Written by Barry Battista
Monday, August 22nd, 2011
8:30 AM Eastern
CAD Core Retail Sales m/m – Change in the total value of sales at the retail level, excluding autos.
USD/CAD
If we see a large enough deviation in this thing, we can see a decent move but the necessary deviation is not frequently seen. In May we saw -.8 and -.9 (2 rows of data) with a 25 pip spike, small retracement, and continued push to 37 pips in 5 minutes. In June we saw -.6 and -.1 with an 11 pip spike and no follow through. In July we saw .2 and .4 with a 17 pip spike and quick retracement.
Deviations tend to be smaller at this time of the year so Straddle traders should account for that in their lot sizes. Frankly, this is a very risky trade for Straddlers and if you decided to pass on it, you would likely be glad you did. In any case, I would close at least 1/2 the trade after the initial spike. If the deviation is 1 or more, you might hold for a couple minutes to see if there is any additional follow through. If not, close out and move on.
ORACLE TRADER – set medium to .7 and safe to 1. Trade 1/4 your normal lots on a medium and 1/2 on a safe.
STRADDLE V1.3 – for those that choose to try this, set maxSpread to 12 and trade very low lots. The odds are less than 50/50 that you will come out ahead. If you wind up with a couple cups of Starbucks coffee size profit, take a friend to Starbucks and do some braggin…
STRADDLE PRO – set Buy and Sell Triggers to .7, check the box at the end of row 1, and if you have the trailing stop available, you might want to set it to 3 pips closing out at least 50% of your trade. I can’t wait for everyone to have the same version of this again. See V1.3 for trade size and post trade behavior ideas.
