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Predicting direction of economic releases

  • #101
  • Sep 19, 2006 5:30pm Sep 19, 2006 5:30pm
You're right on...I like to trade the seconds the news is out and go with the flow
I'm only a bird in a gilded cage
  • #102
  • Sep 19, 2006 6:24pm Sep 19, 2006 6:24pm
Same here. Just hop on the momentum wagon until your there!
-The Drizzle
  • #103
  • Sep 22, 2006 4:41pm Sep 22, 2006 4:41pm
Trading economic announcements based on fundamental information....now that's what I call news!!!

Many "newstraders" employ the technique described by ngdaniel. As he suggests, you simply pay attention to the economic and perhaps political context then trade accordingly. It was July 2006 when I told everyone the fed was done and explained why (based on fundamental analysis).

As far as actual trading is concerned, ngdaniel is again correct: you make your money in two-five minutes and get out. There's an infamous quote in FF about some guy who makes more money in five minutes than most people make in a year.

Personally, I enjoy straddling the news, but I do believe an astute trader can win more often than not by taking a position (long or short) prior to the trade. I've done it and with modest success.

Merlin's point is well taken, as the proof is in the pudding. While I've mentioned my losses from time-to-time, for me I find posting financial wins rather "tacky", and unproductive, but then again I'm not writing a book (yet). Besides that, the amounts would probably flood some readers with fits and bouts of depression.

Just random information; not a specific recommendation.
  • #104
  • Sep 22, 2006 4:51pm Sep 22, 2006 4:51pm
I still do not understand what the difference is between what is discussed here... and looking to the analysts such as Deutsche Bank, UBS, JP etc for their expectations 1 week before the report comes out: The Forecast.

If the forecast is 0.1% (official bankers forecasts), previous is 0.8% and the number comes out 0.2%.... all of the research in the world prior to the report would say that the number was coming out lower than before. DUH! But it still came out above forecast right??? The market spikes the direction opposite of the one you took because you were counting on it being lower.


I must be a complete idiot because I just dont get it.


What I can understand is looking a week ahead of time and analyzing what the banks anticipate the numbers will do and trade accordingly. For instance... right when the forecast is released on Bloomberg for the NFP, often 10, 14 days or whatever it is before the report... you may want to take that into consideration when you are trading USD pairs.

I must be missing something. 5 minutes before the report comes out sounds like a coin flip.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #105
  • Edited 9:51am Sep 30, 2006 8:11am | Edited 9:51am
Quoting ngdaniel
NewstraderFX,

Now that is a wonderful analysis.

I trade for the initial expectations spike and then I am out of the trade. It is the 12-15 pips I am after. I've seen more but if it backs up by 5 pips during the initial movement, I close the trade.

My expectations per day is 10 pips.

For now, it is too early to tell since announcements are coming before the US PPI. I'm planning to trade the US TIC Report. I just can't understand why it is labelled in yellow on the calendar. I've seen an initial jump of 30 pips on the first spike alone.
ngdaniel

It is a pleasure for me to read about your style of trading. I have been trading in this style since September 2003. I stopped Demo trading March 2006. One of my BEST money making opportunties is NFP day. That being in most cases the first Friday of each month. Here is how I trade the Non Farm Payroll numbers.

I only purchase my position at 8:28 AM EST. If you do a review of the last 3 years of releases. I have actually traded EVERY ONE of these releases. You will note that in most instances at about 8:28 AM EST there is a SPIKE down. Sometimes as much as 50 PIPS. I enter my position with a simultaneous Stop Loss of 50 PIPS. Almost 90% of the time the guess on the number is wrong. I usually am closer than most on the number. My main source of information on this number is 4Cast. I subscribe to their service. The month that ADP came out with their INSANE guess of 368,000 NFP, 4Cast was the only news analysis source that pointed out that ADP was using the 5 week period in this one case that the numbers were way off. In fact that month 4Cast was the closest to the number.

The way I traded that number was to anticipate it being UNDER big time. In fact one of the Big Houses raised their number from under 200,000 to over 200,000, the same day ADP came out with the 368,000 number.

I also entered a LIMIT OUT on my Positions and I got an immediate profit of over 50 PIPS. Thirty minutes later the EUR/USD was back at the price before the release. I was out in the first 15 minutes with a profit.

The reason that it goes back is INTERVENTION.

Another way that I play this once a month opportunity is to keep raising my stops about 10 PIPS under as it goes up until it reverses and I get stopped out with a locked in profit.

My sense of the number for the first Friday in October is that the NFP number will be UNDER the CONSENSUS number. I still need to do more research a few days before but as of now that is my sense of things in a slowing economy. One thing I will use in my call is Monday's ISM number.

This great site explains without the SPIN so it is more than objective. Good Trading and it is great to read your posts here on this Thread.

BWM
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  • #106
  • Sep 30, 2006 8:20am Sep 30, 2006 8:20am
Quoting merlin
daniel, if you are "writing a book", dont you think it would sell more copies if you proved your abilities, live in front of everyone? if you make 30 live calls, and end up with a 75% win rate, i will be the biggest proponent for you, and i will personally learn how to trade your method. there is nothing about the methodology itself that makes me think it is valid. with this particular method, only the results can show validity. so witbut without the proof, like i said, its just a nother claim in a big ugly sea of claims.
merlin

With RESPECT to you and your comments. Why does ngdaniel need to prove anything to you or anyone else here. Is he selling you anything...

This question is meant to understand your thinking on this subject. I am trying to learn and understand from you on this point of yours.

Thank You...

