This is especially long however we have a major release comming out tomorrow and I wanted to make sure you were completely informed in what may unfold tomorrow. The Non Farm is not to be feard however it is to be respected as it can be very volitile.
OUR LAST LIVE ON THE NEWS TRADE CALL
Today we had 2 reports we were watching the first of which Did not hit our triggers so there is not much to discuss there However the 2nd report did hit our triggers and went right to Our primary target once again. Unfortunately there was some conflicting data so I called a close rather quickly to try and conserve any profits.
As I said the release did go to our target however in my opinion It would have been reckless on my part to hold positions open with data that was conflicting as much as this was. Today was a toss up in the room in regards to profit and loss. There were many that got requites and due to the conflicting data didn’t accept them and there were some that got entered but got bad fills.
On one platform I got in at 1.9720 which was a terrible entry and On the other platform I got a requote. I looked at the log file and the initial attempt was at 1.9700 and I didn’t accept the requote. Which was well above that. Unfortunately I only made a few pips but it could have been worse
In my opinion this was a successful trade overall. Those that got decent entries made profits and those that got bad entries were able to get out quickly due to the RSS notifying us of the conflicting data so losses were limited and many of those with bad entries actually were able to close out at break even or with a couple pips some with profits.. To see the video of this trade follow this link.
OUR NEXT LIVE ON THE NEWS TRADE CALL
Tomorrow we have the US Non Farm Payrolls which can create huge moves in the Market. It seems as if everyone loves to trade this release and I completely understand the attraction as you can make a lot of money very quickly.
Please keep in mind that this release can also take your money very quickly if you make a mistake. The bottom line is you need to respect this release and understand what can happen. If our triggers are hit the market will go in the direction we anticipate but the non farm is notorious for revisions.
Revisions can completely reverse the market. I mean stop it in its tracks. A revision takes place when the annalists realize that they made a mistake last month when they released the number and they post the corrected or ‘Revised’ data generally at the same time or within seconds of this months data.
With all that said, please do not get carried away when trading this release. I suggest trading smaller lot sizes to help manage risk. To help you in making a decision on lot size I will make illustrate a possible scenario. I will use a 10k account for this example. Lets say that you are willing to risk $600 on any one trade and generally speaking the possible loss would represent around 30 pips.
Take that same scenario only use the possible drawdown of 100 pips. The idea is to maintain the same risk level so you would still only want to lose around $600. So divide 100 pips into $600 dollars and you will come up with the lot size you will need to trade which is 6 mini lots.
This is a far more acceptable risk level than trading the same lot size that you normally trade. I am not in any way suggesting you use either of the strategies above I am just giving you some ideas to throw around.
Enough with all that, lets get to the release. The Non Farm data is expected to come out at 150k. Historically speaking if we use a trigger of 50k and our trigger is met we will still have time to exit if there is a revision. If we go much below the 50k level and a revision comes out than we will be hard pressed to get out in time.
If our trigger is met and there are no revisions it will be a thing of beauty as you will see the GBP move 80+ pips in seconds. A higher than expected number will signal a short on the GBP/USD and a lower than expected number will signal a long. Again if there is a revision over 17k that conflicts with the actual release I will close immediately. If it is under that I will watch closely and react based off of the market movement. This data will be released at 8:30am eastern.
I am hoping for a really good trade and again if our triggers are hit expect to walk away with hansom profits. I don’t mean to scare you this is a great release its just important that you understand what the possibilities are. Its not probable that we will get a significant revision as historically we haven’t had many that would keep you from exiting the trade in time but as traders we have to deal in possibilities not probabilities.
Good Luck trading!!!
