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Forex Signal (Friday August 26, 2011 NY TIME 4:30am EDT) UK Revised GDP q/q

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Aug 25, 2011.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    UK Revised GDP q/q
    Forecast 0.2%
    Previous 0.2%
    Pair to trade: GBP/USD

    Numbers we need: BUY GBP/USD 0.4%
    SELL GBP/USD 0.0%

    Economical Impact: High
    Typical Result: Good for currency
    Occurrence: Quarterly, about 55 days after the quarter ends
    Spike Probability: Good, we can see 50 pips on initial spike

    About our Triggers:
    UK Revised GDP q/q is forecasted to arrive at 0.2%.
    We are looking for a deviation of 0.2% either way on this trade.
    If we get 4.0% or better I will look to enter a LONG position on GBP/USD and if we get 0.0% or lower I will go SHORT on GBP/USD.
    Should this report be triggered, we can expect to see about 40 to 50 pips on the initial spike.

    NOTE: We have UK business investments and UK index of services due at the same time; however I do not see a risk in conflict.

    What is it? And why does the market care?
    It's the broadest measure of economic activity and the primary gauge of the economy's health. The Gross Domestic Product (GDP) is the broadest measure of economic activity and is a key indicator for the economy's health. The quarterly percent changes in GDP shows the growth rate of the economy as a whole.

    The 'Previous' listed is the 'Actual' from the Preliminary release and therefore the 'History' data will appear unconnected. There are 3 versions of GDP released a month apart - Preliminary, Revised, and Final. The Preliminary release is the earliest and thus tends to have the most impact.

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

    Method I use to trade this:
    Stavro D’Amore Trading Method
    I will look for a 30% to 50% retracement in the original spike before entering. I will be looking at a 5 minute chart. 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 the original spike 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 to analyse this.

    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. Please use no more than 12 pip limit order.

    Historical Chart and Data for UK Revised GDP q/q

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Aug 25, 2011
    Lasted edited by : Sep 8, 2016
  2. Maatej

    Maatej Recruit

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    Hi Stavro,

    I do not want to discourage you but do you really profit from your recommendations? I mean you almost always recommend trading after the retracement in the original spike. I have seen couple of historic charts but found very few retracements near 30-50% levels.

    It seems that a better method to trade the news is spike trading or trying to enter into trade after the initial spike into the opposite direction of the spike. What is your take? Or have I overlooked something?

    I really look forward to your answer. Thank you a lot.

    Martin
     
  3. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    No need to discourage me I have been trading full time forex over 12 years, I have had many losses and made lots of money too but its all about balance, I have been news trading for about 7 years. Spike trading is very hard, for the following reasons:

    1) bad broker fills
    2) speed and execution
    3) Spread during fill
    4) Liquidity

    There are many more reasons, but for you to get in a spike you must eliminate speed and execution and liquidity, which is the main two reasons.
    90% of the time there will be a retracement, If your looking at charts you may not see this… remember a retracement goes for 20seconds to a min and if your looking at a candle chart it will register the close of each 1min tick, you wont see the live retracement/price action in a chart, if you open a tick by tick chart watch the trades live you will see this.
    I only get in on a 30%- 50% retracement if my triggers are hit and I miss the spike, obviously I’m using an ECN broker with a good news feed auto clicker.

    Here is a little insight that I will expose you to in regards to news feed and to get the spike trading right. You must have the following to even a have a chance in trading the news successfully with an auto clicker.

    First of all you need a good ECN broker with a quick and fast execution with a deep liquidity pool, don’t bother with demo accounts to try Demo accounts during news releases always do well. You will need to test a few ECN brokers using real money example $500 and see what there like.
    Make a list of 7 brokers that you feel that will be good! Example: Deep liquidly, No dealing desk STP, No requotes, and moist of all a broker that will give you your money!
    You will need to know were there server is located too (Example) broker XYZ is in California you will then use a VPS that is based in California. You must ensure that you broker and Auto clicker servers are not to far best option is to have them in the same country or region.

    When it comes to news you’re trading the Arbitrage in Price.

    Your second option is to have a similar setup with a few tweaks, but if you have a spare $150K you can open a special account, with very deep liquidity and super speed execution that is linked directly to Banks and very deep liquidity pools that you can only imagine! You will get good fills 80% of the time and you will always get in a trade, (remember good fills and execution are both different don’t get them confused) The spreads are the best and you will need to brand your self as a company as it will require you to be an institution to have this service, I wont get into this to much as this is a whole different topic and I really want to save this for my Part II of trading strategy.

    And for all you out there who want to know my broker! I will not discuss it here in the forum, my position here is a consultant to news trading plans and strategies because I do it well. But if you find a way to contact me in person ill be more than happy to speak to you via phone email or even meet you and discuss any news trading aspects or guide you to a method.

    I hope this information has helped you.

    All the Best

    Stavro D’Amore
     
  4. georgeta

    georgeta Sergeant

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    Hello Mr. Stavro!
    I am a bit confused. Your description of the strategy is impressive, with very good details. I am a bit confused though. You said you are watching the 5min chart when trading the news but then you say that you see the retracement in tick chart. 1. So which one is it?
    2. If you are using the tick chart how do you see when the original spike is over?
    3. What is an auto clicker?
    Thank you for your time and information!
     
  5. Maatej

    Maatej Recruit

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    Hi Stavro,

    thank you for your quick reply. I absolutely agree that spike trading is risky. I was doing it myself some time, made nice money but then my broker cut me off. I then had to take on a regular job:).

    When it comes to you recommendations, you are right, I did not think of retracement within the first minute after the news release. I was looking only at the 1M candle charts. I could not have seen the action within the 1st minute.

    On the other hand, I saw today in GBPUSD that entering even after the retracement in the 1st minute can be very tricky, risky and dangerous. The price moves pretty fast, whipsaws etc. So you absolutely need a software that will help you opening and closing the trades (doing it manually with mouse clicking can cost you lots of money).

    What do you think of entering trades in the opposite direction of the spike, lets say 1-2 minutes after the news release? It seems to me from the historical charts that it might be a profitable venture:). The price tends to move back to the level when the news was released...

    If there is a guide, FAQ, or news trading for dummies section where everything is explained, please post a link. Thank you in advance.

    Martin
     
  6. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Yes I watch a 5min chart during the news.
    In regards to the tick by tick chart is what you would need to see for a past retrcement.
    an Auto clicker is a special software that the numbers feed into and buys and sells for you within the millisecond

    regards

    Stavro D'Amore
     
  7. ntuthuko

    ntuthuko Recruit

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    Auto clicker

    Can you please suggest what auto clicker software is the best for news trading and provide a link if possible.Thanks for the good work keep it up
     
  8. Diana Fogl

    Diana Fogl Recruit

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    news trading

    Hi Stavro,
    you mention using pending orders before a news release. How do you handle both directions, and the volatility which sometimes exists immediately after a news release - ie. how many pips above and below the price ( and how many minutes before) the new release, and where do you put the SL's?
    Diana

    P.S. I find that the market reacts before I have found out what the news release is, so a pending order would work better to catch the spike.
     
  9. Diana Fogl

    Diana Fogl Recruit

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    autoclikcer

    also, you mention the auto clicker. is that specific to news trading and where do you get one?
    Diana
     

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