Forex Signal (Tuesday January 17, 2011 – 9:00am EDT) – CA BOC Rate Decision

[Stavro D'Amore]

Hello

Today we have CA BOC rate decision please see my trade plan below.


CA BOC Rate Decision
Forecast 1.00%
Previous 1.00%
Pair to trade: USD/CAD

Numbers we need:
BUY USD/CAD 0.75%
SELL USD/CAD 1.25%

Economical Impact: High
Typical Result: Hawkish is Good for Currency
Occurrence: Scheduled 8 times per year
Spike Probability: Good, we can see 60 pips on initial spike

About our Triggers:
CA GDP m/m is forecasted to arrive at 1.00%
We are looking for a deviation of 0.25% either way on this trade.
If we get 1.25% or better I will look to enter a SHORT position on USD/CAD and if we get
0.75% or lower I will go LONG on USD/CAD.
Should this report be triggered, we can expect to see about 60 pips on the initial spike.
We have no known conflict for this release. This trade will have a good chance of a 30% retrace on the initial spike

What is it? And why does the market care?
The Bank of Canada (BOC) decision on short term interest rate. The decision on where to set interest rates depends mostly on growth outlook and inflation. The primary objective of the central bank is to achieve price stability. High interest rates attract foreigners looking for the best "risk-free" return on their money, which can dramatically increases demand for the nation's currency.

A higher than expected rate is positive/bullish for the CAD.
A lower than expected rate is negative/bearish for the CAD.

Method I use to trade this:
Stavro D’Amore Trading Method

Felix Trading indicators:
Trading Descriptions

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 BOC Rate Decision

All the best

Stavro D’Amore

 

[bamzi]

Hi Stavro,

I am completely new comer in this web site while it looks like quite educating to me. I just wonder where should I start from to understand your trade plans exactly. For instance I could not understand 1.0% refers to rate at which point in time? Could you please little bit elaborate on that or give me another link where I can understand the basics.

Best regards.

 

[dmedraft]

Help for a newbie

Hello

Today we have CA BOC rate decision please see my trade plan below...........................................................

Sorry but I need a little more guidance here, I'm new at this.

I'm thinking that just before the news release I set up a market order and set my leverage but wait until the news is released and depending on the news I then set either a sell or a buy. Any additional instruction would be helpful.
Dean

 

[JanPoko]

Dean and Banzi,
stop trading and go to the forex school immediately, otherwise you will blow up your account in no time. I am sorry to say that, but the level of your ignorance as far as forex is concerned is simply overwhelming. No one could teach you enough just on the forum. You evidently have some weeks or even months of study to do...