Written by Barry Battista
Tuesday, November 9th, 2010
There are 3 trades for Wednesday. Two are not very good and one is good albeit a bit risky.
8:30 AM EST
US Trade Balance – Difference in value between imports and exports.
USD/CHF or EUR/JPY
Well let’s see. In August this came out at -7.8 and spiked 0 pips. Hhmmm. In September it came out at 4.2 and spiked 14 pips, where it stayed for 7 minutes. In October it came out at -2.3 with 0 pips spike. If you really insist on trading it, I would set Oracle Trader triggers to 9 medium and 12 safe, and trade VERY LOW lots. I would go with the USD/CHF because we have been seeing some exaggerated moves on that pair over the last couple months. Definitely do NOT do the Straddle on this. The Unemployment claims are coming out at the same time. This is a weekly release that usually comes out on Thursday, but since Thursday is a bank holiday, they moved it up a day. It is unlikely to provide any help to the Trade Balance trade, and will cause it additional problems if it comes out in opposition. Back in the day this was a good trade but that day has long gone.
8:30 AM EST
CAD Trade Balance -Difference in value between imports and exports.
EUR/CAD
August: -.8 with 0 pips spike but a slow push up. September: -1.88 with a 10 pip spike in the wrong direction, followed by a slow turnaround and 20 pip move the right way after 10 minutes or so. October: .95 with a 0 pip spike. Need I say more? And to make matters worse, you need to trade the EUR/CAD rather than the USD/CAD, which usually has a 9 or 10 pip spread during quiet times. If you must do this, use OT triggers of 2 medium and 2.5 safe, trade low lots, and be quick to click out if your spread balloons up above 10. Do NOT try the Straddle on this one either.
7:30 PM EST
AUD – Employment Change – Change in the number of people employed for the previous month
AUD/USD
This is a much bigger mover but there are risks involved. As long as you are aware of them, you should do fine. This trade has 2 rows that can move the market. We will trade them both but watch out because the rows sometimes come out at the same time, and sometimes there is a full second or 2 between them. My triggers are 15 medium and 20 safe on row 1, and .2 medium and .3 safe on row 2.
In August this came out at 3.5 on row 1 and .2 on row 2. Row 1 came out first as a buy (way below my medium trigger) and spiked up 10 pips. Then row 2 came out at .2 sell. This hit the medium trigger, spiked down 23 pips, and slowly pushed down 50 pips over a minute or 2. Then a revision of 19.4 came out on row 1 as a buy. We bailed immediately and it retraced all the way back. Whew.
In September it came out at 5.9 and -.1. This did not meet our triggers and we exited the Straddle before row 2 came out (It was a couple seconds late). Upon row coming out, it spiked up 17 pips and pushed even higher despite bumping up against a weekly high before the trade.
In October it came out at 29.5 and 0. The spike was 40 pips. We did well on OT and Straddle This was a great deviation.
So, for this trade I would use 15 medium and 20 safe for row 1, and .2 medium and .3 safe for row 2 on the Oracle Trader, and set the maxspread to 7 on the Straddle. Trade your normal number of lots for a good trade. Just be careful of late data on one of the rows and also watch for revisions to come trickling in over the first minute or so. If you are in and the revision is against you, get out. If it is in your direction, you should get continued followthrough. If everything comes out in the same direction, the AUD tends to push for awhile so you can have some patience.
