Signals for 27/02/08

Hwllo, how are you doing, I hope you had a great night rest, now lets get to business.

Let's talk about today.

1. Wednesday, February 27th, 2008 (4:30 a.m. New York Time) UK
At 4:30 a.m. we will have UK GDP q/q coming out. I am going to use 0.1 trigger on this. On the retracement, I would enter pretty close to the pre-release price. If it comes out at 0.7% or higher, you can buy GBP/USD or GBP/JPY; if it comes out at 0.5% or lower, you can sell GBP/USD or GBP/JPY. Either way, expect about 40 pips on GBP/USD and about 60 pips on GBP/JPY.

2. Wednesday, February 27th, 2008 (8:30 a.m. New York Time) USA
At 8:30 a.m we will have U.S. Core Durable Goods. It was kind of cold indicator recently but I think it may start moving the market. I would trade about 1.5 deviation on it. It is expected to come out at -1.4%. If it comes out at 0.1% or higher, I would buy USD/JPY. If it comes out at -3.0% or more negative, I would sell USD/JPY. If the trigger is hit, I would expect 25 to 30 pips of a price action on the USD/JPY. It will also depend on the trend right before the report.

3. Wednesday, February 27th, 2008 (10:00 a.m. New York Time) USA
At 10:00 a.m. we will have U.S. New Home Sales coming out. It is expected to come out at 600K. Be careful on USD/JPY on this (watch the video for more details). I think 50K trigger either direction should be sufficient on this. If it comes out at 650K or higher, I would buy USD/JPY and I would expect 30 to 40 pips price movement. If it comes out at 550K or lower, that would be a sell signal on USD/JPY and I would look for 25 to 30 pips of a price action.

That's all for today. I wanna wish you a good luck in your trades.
Have a great day today and always.

Hello Reader

Hey,
I know you must really be angry with me, I am so sorry, i have been kinda busy these days, you know i am a student and workload just came through that i had to attend to and so i was not able to update you. I am really so sorry about that. I am. Please bear with me, we will soon be back on and running with the signals and strategies i promise.
I hope you are making it really in the forex, really i have been off the markets for a while but not to worry, we are still together partners in the money making business.
I am with you. Have a great day today and always.

Trading Signals for Wednesday, 16th Jan, 2007

Hello, how are you doing today, I hope you are great.

Let's first review what happened on Tuesday.

On Tuesday we had two reports that were worthy watching and possibly trading.

At 4:30 a.m. we had UK CPI y/y headline coming out. It came out 0.1 higher than expected so it did not let us trade it. Because at the same time the core number was down by 0.1 it was definitely a no trade. The price went up about 20 pips on the headline number and then it retraced completely and went the other way because of the core number. It was a good idea to stay away.

Then we had German ZEW. Nothing really to take about.

Then we had U.S. Retail Sales X Autos coming out. We were looking to sell USD/JPY if it came out -0.6 or lower with -0.1 consensus. Although the trigger was not hit, we did get a negative deviation but I did not think it would be enough to enter the trade. USD/JPY moved about 92 pips in the first hour of the report. However, I personally stayed out as it was a no trade for me. Well, better safe than sorry, there will be plenty other opportunities.

Let's talk about Wednesday.

1. Wednesday, January 16th, 2008 (4:30 a.m. New York Time) UK
At 4:30 a.m. we will have the U.K. Average Earnings + Bonus. I will be trading it with 0.2 trigger. If it comes out at 4.1 or higher, I would buy GBP/USD. If it comes out at 3.7 or lower, I would sell GBP/USD. If there is a conflict with unemployment rate, I would stay out of the trade. Ideally, you want to see unemployment number coming out as expected or coming the opposite direction than the Average Earnings. Last month we had 0.2 deviation and it moved the market about 30 pips in the first couple of minutes.

2. Wednesday, January 16th, 2008 (8:30 a.m. New York Time) USA
Then at 8:30 we will have U.S. Core CPI coming out. I would trade this on EUR/USD. We did not have a lot of deviations on the core CPI but if we get a deviation, I believe the EUR/USD will perform best. Stay away from USD/JPY on this report as it is a quite unpredictable pair on this report. On 0.1 trigger expect about 40 pips price action. If the Core CPI (also known as CPI X Food and Energy) comes out at 0.3% or higher, it would be good for the dollar so I would sell EUR/USD. If it comes out at 0.1 or lower, it is going to be bad for the dollar, and I would buy EUR/USD. As always, keep an eye on y/y and headline numbers. Sometimes when the core number is flat but headline gives a big deviation, you may see a nice move. Also, if you see conflicts, you may want to exit early although the core should be able to take over the headline number.

