the past couple of years.

    We knew there was going to be a substantial reassessment of all of the prior news releases from the national Association of realtors and there would need to be some serious downward revisions.

    Our chat room call was a (SELL) immediately upon confirming the news.

    This trade resulted in approximately 19 pips within just a few minutes after the news was released and we took the profits that were available up to that moment.

    December 22, 2012

    Live chat room trade was US GDP.
    Market was expecting 2.0%
    we were using a trigger number of 0.5%
    actual number released was 1.8%

    This was not a big difference from what the market was expecting however it was a disappointing number. At the same time US GDP data was released, we also received the weekly jobless claims which were better than expected and continued to show improvements in this area. This gave a mixed reading and since the US GDP did not hit our trigger number,

    Our chat room call was a (HOLD) and no trade off the news itself.

    Due to the lack of technical setups, we did not call a trade after the news.
    We will not be trading the rest of December 22 and we will be off on Friday, December 23 due to a lack of holiday trading volume.
    Dec 23, 2011
  2. joenews

    joenews Newbie

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    Trading economic data

    Since this week is considered as one of the slowest trading weeks of the year (end of year and New Years holiday) I will take some time to outline a few strategies we use for trading the news with currencies.

    Below is a recent post on our site:

    Trading economic data

    In this article I will focus on trading economic data using currencies in the FX market.

    There are a few hard and fast rules you must know before trading the news if you are new.
    First of all, expect a great deal of volatility and prepare yourself for the possibility of financial loss.
    However there are strategies for preventing losses and it is very possible to successfully trade the news with hardly a losing trade.

    It will first of all, involve understanding the impact of economic data to the currency you are going to trade. This will take some practice and I strongly recommend using a demo account but please remember that a demo account may perform differently than a live account even though brokers may tell you otherwise.

    There are times when economic data is released and it surprises the market because the actual numbers that are released deviate far from the expected numbers analysts and economists were expecting.
    Occasionally, even though the headline economic data may actually hit a trigger number that will signal either a buy or sell trade, price may still not move in the direction you expected.

    When this happens, it is either that you have miscalculated or misunderstood the data or perhaps there were subcategories within the report that altered the actual outcome and possibly previous releases of the same data. For example, if the market is waiting for the release of the weekly US job claims numbers and it is widely expected that the number of individuals seeking unemployment insurance is 350,000 and the actual number is 250,000. At first this could be an indication that there is some improvement however deeper into the report are the revisions and it shows that the prior week's numbers were actually much higher than previously reported. This could potentially cancel the positive headline number and show a possible trend in an increasing number of individuals seeking unemployment insurance.

    The reaction, would most likely be a spike in one direction on whatever currency you are trading that is sensitive to US economic data and then, possibly a reversal.

    This spike and reversal points to a great deal of volatility and the possibility of loss. Here is where you need to anticipate problems.
    One of your adversaries in trading the news is possibly your broker.
    Since many brokers will use the times that news is released as an opportunity to take advantage of the inexperienced, you must be aware of some of the tactics brokers use.

    Freezing price feeds or issuing re-quotes during news events will often times frustrate a new trader.
    Entering a trade order with a pre-selected stop loss is also often times a big mistake and an opportunity for brokers to clean up. Meaning that by entering a stop loss order, they will obviously see where the order is placed and if at all possible, they will hunt stop loss levels and hit them.

    Most experienced/successful news traders will use at least a 100 pip mental stop loss
    Please understand that this does not mean you should always use a 100 pip stop loss!
    It is simply the understanding that when you trade on a news event, you should expect volatility and also the possibility of unfair practices by your broker.

    Since most news traders are using a 100 pip mental stop loss, they do not over expose their trading account by putting too much money on one particular trade.
    They will reduce the amount of capital placed on a trade which would incorporate the possibility of getting stopped out by 100 pips. This would not wipe out their trading account. It is important to factor potential losses and two determine the proper lot size or margin/leverage used.

    Again please understand that I am not stating that every trading opportunity should require a 100 pip stop loss There are obviously times when clear support and resistance levels will continue to hold even during times of extreme volatility and these levels can be used as potential stop loss placements as well. Often times these support and resistance levels will be much less than 100 pips difference from the entry price.

    Only experience and practice will give you the understanding you need to determine if there is a need for a 100 pip stop loss or not.

    Another rule that is considered one of the top three, is to have a strong respect for the market.
    This means that if you ever find yourself in a trading situation that you do not understand, walk away!
    There is simply no excuse for throwing real money into a trade when you are not certain of what you're doing. You can practice and act reckless all you want with a demo account but you should never do it with real money.

