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Forex Signal (Friday February 17, 2012 NY TIME 8:30am EDT) – US CORE CPI

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Feb 16, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Hello

    Please find attached the trade plan for today.

    US CORE CPI
    Forecast 0.3%
    Previous 0.1%
    Pair to trade: GBP/USD
    Estimated Pips: 40 pips on initial spike

    The numbers we will look for:
    BUY GBP/USD at -0.1%
    SELL GBP/USD 0.5%


    Economic Impact: High (will bring strong volatility)
    Typical Result: Good for currency
    Occurrence: Released monthly, about 15 days after the month ends

    About our Triggers:
    We will be looking for a deviation of 0.2 % to BUY USD/JPY and -0.2 to SELL GBP/USD.
    If our deviation is hit, there is a strong possibility that the market will move 40 pips on spike immediately; there is a good chance that we will get a 30% retracement before entering if we miss the spike .

    What is it? Why does the market care?
    The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation .

    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

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

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

    Pre News
    Approximately within the 30 minutes and up to 5 min prior to the news release I will be looking for a short term Short position using EUR/USD pair.
    I would be out of this trade 2 minute before the actual release, or to avoid any spreads that should widen to protect myself.

    How to determine my Pre news trade
    Please only follow this if you have basic knowledge of technical, if not please practice and use various demo accounts prior to using any professional strategy I suggest. To determine my short position on an MT4 chart, I will pull up a 1mintime frame EUR/USD chart.

    I will then load two MA (moving average) indicators to my chart, the first MA I will load will be on set to period 9 whilst the other I will set to a period of 20. I would also recommend you change the colour of both I usually use green and red.

    When I see the down trend occur and my MA crosses over I will enter short, I want to be out of this trade in profit at least 2 min before the release. I will have a Stop loss of 15 pips and a TP either when I see the trade looking flat (looking at Volume Bars that is) or when an initial reversal comes to play.

    Your MA should look like the chart below, red and green I would have entered short on this trade during the cross over.

    [​IMG]


    Spike Trading
    I do recommend spike trading as an option if you have an Auto clicker.
    Please use limit orders or bounds set to 15 pip entry

    After Spike
    I will look for a 30% retracement in the original spike before entering a trade; I will close 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 expect to be in this trade for a total of 30 mins.

    Historical Chart and Data US CORE CPI

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Feb 16, 2012
    Last edited: Feb 16, 2012
  2. hamiltonalexny@gmail.com

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    can someone explain to me why does he say that he will look for a LONG in the eur/usd pre news and then explains how he will get a short
     
  3. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Have amended should be short thanks :)
     
  4. hamiltonalexny@gmail.com

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  5. Jyotiprakash Pal

    Jyotiprakash Pal Sergeant

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    Thanks a lot sir
     

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