3. Wednesday, January 16th, 2008 (9:00 a.m. New York Time) USA
At 9:00 a.m. we will have U.S. TIC Index coming out. If it comes out at 20 or lower, I would sell USD/JPY. If it comes out at 120 or higher, I would buy the USD/JPY. This indicator can be traded only if there is a big surprise. If the trigger is hit, expect about 30 pips move.

4. Wednesday, January 16th, 2008 (9:15 a.m. New York Time) USA
Then at 9:15 a.m. we will have U.S. Industrial Production. This is not a big deal although sometimes you can scalp a few pips. Don't worry about this one too much.

5. Wednesday, January 16th, 2008 (4:45 p.m. New York Time) NEW ZEALAND
Then we will have New Zealand CPI quarterly release. It is expected to come out at 1%. With this indicator you can use 0.2 trigger. If it comes out at 1.2% or higher, it would be strong for the New Zealand dollar and you want to buy NZD/USD, looking for 40 to 50 pips or more in the first hour. If it comes out at 0.8% or lower, that would be weak for the New Zealand dollar and you may want to sell NZD/USD and expect 40 to 50 pips or more in the first hour of the report.

6. Wednesday, January 16th, 2008 (7:30 p.m. New York Time) AUSTRALIA
Then we will have Australian Employment Change. It is expected to come out at 20K. You can use 15K trigger on this report. If it comes out at 35K or higher, I would buy AUD/USD, looking for 30 pips or more. If it comes out at 5K or lower, I would sell AUD/USD, looking for 30 pips or more in the first hour of the report.

That's all for Wednesday.

Have a great day.

News Trading With Its Own Risks

Hello, How are you doing and I hope you are having a great day trading the forex today. I am sorry i could not post the signals here, I was really busy today and if you ask me, I did not go to the market although there were a couple of moves like the USDJPY move and the resultant move on the GBPUSD but I only got there to see it, I did not trade it.

I was just not gonna allow today to pass by without saying something to my dear readers. You know i was thinking, News Trading really does have its own risks. I have experienced what it feels like to place a trade, you know just before the news, you execute what we call straddles. Okay let me briefly talk about that.

Straddles is a system of trading the news where you place a pending order just before the news release. You put a buy stop at a price above current market price and a sell stop below current market price. The idea is that if news come out, whatever direction the market decides to go, your pending order will be executed and you will make a good money in it. You would have put your take profit as well so that you dont have to be worrying about closing the order. Now that explains straddles and it does sound so easy and cool. Yeah it is.

But the problem now is that most brokers have problem during the news and they kind of fill your order in at a wrong price and if market moves with a spike and it executes your order, but fails to move towards the direction for too long, reverses and you are in a loss already, what happens? You are gonna be closing at a loss. Now that is the risk involved and it could really be painful.

Did you ever watch someone do something on TV, and then they tell you “Don’t try this at home”. Same applies to news trading. Don’t try it at home, if you are new to it, and you don’t know what you are doing. Why? Since trading the news is so lucrative, don’t you think that a lot of traders are trying to do it? Yes, of course, that’s exactly why it’s so lucrative, because there is a lot of volume and price action, and at the same time, that’s exactly why it can be very dangerous. Imagine that it’s 4:29 am, and the price on GBP/USD is at 1.9605. At 4:30 am, we have UK Retail Sales scheduled that are expected to read 0.5%. Imagine, the retail sales read 1.0%, and you feel that it’s good for the pound, so you click on the button to buy GBP/USD at 1.9605, except instead of filling you at 1.9605, your broker slips you and fills you at 1.9645. You got filled at the very top of the spike, you see price retracing now, you get scared, and exit with a loss, and you wonder what happened. Well, what happened is what happens with almost every important news announcement. There is a big spike that happens in the first 5 to 15 seconds, because so many people are trying to go in the same direction. Then traders realize that the market over-reacted, so they close their positions, and the market makes a retracement. Then as it retraces, the price becomes more attractive, so the people either again go long at better prices, or they allow the market to fully retrace and go into the opposite direction. Continuation of the move depends on the timing of the specific report, its importance, and the deviation from expectations and/or revision of previous number. Important price levels, many times known as support and resistance also play a very important role.

So you ask me what do you do in theses cases. What i will say is that, this depends mostly on your broker. If your broker is not a very good one, most of the times those who offer tight spreads, they dont know how to handle slippages and you will really cry for it, but if you deal with brokers who dont really shout about tight spreads and dealing desks, then you might be safer.

