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Forex Signal (Fri July 1 2011, 10:00am NY Time EST) - US ISM Manufacturing PMI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jun 30, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    ISM or Institute for Supply Management is releasing its PMI (Purchasing Manager Index) today. As a leading indicator, traders generally pay attention to this report for hints of economic trend.

    Here's the forecast:
    10:00am NY Time US ISM Manufacturing PMI Forecast 52.0 Previous 53.5
    ACTION: 54.5 BUY USDJPY / 49.5 BUY EURUSD


    Trade Plan
    We'll be looking for around 2.5 points of deviation for this trade. If a 54.5 or better number is released, we could see some USD strength and JPY weakness, thererefore a BUY on the USD/JPY. If the opposite is true, or 49.5 figure is released, expect to see weaker USD in the short term, therefore we should BUY EURUSD.

    If our tradable releases are reached, there is a good expectation of 50 pips of market movement within the next 60 minutes on USD/JPY or EURUSD. I'll also be looking to trade other JPY crosses as they may all exhibit similar movements using my Retracement Trading Method:
    Henry Liu's Trading Method

    The Market
    ISM PMI's are leading indicator as stated before, and usually they do not affect the long-term trend of the market, unless we get a huge surprise. However, with that being said, July 1 is a new quarter and the start of the second half of 2011, market is likely to overreact to any surprises.

    Additional Thoughts
    We'll trade this release following our trading plan as stated above... Remember this is a leading indicator, the period that it focuses is for this month, therefore on a positive surprise, traders could speculate on better employment data for next Friday...

    Pre-news Considerations
    There are no pre-news trades for this release.

    DEFINITION:
    The Institute of Supply Management (ISM) Manufacturing Index measures the activity level of purchasing managers in the services sector, with a reading above 50 indicating expansion. A rising trend has a positive effect on the nation's currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely because purchasing managers, by virtue of their jobs, have early access to data about their company's performance, which can be a leading indicator of overall economic performance.

    Historical Chart and Data for US ISM Manufacturing PMI



    Thanks,



    [​IMG]
     
    #1 Henry Liu, Jun 30, 2011
    Lasted edited by : Sep 8, 2016
  2. yurps

    yurps Private, 1st Class

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    careful of Risk, Aversion

    Mr. X continues to advice trading EURUSD on US Data releases....
    this is despite a number of cases where the EURO does not react well, it seems Mr. Liu is simply in cookie cutter mode, and a continuous fresh stream of newbs are drawn to this bad advice before being thrown into the jaws of the market....or indeed marketeers...

    EURUSD reacts to Risk On/Off trade, with bad US data you would expect the USD to loose strength, but actually when Risk is OFF the USD can and usually does strengthen. This is not always the case, but it is the majority of the time.
    it is best to SELL USDJPY on a BAD ISM number...the next best option is to Sell the USDCHF, sometimes this pair can be better, but not always.

    Simply stated USDJPY has the most consistent reaction to US news period....it might not always make the most pips, but if that is what u are worried about go trade the USDNOK, u can always add more lots.
     
  3. yurps

    yurps Private, 1st Class

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    The only way is to have a chance in hell of getting filled is to use Secret News Weapon, u get the speed of reuters/bloomberg and other high speed news services but you pay only 100's of dollars not 1000's like those other services.

    the other factor is the broker. News spike trading developed because retail fx brokers were quite new about 5 years ago and they actually could not move their prices fast enough and you could get filled before the spike. Some brokers would pay the profits others didn't...soon they added delays, slippage, spread widening and made it more difficult to nearly impossible.

    There are new brokers popping up all the time, some r in some small island and if u open an account u might not ever see your money again. Others can work, sometimes if u have a new account it will fill nicely at first but when the broker sees you are making all your money on the news they will change ur account so they delay your trades. You can then switch to the real market ECN for forex, or even try Forex Futures...here u will find slippage, so now u have to widen the triggers, just wait for the very big deviations and the market will continue for alot of pips, so it doesn't matter if you have slippage.

    Unfortunately the easy days of news trading are gone, but if u are persistent and work hard at it u might find some opportunities if u look around...there is no more low hanging fruit...u have to climb and search around.
     
  4. Indra Wijaya Kasuma

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    a suddenly change in USDJPY

    hi, I'm a newbie in this forex.
    I simply followed the advice at this trade.
    when I see the ISM touch higher than 54,5, I open the MT4. USDJPY went up about 25 points, and I bought it. It still went up, but suddenly it dropped very fast, about 40 points from where I bought.
    How come it changes direction so fast and suddenly?
    what's wrong with the news?
     
  5. Anthonia Taiwo

    Anthonia Taiwo Private

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    I have a challenge you said 54.5 BUY USDJPY/ 49.5 BUY EURUSD my USDJPY value is 80.05 to 80.30 in the vertical scale while EURUSD is 1.4055 to 1.4615 I use mt4 so what can I do?
     
  6. htching

    htching Recruit

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    I am also in the red now after I followed Henry Liu"s retracement trading method. Should I close my trade? Is his method doesn't work all the time? Anyone here using his method and successful? Why USDJPY went down instead when the ISM number is stronger than expected?
     
  7. Indra Wijaya Kasuma

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    dunno what to do...

    I followed the GBP signal advise at 4.30 am, I lost my chance to get into the market, but still catch up to sell GBPUSD, and closed the trade with 15 pips profit, just before it changes direction to a higher point. I'm lucky to closed the trade, because until today the GBPUSD went up so high, and if I don't closed my trade, I would get my margin call.

    But for this USDJPY case, I too, don't know what to do.
    I haven't closed the trade too, and I don't know what I have to do know.
    Can it bounce back to a higher point so I can close my trade at BEP, or maybe to minimalize the loss...? :confused:
     
  8. davedubai

    davedubai Private, 1st Class

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    I am using two platforms one from US broker and other an EU Bank , I am convinced that either of them are having some delay which is bound to happen as the trading volume is so very high during such news. The stretegy as defined by Mr. Henry have been found to be accurate and possible to execute 70% of the times. I have seen the reversal in prices when the some support / resistances are achieved either in 4 hr charts / daily charts .. Flipping charts between 1 hr / 4 hr / Daily needs to be monitored in order to decide your threshold . The trend usually sets in when you see Five minute charts in next 5- 10 minutes of the news the two bars or candles do tell a lot for deciding your target for profit taking or booking loss.

    All banks irrespetive of continent / type of account that a client have face same criticism over this perticular instance of trading during highly important news, and so to say some may take undue advantage in their favour at the time by not getting clients order filled !
     
  9. matiplo

    matiplo Private

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    ok, I would like to thank You, Boko Maru, for all you shared with me. Great THANKS to You! :)
     
  10. odafe robert

    odafe robert Recruit

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    i agree wit yurps but Mr liu did make a statement which i also agree to, that is 'ISM PMI's are leading indicator as stated before, and usually they do not affect the long-term trend of the market, unless we get a huge surprise'
     

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