Dear FPA Members,
Hello and welcome to Part 1 of the Stavro D’Amore trading method.
During news releases, I will provide certain triggers/signals.
This document will outline and explain the strategies you can use to interpret my signals. I will also include information that may be informative to you.
To interpret my Forex signals I will have a very straight forward trade plan. I will provide triggers that I call
“Conservative Triggers” that will be a BUY/SELL trigger.
Example of the conservative trigger for US Advanced GDP would look like this:
8:30am (NY Time) US Advance GDP q/q Forecast 1.6% Previous 1.9%
ACTION: USDJPY BUY 2.0% / EURUSD BUY 1.2%
I will outline
“The Market” providing you with a brief description to what is actually happening with current trade news. This may also include recent reports, past reports and any other relevant information that you need to be informed on.
There will be a separate field called
“Additional Thoughts” this is when I will explain my own personal opinion and anything else that I need to include to further assist you.
I will incorporate my
“Pre-news Possibilities”. Should there be any pre news that I see potential in for a trade, I will provide relevant information required on these possibilities.
There are many strategies in trading releases and I will endeavor to explain the three widely used and main strategies in trading the news.
I will begin to explain these methods and how we may interpret and use them in our upcoming signals.
Spike trading:
Simple spike trading is to actively enter on the news release using various methods such as an auto clicker. The most common trading method that seems to work is to set limit orders or buy/sell stop orders before the actual news release. This explained method should be used with caution, as some brokers may provide a slippage and fill you at a price that could be better or worse than you expected.
Pre-News trading:
Trading the pre-news release is to understand the market hype before the actual news release. This method is a great way of earning pips.
To understand this, I use a study that is called reflexivity (social theory) as I believe it is the easiest way to understand the way that the market interprets the hype before the release. Simply, it is a circular relationship between cause and effect and the way the market thinks, remember the market is always right no matter how we think.
Reflexivity assumes that prices do in fact influence the fundamentals and/or direction of the expected deviation.
Example: US Core Sales was strongly expected to come at 0.2% and we are trading USD/JPY; meaning if this figure were to be released it would be a BUY signal. So what we are doing prior to the news (a pre market trade) is to go long 3-4 min before the release. What we actually doing is going with the fundamentals and market hype and exit prior to the news release…should there be a surprise deviation.
After the News release:
Trading after the news release is to see our conservative triggers are hit; I usually get in within 15pips or closer to the pre release price, or on a significant 50% retracement on the spike. Any worse retracement on the spike will be too risky to enter.
In trading the news release and using my signals I like to trade the following main releases as they have the highest impacts:
- Interest rate decisions
- Retails Sales
- CPI
- Unemployment
- Industrial production
- Business sentiment surveys
- Consumer confidence
- Trade balance
- Manufacturing surveys
I hope my trading methods provided have been invaluable and in due course, I will provide a second part that will have further depth in trading strategies that we may be able to utilize and benefit from.
All the best
Stavro D’Amore
