Last Updated on Wednesday, 3 August 2011 04:38
Written by Barry Battista
Wednesday, August 3rd, 2011
Hhmmm … what’s he doing publishing Friday releases on Wednesday? Must be delirious from staring at the blog posts all day and night.
Not the case! (entirely). Perhaps you have seen the next paragraph recently somewhere.
I am headed out of town very early Thursday morning and won’t be back till very late Monday night. If you have issues, contact Support at support@ForexTradersDaily.com. I will have visibility into the blog and Email but will not likely be responding to stuff so please do not post there. It is hard to imagine a question that has not already been answered in there somewhere. You can also ask Support to add you to the Skype room, where tons of questions get answered by some very savvy traders.
This will be an interesting day, particularly at 8:30. The EUR/JPY and the majors are likely to be more lively than we have ever seen when the NFP is released due to the anxiety in the US regarding our rather pathetic state of economic affairs. This could result in some huge profits for some traders and some huge losses for others.
Here we go…..
7:00 AM Eastern
CAD Employment Change – Change in the number of employed people during the previous month.
USD/CAD
This has turned from our best trade to one of dubious merit. In May we had a deviation of 38.3 and -.1 (2 rows of data) with an anemic 26 pip spike. It retraced immediately. Six months ago this would have caused a 50 pip spike at least. Anyway, this became an exercise in trying to get out at breakeven. In June it came out at 2.3 and -.2 with an 18 pip spike and continued push down for a total of 35 pips after 5 minutes. This was a large move for a very small deviation. Maybe this has started performing better! Nope. In July we had a fair deviation of 13.4 and 0 with a 15 pip spike that immediately reversed past where it started.
So lets see … low deviations have decent moves and huge ones have crummy moves. This makes forecasting tough, but given the recent behavior I would be ultra conservative on this mess. This is what I would do:
ORACLE TRADER: Set medium to 25 and safe to 35. Trade 1/4 your normal lots on a medium and 1/2 on a safe (never thought I’d see this kind of recommendation for this trade in my lifetime). I would get out as soon as the spike is over no matter what the deviation is.
STRADDLE V1.3 – Set maxSpread to 12. If you were taken in in both directions on any of the July trades, set your buyPips/sellPips to 8, otherwise leave them at 6. I would get out relatively fast after the spike.
STRADDLE PRO – Set Buy and Sell Trigger to 20 and check the box at the end of row 1. If you were taken in in both directions on any of the July trades, set your buyPips/sellPips to 8, otherwise leave them at 6. If you have the trailing stop available, set it to 3 pips and 100% of your trade. Remember this will only kick in if the live trade gets positive by 5 pips and the stop gets set to zero. Get out fast if you go live.
8:30 AM Eastern
USD Non-Farm Payroll – Change in the number of employed people during the previous month, excluding farming (most of whom nobody knows about anyway)
EUR/JPY
Well, lets see … in May we had a deviation of 59 and .2 with a spike of 55 pips and continuation to 100 pips in 4 minutes. In June we had a deviation of -111 and .2 with a spike of 60 pips and continuation to 80 in 5 minutes. In July it had a deviation of -87 and .1 with a spike of 100 pips, continuation to 130 in 5 minutes, and retracement of 70 over the next hour.
This is what I hate about this release. When you look at this, it looks like the best trade there could possibly ever be and everyone will want to over trade it. But I have seen this thing rip accounts wide open in the past, and it always happens once we have been lulled to sleep by a recent spate of good moves. Do not expect to get good fills, if you get filled at all, because liquidity get dry as a bone before this thing. For what it is worth, I made a cumulative total of $9 on the 100 pip spike last month across all my accounts.
Watch the revision number. If it comes out against us, attempt to click out even faster. If your finger is anything but a blur, you are not clicking fast enough, though it is unlikely your broker will let you out anyway. Up till recently, I advised against Straddle traders trading this, but a lot of people did real well on it in the spring and early summer so I had a change of heart. I hope said heart doesn’t wind up on a pike in the front yard. I am expecting even more insanity on Friday.
Here’s the deal:
ORACLE TRADER: Try a medium of 65 and a safe of 80, but trade only 1/4 your normal lots on a medium and 1/2 on a safe. If the revision comes out bigger than 50 or so, you might want to try to get out. Good luck.
STRADDLE V1.3 – set maxSpread to 18 and buyPips/sellPips to 15 also. Trade light.
STRADDLE PRO – Lets try putting 30 in the Buy and Sell Trigger, though the odds this number will matter are extremely slim. Check the box at the end of row 1. Set acceptableSpread to 10, maxSpread to 18, and pctReductionPerPip to 10. Set buyPips/sellPips to 15. Set stopLoss to at least 20.0 (not less). Trade light.