I will offer two ways i think you can handle this.

1. Trade straddles with stop losses. How? Now you will place a pending order, with a take profit above and a stop loss just about 10 pips below. This way, if the order goes the negative way against you, at least you will be stopped out from incurring large losses.

2. Follow the market direction. During important releases, you just open your order page and get ready to follow after the market direction. Although most of the times, you would have missed part of the move but at least you are safer and you can still make something out of it. This is completely manual as opposed to straddles which is completely automated.

These are the two ways i think one can minimize the risks involved in news trading. Now these are what i feel you can add yours to it.

I wanna wish you a success in your trades. Happy trading.

Have a great day.

News Trading Signal for Today, 11th January 2007

Hello Good morning, how are you doing today. How were your trades yesterday, I hope you were able to catch some pips.
Okay, to the business of today but before then, let's first review what happened yesterday.

The UK Trade Balance barely deviated so we had a no trade. As simple as that.

Then the UK kept the rates unchanged at 5.50% as expected by most economists. I said it could give some strengthening to the British pound but it would not be reliable. What happened was there was a 60 pips spike up; however, it last only for 15 minutes before starting retracing and making new lows. You could have made some pips out of it but I think it would be unnecessary risk to take. Nevertheless, if you made money anyway, congratulations.

The Euro Zone also left the rates unchanged so another no trade here.

At 8:30 Trichet did not say anything surprising so it was a yawn speech and also a no trade.

The Initial Jobless Claims was at least quite interesting. The consensus was modified down from 345 K to 340 K. Once I saw that, I corrected it on the daily signals and provided new triggers. If you traded old triggers, it would be a loss; if you used a new set of triggers like we did in Diamonds room, it would be a no trade. We had 12 pips price action up, and then it started going the other way. I hope you either adjusted your trigger or at least had an appropriate stop loss. A good lesson that you might learnt from it is to make sure the consensus did not change right before the report as this text is usually written and send hours or sometimes even days before the report.

The Building Permits in Canada was also very interesting. It came in very negative: -9.9%, completely erasing the surprising gain that happened last month. We were looking to sell at -6.7% or lower. The price moved very quickly so frankly speaking when trading myself I missed a good entry here although it was still possible to make decent pips. To make the long story short, overall it moved 50 pips within 1 hour.

At 1 p.m. Bernanke was scheduled to testify. His comments were leaked at 12:16 p.m. In the first minute or so it moved 8 pips as it was unexpected but as people starting realizing what happened, EUR/USD moved up from 4740 to 4810 so about 70 pips move in the 45 minutes leading up to the report. If you had a news provider and you were aware of this, and in fact you made a trade, good for you. If you, however, showed up at 1 p.m. and looked at comments, you already missed the boat.

Let's now talk about Friday.

At 4:30 a.m. we will have U.K. Industrial Production. It is expected to come out at 0.1%. I recommend trading a 0.4 trigger although a 0.3 deviation sometimes work OK. If there is a 0.4 deviation either way, you can expect 40 pips price action on GBP/USD. So, if it comes out at 0.5% or higher, I would buy GBP/USD or GBP/JPY. On the other hand, if it comes out at -0.3% or more negative, I would sell GBP/USD or GBP/JPY or even GBP/CHF.

At 7 a.m. we will have Canadian Employment Change coming out. This is one of the strongest and most powerful indicators of the month. It is expected to come out at 15 K. If there is a 15 K deviation, I think it is worthy to trade. So, if it comes out at 0 K or negative, I would buy USD/CAD. If it comes out at 30 K or higher, you want to sell USD/CAD. The amount of price action solely depends how big the deviation is. If it is just 15K deviation, I would expect about 45 pips price action on USD/CAD. If it is 30 K or more, you can expect 70 or 100 pips on USD/CAD. What I noticed is over past 15 months we saw a lot of very positive deviations on CAD employment change so you may want to sell a small unit of USD/CAD right before the report and set up an appropriate SL in case it comes out the other way.

We also have U.S. and Canadian Trade Balance and U.S. Import Price Index at 8:30 a.m. I would focus on the Canadian Trade Balance. Of course, what happen on Canadian Employment Change may influence this trade but anyway I think 1.0 trigger is sufficient to trade the Canadian Trade Balance. If it comes out at 4.2B or higher, you may want to sell USD/CAD. If it comes out at 3.2 B or lower, you may want to buy USD/CAD. I would look at 30 pips price action on that report. The U.S. Trade Balance and Import Price Index are not big movers. If anything, they may either help a little or if they conflict, they will give you a good price to get in Canadian Trade Balance.