    If a news release confuses you or something doesn't seem right such as how price is behaving on the chart compared to the economic data, do not place the trade or wait until you have had sufficient time to determine what is causing the reaction of traders in price.

    Simply put, there will always be another trading opportunity. On the average, there is economic data available almost every trading day of the week throughout each of the trading sessions from the Asian, the London and New York session.

    Finally, understand that the ultimate goal is to create a trading plan that you can duplicate day after day. Your job is to become a student of the market and realize that your education will be endless.
    Even after many years of trading, I'm always learning something new and I expect this will continue for the next 20 or 30 years of my trading career.

    News Daddy
    Trade Forex Market News.
    Dec 27, 2011
  3. joenews

    joenews Newbie

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    January 17, 2012

    Live chat room trade was UK CPI and EUR ZEW.
    Market was expecting 4.2% Y/Y on UK CPI and -49.2 German ZEW

    actual number released was 4.2% UK CPI and -21.6 on German ZEW

    Since UK CPI came in about as expected we placed a HOLD on that report
    however we traded the German ZEW 30 minutes later and BUY on EUR/USD since the
    reported numbers hit our trigger number.

    Our chat room call was a (HOLD) on UK CPI and (BUY) on German ZEW.

    EUR/USD moved up approximately 30 plus pips after the German ZEW report and then eventually rolled
    over to retest the 1.2710 area.

    News Daddy
    Trade Forex Market News
    Jan 17, 2012
  4. joenews

    joenews Newbie

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    Are you trading US jobless claims tomorrow? Read this first.

    Thursday, January 19, 2012 we will be trading the weekly US jobless claims economic announcement.
    As with most economic announcements/indicators, the importance changes with market cycles.

    There are actually times when the jobless claims numbers are less important than other times.
    At the present time however it is a good idea to keep track of the weekly jobless claims but
    it's best to be paying attention to the overall trend rather than get too focused on any
    individual weekly report.

    Also keeping in mind that seasonal influences can have an impact on this number such as holidays.

    Last week's initial claims numbers were actually revised to over 400,000 and this is
    a very important level. And if this trend continues it could highlight specific patterns
    or trending directions.

    It is also important to be aware of the "current threshold level" because this could
    help confirm employment growth or the lack of it. For sample if jobless claims continue to
    print a number of above the current threshold level it would obviously point to
    employment growth slowing rather than an uptick.

    Please keep in mind that the release of other reports and information should be taken
    into consideration when one report at a time like this, as there is often other data that
    when released at the same time can mix the market sentiment.

    Lastly, most traders will tell you that a considerable change in the reported numbers
    are at least 30,000 to 60,000 up or down from the expected number.
    Anything less can be merely price fluctuation.

    Good luck trading tomorrow,

    News Daddy
    Trade Forex Market News
    Jan 18, 2012
  5. joenews

    joenews Newbie

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    January 20, 2012

    Italian industrial new orders beat what the market was expecting
    printing 0.1% versus the expected -2.4%
    this, in addition to comments released from Greece
    help to move price back up and bounce off of the 1.2900 level.
    This report is not a favorite one of ours to trade however
    since economic data/reports are used as another form of
    confirmation and additional trading opportunities,
    we keep an eye on all announcements if we are currently in a trade.

    GBP retail sales was the first report of the morning we were looking to trade.
    This number came out as expected printing 0.6%
    compared to the expected 0.6%.
    As with the Euro/USD, GBP/USD continued to move higher after finding
    some support and bouncing off of the 1.5660 area.

    Our final trading opportunity was with the Canadian
    CPI and wholesale sales numbers
    CPI printed -0.6 versus the expected -0.1
    core CPI printed -0.5 versus the expected -0.3
    wholesale sales printed minuses are .4% versus the expected 1.0%
    this created an opportunity for us to trade and take approximately
    15 to 20 pips on the initial reaction after the news was delivered.

    Trading the news will oftentimes create an equal opportunity for all to trade
    because theoretically no one should know the data prior to the moment it is released.

    News Daddy
    trade Forex market news
    Jan 20, 2012
  6. edwarddevis

    edwarddevis Newbie

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    Thanks for statistics i am new to the market, and want to learn from people like you.
    Feb 23, 2012
  7. Vaibhavi merchant

    Vaibhavi merchant Banned

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    Hey joenews, you are doing great man, keep it up by the way which broker are you using so far and what is your trading experience ?
    Feb 29, 2012
  8. forex1

    forex1 Newbie

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    I read all post in this topic i'm happy to see this great information to us.
    Thanks to author thanks again.
    Mar 20, 2012

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