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Forex Signal (Wednesday February 22, 2012 NY TIME 10:00am EDT) – US Existing Home Sales

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Feb 21, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Hello

    Please see my trade plan

    US Existing Home Sales
    Forecast 4.65M
    Previous 4.42M
    Pair to trade: EUR/USD

    Triggers we need: BUY EUR/USD 4.25M
    SELL EUR/USD 5.05M

    Economic Impact: Extremely Critical
    Typical Result: Good for currency
    Occurrence: Released monthly, about 23 days after the month ends

    Why trade EUR/USD?
    Low liquidity and current conditions will make this pair move during a release.

    See more info on and the Euro crisis

    About our Triggers:
    US Housing sector forecasted to arrive at 4.65M. We are looking for a deviation on this trade of 400K either way. This is a very critical news release as many traders and economists will be focusing on this news release. Should this trade deviate, we will see major volatility in all US pairs. We can expect to see about 45pips on the initial spike, before another 20 pips on a double spike, before we see our required retrace.


    What is it? Why does the market care?
    The Existing Home Sales measures the annualized number of existing residential buildings that were sold during the previous month. This report helps to analyze the strength of the US housing market, which helps to analysis the economy as a whole. While this is monthly data, it is reported in an annualized format (monthly figure x12). Existing homes make up the majority of total sales and therefore tend to have more impact than New Home Sales.

    It's a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect. For example, renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction. A higher than expected reading should be taken as positive/bullish for the USD, while 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

    Approximately 15 minutes prior to the news release, I will be looking for a short term Short position in EUR/USD.
    I would be out of this Short trade 2 minutes before the actual release, or to avoid any spreads that should widen.

    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.

    I do recommend spike trading as an option

    Historical Chart and Data for US Existing Home Sales

    All the best

    Stavro D’Amore
     
  2. Jyotiprakash Pal

    Jyotiprakash Pal Sergeant

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    Thanks sir .. i am very new in news trading
    Prior News i will follow ur mathod on 1 min chart

    but sir after news .. will check 1 min chart for 30% retracement ... ?

    sorry for disturbing you but i am very new
     
  3. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Check the 15min chart for retracement
     
  4. sexytrader

    sexytrader Recruit

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    Dear Stavro!

    I just want to say thank you. I ve tried many techniques and various software, but now I m actually starting to make money on forex now, because of the signals you ve been posting!
     
  5. RahmanSL

    RahmanSL Major

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    Forecast 4.65M
    Previous 4.42M
    Pair to trade: EUR/USD


    This being an election year and all, I dare say the figures will come out as "forecasted" or a little bit "better than expected".
    In anticipation of this "better than expected" official announcement, I am shorting the hell out of the EUR/USD for today....and also Gold (due to its correlated relationship) which normally drop like a ton of bricks when the USD appreciates :p

    Well, we shall find out soon enough today!
     
  6. Jyotiprakash Pal

    Jyotiprakash Pal Sergeant

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    Thanks sir :D
     
  7. Jeffpark

    Jeffpark Private, 1st Class

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    Hi Stavro - is an alternative trade set up to take 2 trades very close to announcement. a sell with small stop ;loss and a Buy with short stop loss. Whichever one loses will cost little & whichever wins should make a bit more.

    Jeff
     
  8. Boko Maru

    Boko Maru Sergeant

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    You asked Stavro, but I'll chime in if that's ok. What you are describing is called a news time straddle, and unfortunately it rarely works unless you have a fixed spread broker that doesn't widen spreads at news. And brokers like that are almost unheard of these days (although they existed in abundance 2006-2008, the news trading "happy time" hehe...). As it is, you will likely have the spread increases at news time hit both your stops and give you a double loss. Or, the whipsaws in price and news time volatility can do the same thing. If you do give it a shot and it works though, then good on you, but it's generally best not to count on trading news that way.

    For what it's worth...:)
     
  9. kaspars99

    kaspars99 Recruit

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    Confused. what was this? During the last 15mins There was no significant movement in EURUSD whatseoever. Did you make any pips on this? Stavro, could please comment how did your trade went?
    Thank you! :)
     
  10. PipDog

    PipDog Corporal

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    Hmmm...Ouch...?
     

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