Forex Signal (Friday August 19, 2011 NY TIME 7:00am EDT) CA Core CPI m/m

[Stavro D'Amore]

Hello members,

Today we have the following:

CA Core CPI m/m
Forecast 0.2%
Previous -0.6%
Pair to trade: EUR/CAD

Numbers we need: BUY EUR/CAD 0.0% and SELL EUR/CAD 0.4%

Economical Impact: Critical
Typical Result: Good for currency
Occurrence: monthly, about 20 days after the month ends


About our Triggers:
CA Core CPI m/m is forecasted to arrive at 0.2%. We are looking for a deviation of 0.2% on this trade. If we get 0.0% or lower I will look to enter a LONG position on EUR/CAD and if we get 0.4% or greater I will go SHORT on EUR/CAD. Should this report be triggered, we can expect to see about 50pips on the initial spike. We also have CPI m/m due to come out the same time and I cannot see this being a conflict.
NOTE: we are trading Core CPI.


What is it?
The Core Consumer Price Index (CPI) measures the changes in the price of goods and services excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation in Canada.

Why does the market care?
Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. The common way to fight inflation is raising rates, which may attract foreign investment.

A higher than expected reading should be taken as positive/bullish for the CAD.
A lower than expected reading should be taken as negative/bearish for the CAD.

Method I use to trade this:
Stavro D’Amore Part1 Trading Method
I will look for a 30-50% retracement in the original spike before entering a trade; I will sell half my position as soon as I hit the original high point of the first initial spike and place a SL at entry price. My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame.

I do recommend spike trading as an option when there is great uncertainty in the markets; also the liquidity is very good at the moment if you are using an ECN broker.
Historical Chart and Data for CA Core CPI m/m

All the best

Stavro D’Amore

 

[jokkymum]

Confused

Forecast 4.3%
Previous 4.2%
Pair to trade: GBP/USD
The numbers we will look for:
BUY GBP/USD if we get 4.5%
SELL GBP/USD if we get 4.0%

Pls where do i get the tradable figures so i can know whish trade to place?

 

[jokkymum]

Confused

Forecast 4.3%
Previous 4.2%
Pair to trade: GBP/USD
The numbers we will look for:
BUY GBP/USD if we get 4.5%
SELL GBP/USD if we get 4.0%

Pls where do i get the tradable figures so i can know whish trade to place?

 

[Arindam Das]

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Thnx n rgds

AD

 

[Stavro D'Amore]

Hi Stavro,

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Is this site authenticated ? Can I invest on this ?

Are they real ?

Few words from you will be highly appreciable and helpful from me.

Thnx n rgds

AD

Sorry I cant say, I never heard of them. The site does not look appealing to me. I like to stick to people I know in this industry.

 

[samfx]

Stavro,

You have said that:
From the original price before the spike to the tip of the spike, I use estimation; I then quickly draw lines so I know the level, easier to look at 5 min chart on spike than enter on 15min.


The spike usually happen within the first minute bar. From the original price before the spike to the tip of the spike. and usually market retrace after that first minute spike or continues higher.

If it continues higher without retracement after the first minute spike, we should consider the tip of the spike even after few minutes spiking up without retracement. Then whenever it retraced that will be the tip of the spike.

Does that make sense?

I am using Fibinocci retracement on the original spike to see how much it would retrace to what level (0.32 or 0.61) and based on that I decide to enter. It's different with every release/trade, and you never know to what level it will retrace and if it will even reach any or these levels or deeper,
or if not at all.

Is that a good approach or method to trade the retracement.
You said you draw a line, what do you mean and how you measure 30% or 50%?

On average how many pips of stop loss we should consider, is it true the deeper the retracement the bigger the stop loss should be?

Thank you for your valuable info, very much appreciated.