Trade for Monday December 6, 2010
Trade for Monday December 6, 2010
10:30 PM EST
AUD Cash Rate - Interest rate for overnight money market deposits
AUD/USD
This can be a really good trade when the economists differ on whether they think the rates will move or not. This month, the economists are in agreement that rates will not change. I will use a safe trigger on the Oracle Trader of .25, and will trade full lots. In the unlikely event rates change, we should see a minimum of 70 pips on the spike with good continued follow through. I will trade the Straddle also, setting buypips and sellpips to 8 (in order to reduce the likelihood of getting taken on the pre-news jitters) and a maxspread of 6 on the AUDUSD.
Trades for week of December 5 – 10
Trades for week of December 5 – 10
I will do a brief recap of last weeks trades, since it was such an interesting week, and list all the trades I will do this coming week.
Last week, the best trades were the AUD GDP q/q and AUD Retail Sales, and also the US Non-farm payroll. The AUD GDP hit our OT triggers on row 2 and also took in the Straddle. We did very well on both. The AUD Retail Sales hit the row 1 trigger and also had a huge spike. Both OT and Straddle also did well on that one. With the US NFP, I was trading the USDJPY on the Straddle and the spread grew to 8, but my maxspread was 5 so I didn’t get in there. Did get in on the OT on row 2 and did well there. Some friends that were trading the EURJPY got in on the Straddle, because the spread evidently didn’t change on that one, and did extremely well.
On the down side, I got taken in on the GBP Services PMI which went just far enough to take in one of the Straddle orders on the pre-news noise. Lost a few pips on this one, plus got up at 4 in the morning to do it so it was particularly painful. Also had bad luck with the CAD Employment trade, which is normally one of the best. Row 2 came out with a huge deviation but didn’t seem to have much impact at all. Plus one of my Straddle orders got in on this mess. I took losses of a few pips on those 2 trades.
All in all, it was a very profitable week for me. I made much more on the AUD trades and the NFP than I lost on the others. That is the object of what we do, minimize losses (which you will always have) and maximize profits.
This coming week I will trade the following trades. I will label Trade Room trades with LOTN (Live On The News).
12/6 10:30 PM EST – AUD Cash Rate
12/7 4:30 AM EST – GBP Industrial Production (LOTN)
12/7 9:00 AM EST – CAD Overnight Rate
12/8 3:00 PM EST – NZD Official Cash Rate
12/8 7:30 PM EST – AUD Employment
12/9 7:00 AM EST – GBP Official Bank Rate
12/9 8:30 AM EST – US Unemployment Claims
12/10 8:30 AM EST – CAD Trade Balance (LOTN)
12/10 8:30 AM EST – US Trade Balance (LOTN)
That’s it. Not a ton of opportunity this week so we will be careful. The interest rate trades, of which there are 4 this week (called Overnight Rate, Cash Rate, Bank Rate, etc.), can move the market 100 pips or more when they hit, but they rarely hit. Remember, we do roughly the same trades every month so having a week with not so many big ticket trades is not an issue, since there are the same number of potentially good ones every month. And sometimes we do well on ones that don’t typically have big moves. Check out my daily posts to get the details of the trades coming up the next day and how you should trade them.