1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Thursday September 8, 2011 NY TIME 7:00am EDT – UK BOE Interest Rate GDP

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Sep 7, 2011.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

    Joined:
    Jul 29, 2011
    Messages:
    485
    Likes Received:
    1
    Hi All,

    We have BOE wonderful decision today! lets see how smart these guys are :)
    Please see my trade plan below for this sentiment.

    UK BOE Interest Rate
    Forecast: 0.50%
    Previous 0.50%
    Pair to trade: GBP/USD
    Estimated Pips: 50 on Initial Spike

    The numbers we will look for:
    BUY GBP/USD if we get 0.25%
    SELL GBP/USD if we get -0.25%

    Economical Impact: Very High (will bring strong volatility)
    Typical Result: Good for currency
    Occurrence: Released monthly



    About our Triggers:
    It is unlikely the BOE will hike rates to 0.75%. We will BUY GBP/USD as per my method of trading below.
    The same rule will apply if the BOE suddenly decides to lower the rate, which is very highly unlikely. Should the BOE decrease rates, please look for a short term possible SELL of the GBP/USD pair.

    If our tradable releases are reached, there is a good expectation that the market will move 60-70 pips within 2 spikes in the first 15 minutes, after news release.

    What is it? Why does the market care?
    The Bank of England (BOE) decision on short term interest rate. The decision on where to set interest rates depends mostly on growth outlook and inflation. The primary objective of the central bank is to achieve price stability. High interest rates attract foreigners looking for the best "risk-free" return on their money, which can dramatically increases demand for the nation's currency.

    A higher than expected rate is positive/bullish for the GBP
    A lower than expected rate is negative/bearish for the GBP


    Method I use to trade this:
    Stavro D’Amore Trading Method

    I would recommend spike trading as the best 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.

    I will look for a 30% retrace in the original spike before entering a trade.
    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 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 minute time frame. If my triggers are hit, I will definitely try to run this for over 120 minutes, depending on current market volume and to do this I will look for a choppy volume (if you’re using MT4 you would look for the volume bar tab).

    Should there not be a retrace in the original spike, I will wait for a retrace in the second spike, the time frame I will look at on the charts will be set on 5min.

    Historical Chart and Data UK Interest Rate Decision

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Sep 7, 2011
    Lasted edited by : Sep 8, 2016
  2. ernest02

    ernest02 Private

    Joined:
    May 4, 2011
    Messages:
    26
    Likes Received:
    3
    Why TWO spikes?

    Looking at the EURGBP currency pair there was a spike +- 32 minutes before the announcement were expected.
    Then one minute earlier than the time set for the release 7.00 EDT there was a second spike. Why?

    Looking at the GBPUSD pair there were actually THREE spikes 1) 6:28 EDT 2) 6:59 EDT and 3) 7:10 EDT

    Why?
     
  3. Lee Saunders

    Lee Saunders Recruit

    Joined:
    Jul 27, 2010
    Messages:
    3
    Likes Received:
    0
    I noticed that as well. Maybe the professional traders closed or reduced their short positions prior to the release. That might have created the pre-release spike. That pre-release spike took out my trade, but foolishly I tried to fade it, leaving me exposed to the much bigger news release spike.
     

Share This Page