Forex Signal (Thursday March 1, 2012 - 10:00am EDT) - US ISM - Manufacturing PMI

Stavro D'Amore

Former FPA Special Consultant
Messages
547
Hello all,

Today we have US ISM manufacturing due for its release; I have provided my strategy and some information in my trade plan below so we can earn some pips.

US ISM Manufacturing PMI
Forecast 54.5
Previous 54.1
Pair to trade: EUR/USD
Considering: USD/JPY for prior release or after spike
Triggers we need: 57.0 SELL EUR/USD / 52.5 BUY EUR/USD

Economical Impact: High
Typical Result: Actual forecast is good for the currency
Occurrence: Released monthly
Spike Probability: Good, we can see 30 pip spike

About our Triggers:
Current forecast is 54.5 We'll be using deviation of 2.5 points in order to BUY or SELL USD.
In the event that 56.5 is reached, we could see some USD strength and EURO weakness. Therefore you could SHORT SELL EUR/USD; however, if the opposite is true and a figure of 52.5 or lower is released, expect to see stronger EUR and I will be buying EUR/USD pair


What is it? And why does the market care?
It's a leading indicator of economic health and businesses both global and local businesses will react quickly to market conditions. A Higher deviation means industry expansion, lower deviations indicates a significant contraction in the economy. It is derived by a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries and inventories

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

Revision
Please keep in mind possibility of Revision number before entering any of these strategies.

Pre News
Prior to the release (20-15 mins) I will be looking for a short term long position in EUR/USD and I will get out of this trade 5 minutes before the actual release or any spreads that should widen.

Spike
I'd recommend spike trading as an option when if you’re using an ECN broker with controlled fills or a broker that you can get filled with.

After Release
I will look for a 35% 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 level looking at a 15 min time frame. If my triggers are hit I will defiantly try to run this for over 120 minutes depending on current market volume, to do this I will look for a choppy volume (if you’re using MT4 you would look for the volume bar tab).

Historical Chart and Data for US ISM Manufacturing PMI


All the best

Stavro D’Amore
 

Greg6755

Recruit
Messages
6
Yesterday spike EURUSD

Steeve I'm just getting back into this after a prolonged illness so I need to catch up...yesterday around noon ET there was a spike and follow through of significance but it was considerably after a news event or did I miss something? Can you explain for me when you get the time? Thanks G
 

Greg6755

Recruit
Messages
6
I think i found it...

Steeve I'm just getting back into this after a prolonged illness so I need to catch up...yesterday around noon ET there was a spike and follow through of significance but it was considerably after a news event or did I miss something? Can you explain for me when you get the time? Thanks G


................around 10 am yesterday Bernanke spoke re: inflation right?
 
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