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Forex Signal (Monday September 5, 2011 – 4:30am EDT) – UK Services PMI

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Sep 4, 2011.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Hello members,

    Today we have UK Services PMI is a leading indicator and it is monthly, on the third business day after the month ends. Traders look at this indicator because It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy

    UK Services PMI
    Forecast 54.3
    Previous 55.4
    Pair to trade: GBP/USD


    Numbers we need:
    BUY GBP/USD 56.3
    SELL GBP/USD 52.3


    Economical Impact: High
    Typical Result: Good for Currency
    Occurrence: monthly, on the third business day after the month ends
    Spike Probability: Good, we can see 30 pips on initial spike

    About our Triggers:
    US Non- Farm Employment Change forecasted to arrive at 54.3
    We are looking for a deviation of 2 to the upside to BUY GBP/USD and a deviation of 2 to the downside to SELL GBP/USD
    So the summary is we get 56.3 or better I will look to enter a LONG position on GBP/USD and if we get 52.3 or lower I will go SHORT on GBP/USD
    Should this report be triggered, we can expect to see about 30 pips on the initial spike.
    This trade will have a good chance of a 30% retrace on the initial spike so I recommend trading the retracement method as stated bellow.

    What is it? And why does the market care?
    UK Services PMI measures the activity level of purchasing managers in the services sector.
    Any reading above 50 indicates expansion, while a reading below 50 indicates contraction.
    It gives an indication about the health of the services industry in the UK. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

    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 do recommend spike trading as an option. Liquidity is very good at the moment if you are using an ECN broker. Please use no more than a 15 pip limit order to control slippage.

    I will look for a 30% retracement in the original spike if our triggers are hit 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 analyze this.

    Historical Chart and Data for UK Services PMI

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Sep 4, 2011
    Lasted edited by : Sep 8, 2016
  2. Khaled Afifi

    Khaled Afifi Recruit

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    I do believe you meant to sell if we got 52.3 & not to buy.
     
  3. Sivamayam

    Sivamayam Recruit

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    Is the Gbp services pmi news at 4.28 am.Pls confirm ?
     
  4. Sivamayam

    Sivamayam Recruit

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    Dear Stavro,
    Is it good putting stop orders 1 min before with Stop loss for this news.i mean both buy stop and sell stop if we are using ECN..............
     
  5. chilie

    chilie Recruit

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    Re- UK Services PMI

    Hi Stavro,

    Thanks a lot for your indept reviews on the news. I'm really curious. This morning's UK Services PMI News came out with a beautiful fast deviation. But I'm wondering, did you make any pips on the news? The price action was really weird. If you made some pips, could you tell us how you did it?
     
  6. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Yes this trade was weired one... I waited and was patient for US strength to take play and I entered 2 short positions after the news release I also looked at at the volume, see the two GBP trades trades and ignore the trades under AUDNZD and bellow as they were not News trades. see attached.

    statement.
     
  7. chilie

    chilie Recruit

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    Did you trade based on the news?

    Thanks Stavro, for your kind reply.

    I have seen the attachment you posted. The UK Services PMI news came out at 4.28am, 05/09/11 but the 2 GBP/USD trades you displayed were placed @ 6.57am 05/09/11 and 7.27am 05/09/11 respectively. Did you take the trades based upon the 4.28am news? Or does one sometimes have to wait a few hours before placing a trade based on news?
     
  8. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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  9. mayur sarkar

    mayur sarkar Recruit

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    open an account

    dear sir,
    i want to knw that i am from india and i want to open an currency account.so please tell me its legal & if legal so where i open an account....
     
  10. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    I'm not sure what your Indian laws are? but were fine here to open a trade FX.
     

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