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Forex News Trading: Trades for Friday, June 1, 2012
Forex News Trading: Trades for Friday, June 1, 2012
There are two trades tomorrow worthy of consideration, but before we consider them, we should be aware of the big picture. Due largely to the continuing mess in Europe, both the GBP/USD and EUR/JPY (the pairs we will be trading tomorrow) have been on huge downward pushes.
There are lots of factors that play into trade decisions when the markets are in this condition, but a good rule of thumb is to trade only in the direction of the trend. The Straddle has a feature called sellOnly. Simply find sellOnly and set it to y. This will cause it to only enter a pending sell order. I fear if these come out as buys, we will see a spike up but hard spike back down due to all the sell orders that are evidently piled up above the current prices. If you are an Oracle Trader trader, just point the Buy click onto the desktop somewhere but point the Sell click to the Sell on your tick chart.
It’s possible we could get a buy on one of these and there could be a big spike up, but I’d rather advise you to do a sell only and take the requisite verbal abuse for having advised wrongly than to have us all in on a buy that whipsaws and takes us all to the cleaners. Plus the odds of a buy for the NFP seem extremely small to me.
4:28 AM EDT
UK Manufacturing PMI – Level of diffusion index based on purchasing managers in the manufacturing industry.
GBP/USD
This has been a poor mover this year. Early in the year we saw some good deviations (> 2) but very little movement. More recently the deviations have all been low so we don’t know how it will perform. But I’d say that because of the precipitous fall the GBP/USD has taken lately, this is not likely to be a good mover. If you chose to pass on it, that would not be a bad idea. But I will give it a try, trading lightly of course.
The GBP/USD is starting to bump into a historical strong point of support around 1.5340 to 1.5300. It would be nice if it is well below, or well above, that range in the morning.
ORACLE TRADER – Can’t do this one
STRADDLE V1.3 – set maxSpread to 6. If you have a sellOnly option (I don’t remember if v1.3 has this or not), set it to y. In any case, get out right after the spike if there is one and get your pending orders out within a couple seconds after the trade time if there isn’t a spike.
STRADDLE PRO – you can set Buy/Sell Triggers to 2.5 but do not check the box since there will be no data visible for awhile after the trade time. Set timeToLive to 3. Set sellOnly to y. Use trade management.
8:30 AM EDT
US Non-Farm Employment Change – Change in the number of employed people in the last month, excluding the farming industry.
EUR/JPY
Well, the EUR/JPY is the lowest it’s been since 2000.
NOTE – It looks like the CAD GDP will be on row 1, the US NFP on row 2, the US Unemployment rate on row 3, and the CAD GDP Annualized on row 4. SO NFP WILL BE ROWS 2 AND 3. But double check this before the trade!
In March we saw a small deviation of 17 and 0 with a 20 pip spike and slow follow through to 35 in 2 minutes. In April we saw -85 and -.1 (row 2 was in opposition to row 1), with a 65 pip spike, 25% retracement, and continuation to 100 pips in 12 minutes. In May we saw -45 and -.1 (row 2 was in opposition to row 1 again), with a 30 pip spike. Problem was it spiked down 20 pips at 20 seconds before the trade time. This is a clear indication to turn off your stations as we have talked about numerous times. Watch out for this again! Don’t be caught off guard.
One other note, which hopefully won’t confuse this mess any worse than it is. IF you are doing a sellOnly, and there is a pre-mature spike in the buy direction, I wouldn’t worry about it. Only turn off your stations if the pre-mature spike is in the sell direction IF YOU ARE DOING sellOnly.
ORACLE TRADER – Remember this is on row 2. Set medium to 60 and safe to 85, doing effectively a sell only and trading 1/2 your normal lots on a medium and 3/4 on a safe. You can also do a sell only by setting both your buy triggers to say 2000.
STRADDLE V1.3 – set maxSpread to 8. If you have a sellOnly option, use it.
STRADDLE PRO – Remember NFP is rows 2 and 3 (double check this before the trade). Set Buy/Sell Triggers to 15 and check the Row 2 box. In the EA, set sellOnly to y, syncSTPRow1| to n, syncSTPRow2| to y, and use trade management. Also if you are doing a sellOnly and your broker is reasonably responsive, you might be able to get away with lowering preNewsSec to 2 (since it is only entering 1 trade it takes less time).
This should be interesting……..
8:30 AM EDT
CAD GDP m/m – Change in the value of all goods and services produced by the economy.
