Written by Barry Battista
Wednesday, June 29th, 2011
I am going to be real busy tomorrow so I decided to post the Friday trades today. Read the first one very carefully. I will do my best to explain it as clearly as I can. Remember, these are trades for Friday, not tomorrow (Thursday).
4:28 AM EST
GBP Manufacturing PMI – Level of diffusion index based on purchasing managers in the manufacturing sector.
GBP/USD
This data is released to only one data provider at 4:28 AM EST and to the rest of the data providers at sometime in the next minute or so. The Oracle Trader data provider does NOT get it at 4:28, so you cannot trade this release with the Oracle Trader. But it is a great Straddle trade. Ideally here is what will happen. Your 2 orders will go in as pending just before 4:28. Inexplicably at 4:28 AM EST there will be a nice spike of 15 or 20 pips at minimum on the GBP/USD and one of your orders will go live, become profitable instantly, and the other pending order will disappear. Then you wait to see the data come out on the STPro. In 30 seconds to 2 minutes time data will show up there. If your live order goes back to zero pips profit before this time, just close it. Don’t let it go back against you. If it doesn’t, look at the data that shows up on the STPro. If it is over 2.0, you might want to hold all or part of your trade for a couple minutes, otherwise close the live trade immediately and take your profit. Normally if we see a 2.0 or higher, there will be an additional push in your direction as soon as it shows up.
I would trade “full lots” (this means the most you are comfortable with and could at this time still be very low) on the Straddle. If you are new, trade sparingly. I am not always right on my lot suggestions but we are playing the odds here and the odds are very good on this trade. If there is anything you don’t understand about it or are unsure of, also trade sparingly.
Here is the setup.
STRADDLE v1.3 – set your maxSpread to maybe 12 on the GBP/USD. If there is no spike by 04:28:04 (4 seconds after the news is due out), Remove the Straddle to get rid of the 2 pending orders. If there is, and you are up 15 or more pips, wait a couple minutes before closing your order. If you are up less than 15 pips, close immediately.
STRADDLE PRO – Start the STPro and put a trigger of 2 in the Sell Trigger and Buy Trigger fields on row 1. Do NOT put a check mark at the end of the row. You can leave all the parameters at the default values except volume, timer, and another one called timeToLive. Set timeToLive to 6. This will cause your 2 pending orders to disappear at 4 or 5 seconds after 04:28 AM if neither one has gone live.
10:00 AM EST
US ISM Manufacturing PMI – Level of diffusion index based on purchasing managers in the manufacturing sector.
EUR/JPY
This is the US version of the earlier trade, but is not nearly as good or likely to hit. It comes out on time and all data providers get the data at the same time. Looking back, it was September 2010 the last time we had any significant movement out of this. There were some hard retracements sprinkled in there. I will be at the gym at the time, opting for a workout vs participating in this. Here is what I would do if I were trading it:
ORACLE TRADER – use 3.5 medium and 4.5 safe, trading 1/4 your normal lots on the medium and 1/2 on a safe. I would suggest you heckle Dave in the Trade Room while this is going on, but he doesn’t do the Trade Room that often and might be permanently damaged so go easy.
STRADDLE V1.3 – don’t trade this.
STRADDLE PRO – don’t trade this.
