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Forex Signal (Wednesday April 25, 2012 NY TIME 4:30am EDT) – UK Prelim GDP q/q

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Apr 25, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

    Jul 29, 2011
    Likes Received:

    Please see my trade Plan below:

    UK Prelim GDP q/q
    Forecast 0.1%
    Previous -0.3%
    Pair to trade: GBP/USD

    Numbers we need:
    BUY GBP/USD 0.3%
    SELL GBP/USD -0.1%

    Economical Impact: High
    Typical Result: Good for currency
    Occurrence: Quarterly, about 55 days after the quarter ends
    Spike Probability: Good, we can see 50 pips on initial spike

    About our Triggers:
    UK Revised GDP q/q is forecasted to arrive at 0.1%.
    We are looking for a deviation of 0.2% either way on this trade.
    If we get 0.3% or better I will look to enter a LONG position on GBP/USD and if we get
    -0.1% or lower I will go SHORT on GBP/USD.
    Should this report be triggered, we can expect to see about 40 to 50 pips on the initial spike.

    What is it? And why does the market care?
    It's the broadest measure of economic activity and the primary gauge of the economy's health. The Gross Domestic Product (GDP) is the broadest measure of economic activity and is a key indicator for the economy's health. The quarterly percent changes in GDP shows the growth rate of the economy as a whole.

    The 'Previous' listed is the 'Actual' from the Preliminary release and therefore the 'History' data will appear unconnected. There are 3 versions of GDP released a month apart - Preliminary, Revised, and Final. The Preliminary release is the earliest and thus tends to have the most impact.

    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 will look for a 30% retracement in the original spike before entering. TI will use Fibonacci retracement , 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 analyse this.

    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 use no more than 15 pip limit order.

    Historical Chart and Data for UK Revised GDP q/q

    All the best

    Stavro D’Amore

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