There is no safe pair to trade.
The problem with this trade is that the US NFP affects every pair there is. If you don’t believe me, if we have a decent deviation and spike, open ANY PAIR your broker offers and look at it. You will see substantial movement in it in the direction the NFP pushed it regardless of the currencies involved.
Do not trade this, even if you aren’t going to trade NFP. It will be too risky.
Forex News Trading: Trade for Thursday, May 31, 2012
Forex News Trading: Trade for Thursday, May 31, 2012
8:30 AM EDT
US Prelim GDP q/q – Annualized change in the value of goods and services produced by the economy.
EUR/JPY
Well, this is the middle in influence of the 3 GDP trades. Unfortunately none of them have much influence on the still-ailing US economy. In fact, with this one it is not entirely clear whether it will spike in the normal way, or do the opposite of what would be expected. All the more reason to either pass on it or trade very low lot sizes.
We haven’t seen any movement in it for so long that triggers will be tough to ascertain. The last 3 occurrences, dating back to last August, came out with a maximum deviation of .4 but little or no movement in any of the releases. Oh, and if that were not enough, we also have the Unemployment Claims release coming out at the same time.
ORACLE TRADER – I’d try maybe 1 and 1.2, trading 1/5 the normal lots with a medium, and no more than 1/2 with a safe.
STRADDLE V1.3 – try a maxSpread of 6. If there is not a spike right away, get out.
STRADDLE PRO – hhmmm… try .6 for a Buy/Sell Trigger and check the box. Consider it a win if you don’t wind up making a small contribution to your broker. Watch out for all the other data.
Forex News Trading: Trade for Tuesday, May 29, 2012
Forex News Trading: Trade for Tuesday, May 29, 2012
I have done a lot of work to the website over the weekend. Moved it from GoDaddy format to WordPress. Tried a bunch of fancy Themes with all kinds of pictures and logos, but have come full circle to deciding that that stuff is nothing but a distraction to the underlying message, which is why people will use the site. So it is again a site I hope is easy to read and navigate. No fancy pictures or other distractions. Just content.
I am now investigating how to put the individual trade data up there in a page everyone can look at themselves. The goal is to get a graph visible for every trade along with the notes I took about its behavior. Some of this info is available on other sites now but I would rather everything you need to make informed trade decisions be on one site in one place. Takes less time this way and gets you exactly what you need with no fluff or filler.
I will still do the posts but you will have the ability to see exactly what I am looking at to make decisions. Many of you are quite savvy traders and might see things a bit differently than I do, adjusting parameters accordingly. This is a really good thing, as the last thing we want to do is have all of us going in with exactly the same settings.
My friend Larry, who did a couple of the videos, will be putting up another video this week and we also have a PDF document that I will put up somewhere on the site. It is a document on how to set everything up and what all the parameters mean.
On with the trade….
9:30 PM EDT
AUD Retail Sales – Change in the total value of sales at the retail level.
AUD/USD
In February and March this came out at 0, and the EA took us out both times. There was little to no movement. In April we saw a deviation of .7 and 1.4 with a 23 pip spike, gradual full retracement, then continuation back up. Problem was, it was Sunday night and the trend had been down since the market open a few hours earlier. I was up OK on this trade but, uncharacteristically, I let it ride, and it came all the way back and I wound up pocketing a total of $6. A grand way to start off the week.
Retail Sales trades in general seem to carry a reasonable amount of clout as a measure of economic strength, particularly in economies deemed to be in recovery. That is the case for Australia. So I will be trading this with moderate leverage, heavier than the last time this came out on a Sunday night but lighter than I would say the AUD Employment trade.
ORACLE TRADER – set medium to .5 and safe to .7. Trade 1/2 your normal lots on a medium and 3/4 on a safe.
STRADDLE V1.3 – set maxSpread to 7. Might want to set buy/sellPips to 7 or 8.
STRADDLE PRO – set Buy/Sell Triggers to .3 and check the row 1 box. I will be leaving tradeDelaySec at 0. You could set it to 1 for a tiny element of added safely but you might get taken out of the trade early when you would rather not have been. Make sure your system clock is perfectly in sync with an atomic clock (I have a video on the site that discusses how I do this). Also might want to bump up buy/sellPips to 7 or 8. If we see a big deviation, maybe .8 or higher on row 1 and agreement in direction on row 2, you might want to close part of the trade and leave the other part to see if we get continued follow through.
