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Forex Signal (Monday April 23, 2012 – 9:30PM EDT) – AU CPI q/q

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Apr 22, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Hello

    Please see my trade plan below

    AU CPI q/q
    Forecast 0.7%
    Previous 0.0%
    Pair to trade: AUD/USD

    Numbers we need:
    BUY AUD/USD 1.0%
    SELL AUD/USD 0.4%

    Expected Pips probability: 35
    Economic Impact: Extreme
    Typical Result: Good for currency
    Occurrence 25 days after the quarter ends

    About our Triggers:
    AU CPI q/q is forecasted to arrive at 0.7%
    We are looking for a deviation of 0.3% to LONG the AUD and a deviation of -0.3 to SHORT the AUD.
    If the numbers we get 1% or better I will look to enter a LONG position on AUD/USD and if we get 0.4% or worse I will go SHORT on AUD/USD.

    Should this report be triggered, we can expect to see about 35 pips on the initial spike. 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 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 and bullish for the AUD
    A lower than expected reading should be taken as negative and bearish for the AUD

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

    Pre News trading
    Approximately 25 minutes prior to the news release I will be looking for a short term SHORT position in AUD/USD.

    I would be out of this trade 5 minute before the actual release, or to avoid any spreads that should widen.

    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.

    Spike
    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 note
    Australian data is known for Latency should the spike begin and your Auto clicker has not provided a number please cancel your spike trade to avoid yourself getting caught with slippage; you will have a better chance using retracement and pre news methods.

    Historical Chart and Data for AU CPI q/q

    All the best

    Stavro D'Amore
     
  2. philip langley

    philip langley Recruit

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    Hi,Stavro, dont understand this buy 2.0% when when it should be sell, would it be better to say,
    monday 23rd of 4th sell jpy on all currencies, now that i can understand, regards Phil
     
  3. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Great trade

    That was a great trade made a return of more than 53 Pips
     
  4. PipDog

    PipDog Corporal

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    Spike Trade?


    You must of done the spike trade and got a really good fill...the spike was only 60 pips. There was no way to go short after the spike to make that many pips...it only re-traced about 25 pips about an hour after the spike, then went down a maximum of 35 pips after that re-trace. The AU has been almost nothing but up since the spike. I took a long on the spike and got 12 pips. Wish I'd stayed in...the AU is about where it was pre-spike.

    But that news did move it good!
     
  5. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    I got in at the spike i always do. I have a direct feed.
     
  6. PipDog

    PipDog Corporal

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    I think I'd like to know more about that feed of yours...
     
  7. Boko Maru

    Boko Maru Sergeant

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    Ha, yeah let me know about it too :) I've been spike trading for years, and have what I thought was the best setup possible without spending 10's of thousands per month. But if you have something you're willing to share, you can always PM me...:)

    P.S. I had a no fill on this spike, and didn't think anyone got in. Am impressed that you did...
     
  8. PipDog

    PipDog Corporal

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    Boko,
    I also was denied trade at the news. I did take a re-trace buy near the bottom...got like 12 pips.
     
  9. Boko Maru

    Boko Maru Sergeant

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    Nice job buying the bottom there. I tried shorting after the retracement, but of course that didn't work. Small loss, but still a bit frustrating after seeing that beautiful spike :)
     
  10. PipDog

    PipDog Corporal

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    Boko,
    I'll setup to take a spike trade on a CPI (any CPI), but I set my triggers rather conservative...they are notorious for reversing. My best play on these has be play the reversal...more so if the original news came out in the opposite of the current risk direction...like this one.
     

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