That would be all for Today.

Have a great day.

News Trading Signals for Today, 10th January, 2007.

Hello good morning today, I hope you enjoyed your day off yesterday and thats if you really took the day off. Well i had a great day. Meanwhile,Let's first review what happened yesterday.

The U.S. Pending Home Sales came out too close to expectations so it was a no trade.

Australian Retail Sales deviated by 0.3 and unfortunately we missed our trigger of 0.4. There was a decent price action but it did not hit our trigger so it was a no trade.

We also had no trades on Wednesday.

Let's now talk about Thursday.

1. Thursday, January 10th, 2008 (4:30 a.m. New York Time,10:30 a.m Nigerian Time) UK
Tomorrow we will have the UK Trade Balance coming out at 4:30 a.m. This indicator used to perform quite well but last 3 times it failed with 700 M or even 900 M trigger as the price action went the other way. If you want to trade this, use 1000 M (1 B) deviation. Therefore, if it comes out at -8200 M or more negative, that would be weakening the pound and I would look to sell GBP/USD and expect 30 pips move price action to the downside on the GBP/USD. On the other hand, if it comes out at -6200 M or less negative, then it would be positive for the U.S. pound and I would expect to see 30 to 40 pips move price action to the upside on the GBP/USD.

2. Thursday, January 10th, 2008 (7:00 a.m. New York Time, 1:00 p.m Nigerian Time) UK
At 7 a.m. we will have UK Interest Statement coming out. It is expected they will hold the rate at 5.5% because they just cut rates recently. There is also 20% to 25% economists expecting them to cut the rate. Here is what I am going to do: if they keep the rates unchanged, I would probably stay away although it can be strengthening the pound a little bit. If they cut the rates, I would sell GBP/USD or GBP/JPY and expect 50 pips or more and 100 pips or more in the first hour, respectively.

3. Thursday, January 10th, 2008 (7:45 a.m. New York Time,1:45 a.m Nigerian Time) EURO ZONE
Then at 7:45 a.m. we will have Euro Zone Interest Rate Statement. It is unanimously expected they will hold the rates at 4.00%. If they hike the rates to 4.25%, you can buy EUR/USD and expect 50 pips or more price action in the first hour. If they cut the rates to 3.75% I would sell EUR/USD and expect 50 to 100 pips or more move to the downside.

4a. Thursday, January 10th, 2008 (8:30 a.m. New York Time,2:30 p.m Nigerian Time) EURO ZONE
At 8:30 a.m. we will have a few things coming out at the same time. We will have Trichet speaking but if you want to trade what he is speaking, you need to be a little bit more advanced trader and be able to listen to his tone. If he uses the "strong vigilance" phrase it is usually very bullish and you want to buy EUR/USD. Selling EUR/USD is a bit more problematic and you really need to be more advanced trader to trade his speeches.

4b. Thursday, January 10th, 2008 (8:30 a.m. New York Time,2:30 p.m Nigerian Time) CANADA
At 8:30 a.m. we will have Canadian Building Permits. It is expected to come out at -1.7%. Recently, building indicators out of several major countries started moving the market so we can try to trade this indicator with 5.0 trigger. Therefore, if it comes out at -6.7% or more negative, I would buy USD/CAD and expect 30 pips pips price action. If it comes out at 3.3% or higher, I would sell USD/CAD, and expect 30 pips price action. Last two months this indicator worked very well so it is time to start focusing on it.

4c. Thursday, January 10th, 2008 (8:30 a.m. New York Time, 2:30 p.m Nigerian Time) USA
At 8:30 a.m. we also have U.S. Unemployment Claims. It is expected to come out at 345 K. Usually, a 20K trigger is sufficient to trade and you can expect 25 pips price action on USD/JPY if the trigger is hit. Therefore, if it comes out at 365 K or higher, it would be bad for the U.S. dollar so I would sell USD/JPY. If it comes out at 325 K or lower, it would be good for the U.S. dollar and I would buy USD/JPY.

5. Thursday, January 10th, 2008 (8:30 a.m. New York Time, 2:30 p.m Nigerian Time) USA
At 1 p.m. we will have Bernanke speech. This also is for more advanced traders so if you are new in trading fundamentals, I would stay away. Keep an eye on some possible interesting price actions at 1 p.m.

I guess thats would be all for Thursday.

Do have a great day.

DAY OFF

Hello,
There are will be no news worthy of trading today so we can take the day off and do some other things that are of value to us.
Have a great day.