Fxonuoha
Private, 1st Class
- Messages
- 34
Forex Signal (Thursday December 8, 2011 - 7:45am) EDT - EU ECB Interest Rate
- Thread starter Stavro D'Amore
- Start date
It went up most likely because the cut was the -.25%, as expected, and not -.5%, which was a possibility. Made for a great short going with the risk trade. Hard to say what Trichet's speech will do....I'm betting more down.
Perfect Risk Trade Scenario
Yet again, the news hardly mattered and the risk trade was by far the most dominant force to move the markets. Today's action is what I dream of....the news went against the risk enviroment trade, the markets briefly moved with the news, setting up a great USD long bet.
Stocks were slightly down...so the USD had gained slightly. Then the EUR news came out as expected, and for some reason...resistance on the chart maybe...the market response was against the USD. So far, so good. Then, 45 minutes later, the US weekly jobs report came in good...should of been good for the USD if you think the news matters...but it responded to the risk trade and the USD weakened some more...stocks should of seen this as positive. And they did, US futures improved. Then, stock futures dropped and the race was on! EU lost 150 pips, AUDUSD lost nearly 200 pips, USDCAD gained 150 pips, USDCHF gained 100 pips, and EVEN the USDJPY gained 60 pips! When was the last time the USDJPY moved 60 pips in a couple of hours???
The fact that the USDJPY moved with the risk...it went DOWN when the 'good' jobs report came out...is significant and every one of you that trade the USDJPY on US news needs to heed this. If this continues, and you are set up to go long on good US news, you will take a huge loss...the USDJPY will do the exact opposite.
Today was one of the best days I've had for some time.
Yet again, the news hardly mattered and the risk trade was by far the most dominant force to move the markets. Today's action is what I dream of....the news went against the risk enviroment trade, the markets briefly moved with the news, setting up a great USD long bet.
Stocks were slightly down...so the USD had gained slightly. Then the EUR news came out as expected, and for some reason...resistance on the chart maybe...the market response was against the USD. So far, so good. Then, 45 minutes later, the US weekly jobs report came in good...should of been good for the USD if you think the news matters...but it responded to the risk trade and the USD weakened some more...stocks should of seen this as positive. And they did, US futures improved. Then, stock futures dropped and the race was on! EU lost 150 pips, AUDUSD lost nearly 200 pips, USDCAD gained 150 pips, USDCHF gained 100 pips, and EVEN the USDJPY gained 60 pips! When was the last time the USDJPY moved 60 pips in a couple of hours???
The fact that the USDJPY moved with the risk...it went DOWN when the 'good' jobs report came out...is significant and every one of you that trade the USDJPY on US news needs to heed this. If this continues, and you are set up to go long on good US news, you will take a huge loss...the USDJPY will do the exact opposite.
Today was one of the best days I've had for some time.
Stavro D'Amore
Former FPA Special Consultant
- Messages
- 547
If you tend to hold major trades like this and they go against you usually the pull back is quite quick, trades tend to reverse towards the correct way they should have went by the close / open of a Newmarket session
OK
Even more so when risk trade direction is in your favor...
If stocks had headed up, the EU (and AU and GU) would of went up with them. Fortunately in this case, stocks (and risk) agreed with the direction of the trade, but only after stocks had chosen a direction.
The USDJPY reacting in the direction of the risk trade...down in this case when the US Weekly Jobs Report was positive...is big. Then, when stocks spun around and headed down...the USDJPY headed up. This in new, and, ignoring this correlation will lose you money. If you trade NFP using the USDJPY in the direction of the US news...that may really leave a mark.
Every news trade you are considering, you have to look at the direction implied by the news, to the stock markets. Many trades don't have much affect on stocks...but they are still affected by the risk at that moment. The currency reaction, to the news that has a direct affect on stocks, is nearly non-existent right now. It's a very good setup to lose money.
Even more so when risk trade direction is in your favor...
If stocks had headed up, the EU (and AU and GU) would of went up with them. Fortunately in this case, stocks (and risk) agreed with the direction of the trade, but only after stocks had chosen a direction.The USDJPY reacting in the direction of the risk trade...down in this case when the US Weekly Jobs Report was positive...is big. Then, when stocks spun around and headed down...the USDJPY headed up. This in new, and, ignoring this correlation will lose you money. If you trade NFP using the USDJPY in the direction of the US news...that may really leave a mark.
Every news trade you are considering, you have to look at the direction implied by the news, to the stock markets. Many trades don't have much affect on stocks...but they are still affected by the risk at that moment. The currency reaction, to the news that has a direct affect on stocks, is nearly non-existent right now. It's a very good setup to lose money.
Louis123321
Corporal
- Messages
- 173
You need to read & understand exactly what the signal is, it didn't go down because Stavro said IF the interest rate was reduced to 1% it will go down, but it didn't, therefore it wasn't triggered. I lost some money on this too, too bad though, should wait for the trigger before entering the trade next time even if there's a high chance of it changing. ! To be safe, risk/gain reward ratio isn't so good if we don't wait for the official trigger..
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