Jimmy Young Forex Trader Education

May 16 UK Inflation Report; Sold before the news was released

Jimmy — Wed, 16 May 2012 12:02:42 +0000

5:30am Eastern time: Traded the UK inflation report live with my trainees; suggested selling the GBPUSD pair 2 minutes before the news was released. Of course between 5am and 5:28am I explained to them why I thought selling before the release made sense. The reasons included 1) News that the UK monthly unemployment claims were way down just an hour before the inflation report was released and the GBPUSD pair barely budged (should have gone up 40 points at least) clearly showed the Pound was weak at the moment. 2) The DAX was down significantly already on the day and the GBPUSD generally trades in the direction of the DAX 3) The GBPUSD jhas been going down for a couple of weeks and trend (down) is still going 4) The UK inflation report is going to be bad for the Pound and I could think of no reason whatsoever that the report could drive the Pound higher. Bottom line; at 5:28am I told them I thought selling the GBPUSD before the release was the way to go…

May 11 Canada Employment Blows Out Upside For Second Straight Month

Jimmy — Sat, 12 May 2012 10:29:51 +0000

8:30am Eastern Time: Canada employment number was almost double the consensus forecast. The USDCAD pair plummeted 50 points in less than 1 minute on the bullish Canada news. Our strategy for trading this key news release was to allow the USDCAD pair to decline enough to price in the CAD bullish news and then then to consider buying the USDCAD pair for a move back up. Our thinking was if the USD starts to strengthen against the other currencies after the USDCAD pair was pushed much lower by the bullish CAD news, then the USDCAD pair has potential to retrace some of its loses due to USD strength. WE can tell if these conditions are present by looking at the other commodity currency pairs such as AUDUSD and NZDUSD. Turned out these two pairs starting rolling over (trading lower – so USD was strengthening) right after Europe went home and the DOW started to crumble. The DOW/ USD inverse relationship, in this case DOW lower USD higher was probably the root cause of the AUDUSD and NZDUSD going down. Bottom line was we identified a USDCAD buy price when the 1 minute 60sma was breached on the way back up (in other words when the news spike occurs the price of the USDCAD pair becomes much lower than the 1 minute 60sma and when the price goes back above the 1 minute 60sma we see that as a potential buy signal. Doesnt mean we have to buy it at that exact price and time but it alerts us to buy if and when the conditions are right (which means when the USD starts to strengthen – so that usually means when the DAX and or DOW start to weaken). Sounds complicated the first time you hear it. Actually its not. Just a little detailed until you get to know the players, which are 1) news related price adjustment caused by one currency (the news currency) 2) The pair possibly being out of sync with the rest of the pairs (this happens when the news drives the pair in the opposite direction the USD is going) 3) Waiting for a clear signal (1 minute 60sma) and then timing your entry to coincide with a USD move in your favored direction (the direction you are betting on). Hope this helps you to understand a little bit about news related price spikes and you cab possibly profit from them without the stress of that first few minutes when the volatility is high (and a bit scary to the untrained eye).

May 11 GBPAUD Upside done for now?

Jimmy — Fri, 11 May 2012 13:05:41 +0000

Since the low CPI (Aussie dollar negative), the Reserve Bank of Australia (RBA) unexpectedly cut interest rates 1/2% (1/4% was expected) and so that dovish action by the Central Bank caused another spike lower in the AUD currency and increased the current dark cloud around what was the darling (best) of the currencies. This past week Aussie retail sales were much better than the consensus forecast and the payroll number and unemployment rate were much better then the consensus forecast. These 2 recent developments should shift your AUD sentiment from negative to neutral, which means the AUD should no longer be the first currency to jump out at you when you are looking for a weak currency to pair up with a strong currency. For example, since the Bank of England (BOE) minutes on May 18 indicated the UK was going to stop printing new money for awhile (bullish for Pounds), the GBPAUD has gone up more than 500 points. Well the two Aussie bullish developments of the past week should send out a warning signal that the GBPAUD long trade may have run its course (maxed out its gains) for now. Also the May 18th bullish Pound news should be loosing its shine as well (getting old – and traders tend to forget about old news). I hope that helps. Best Jimmy Young

May 9 Aussie payroll surprises to the upside

Jimmy — Thu, 10 May 2012 23:47:01 +0000

9:30pm Eastern Time; Payroll number was significantly higher than the consensus forecast; AUDUSD spiked 50 points higher in minutes

May 6 Aussie retail sales surprise to the upside

Jimmy — Tue, 08 May 2012 04:04:59 +0000

9:30pm Eastern Time; news that the Aussie retail were much better than expected (0,8 versus 0.3 expected) rallied the AUDUSD pair from its lows of the day.

May 6 New French president sends EURUSD plummeting 120 points

Jimmy — Tue, 08 May 2012 04:03:14 +0000

News that the French may be backing away from austerity measures with the election of a new president sent the EURUSD pair tumbling

May 4 US non-farm payroll disappoints

Jimmy — Fri, 04 May 2012 22:36:22 +0000

At 8:30am Eastern Time the US non-farm payroll was 118k versus 170k expected; numbers were bad; upward revision to prior months softened the blow somewhat

May 1 Australia cuts interest rates more than expected

Jimmy — Wed, 02 May 2012 21:35:46 +0000

12:30am Eastern Time: Australia cut interest rates by 0.50%, which was more than the 0.25% expected; AUDUSD declined 100 points on the news

April 25 UK GDP much worse than consensus forecast

Jimmy — Thu, 26 Apr 2012 00:15:42 +0000

At 4:30am Eastern Time the UK quarterly GDP was released. The actual number was -0.2 versus the consensus forecast of a 0.1 increase. The Pound plummeted on the news. GBPUSD promptly dropped 50 points; only to completely recover the loss and more on the back of a weak dollar. The dollar weakness was caused by risk taking strategies related to the triple digit gains in the DAX and DOW. Sounds like a lot but once you have seen this sort of scenario a few times it gets easier to trade profitably. The key was patience to wait until the GBPUSD bottomed out and then buy the pair as it as going back up. This can be done with a simple moving average.

April 24, 2012 Aussie CPI plummets

Jimmy — Wed, 25 Apr 2012 00:36:43 +0000

At 9:30pm Eastern Time the Aussie quarterly CPI was released. The actual number was 0.1%; much less than expected; AUDUSD spiked lower by 62 points in 5 minutes. Makes an interest rate cut at the upcoming Reserve Bank of Australia … Continue reading →