BWM
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  • #107
  • Sep 30, 2006 8:31am Sep 30, 2006 8:31am
Quoting NewstraderFX
It isn't too hard to predict how many of these reports will come out...the tricky part is to evaluate what a currency is worth given a particular piece of information...it's like buying anything else...when u go to McDonald's you have an idea of what the cost, or value is, as opposed to when you go to a good steak house.

For example, what will the EUR be worth vs the $ if it is known that the Fed will not increase the rate? Looking at the currency's previous values can give you a clue. MAny times you can see that the value has been "priced in" if you've been watching it during the time between the last important announcement and the present announcement. Also the recent highs and lows. The Eur/USD opened at about 2650 this week. There has been some movement this week, but at this time it's sitting at about 2675. This is where it settled a few hours after the PPI report. Just before the PPI report, the pair was at about 2660. The highest it got after the PPI was around 2720. Perhaps we can say that the value of the PPI report, which came out a bit better then consensus, was about 50-60 pips.

What will be the value of the pair if the rate does not change? In my opinion, if the value of an in consensus PPI is around 50-60 pips, the value of the rate not changing is at least that and probably 20-30 pips more. Now, couple that value, with the likelyhood that traders will also factor in that the rate is not very likely to rise any more this year. That will add additional value, perhaps another 20-30. Another factor that may be added in, is that some traders will take into account that there will actually be a decrease in early to mid 2007, which is what will happen if the numbers continue to trend as they have been. This value to me is an x factor, but obviously it will be dollar negative. Throw in some more for the overall frenzy that will be occuring in the market as traders look to get into the position as they see the pair going up. In my mind an 80-100 pip rise after the announcement is certainly not out of the question...

The most important thing is to decide, is if all of this has been priced in already, i.e. the value of the currency pair relative to the trade. Let's use the opening value of the EUR this week, with today's NY closing value-say about 2660. What I am hoping for is that the EUR will be close to this level just before the rate announcement, because at this level, the value of the rate announcement has not been priced in, in my opinion. If it's sitting up around 2760-70, well then alot of the value has already been priced out of the trade and any upward spike that occurs will likely be followed by a rapid move down. Of course, in this instance, there is still an x factor-the value of the trade if there are traders in the market who believe that rates will decrease in early to mid 2007. That may be worth a lot, but lets leave it out for now. You can add it in later if you are in a profitable position and want to stay there.

So lets get conservative-109/109 economists surveyed by bloomberg say there is no chance of a rate increase, including well-respected columnist John Berry. At a minimum, conservative figure, this report should generate an immediate spike of 30-40 pips. I'm going to trade it like this: Buy EUR before the announcement and make a sell entry order, just for protection. If I have a profit and it starts to retrace by 20-25%, i'll close. Ultimately, i do believe that the other values will play into the report so i will watch it. After the re-trace, if there is one...i'll let it get back up to the point i sold it...then buy again. Overall, there is a vast potential for this trade, due to the x factor, which hasn't been there for several years obviously, as the rate was increased 17 straight times and no one was thinking about rate decreases. When does the x factor kick in? Hard to say, but if it breaks the psychological barrier of 2800...the sky could be the limit. Good luck

NewstraderFX
NewstraderFX

The one thing that I discovered when I first started Demo trading in September 2003 was that ALL the mainstream sources with perhaps one or two exceptions make calls based on incorrect perceptions of the FX market. To start their DATA is wrong. Therefore how can they be right more than 50% of the time...

Bottom Line...Garbage In = Garbage Out !!!
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  • #108
  • Sep 30, 2006 9:03am Sep 30, 2006 9:03am
Quoting MoneyMa$ter
Trading economic announcements based on fundamental information....now that's what I call news!!!

Many "newstraders" employ the technique described by ngdaniel. As he suggests, you simply pay attention to the economic and perhaps political context then trade accordingly. It was July 2006 when I told everyone the fed was done and explained why (based on fundamental analysis).

As far as actual trading is concerned, ngdaniel is again correct: you make your money in two-five minutes and get out. There's an infamous quote in FF about some guy who makes more money in five minutes than most people make in a year.

Personally, I enjoy straddling the news, but I do believe an astute trader can win more often than not by taking a position (long or short) prior to the trade. I've done it and with modest success.

Merlin's point is well taken, as the proof is in the pudding. While I've mentioned my losses from time-to-time, for me I find posting financial wins rather "tacky", and unproductive, but then again I'm not writing a book (yet). Besides that, the amounts would probably flood some readers with fits and bouts of depression.

Just random information; not a specific recommendation.
MoneyMa$ter

I enjoyed your signature...

Thank You
{Promotion Removed}
  • #109
  • Sep 30, 2006 10:52am Sep 30, 2006 10:52am
Obviously, I'm vey interested in newstrading and have basically been a straddler. The one time I took a position prior to the news was the Aug NFP-here in NY a writer in the Post claimed the # would be lower due to a statistical anomoly and he turned out to be correct.

This is a suggestion for actually placing the trades and I would especially appreciate a response from ngdaniel although others are welcome.

I agree totally with what ng has said, but why not play the trade this way:

Use your best judgement and take a position prior to the news. At the same time, place an entry order the opposite way for 2x the amount of lots of your open position, perhaps 10-15 pips away from where the open position is. If the news comes out against you-the entry will stop out the original position and get you in going the other way.

For example:
1. You buy 1 lot of EURO @ 2800
2. You have a sell entry for 2 lots of EURO @ 2785 with a stop at say 2800

Opinions please?
  • #110
  • Sep 30, 2006 11:19am Sep 30, 2006 11:19am
Quoting Warren Forex

<TABLE class=GenericReport cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD class=oddrow>02-Oct-2006</TD><TD class=oddrow>14:00</TD><TD class=oddrow>ISM Manufacturing (US)</TD><TD class=oddrow>Sep</TD><TD class=oddrow>53.5</TD><TD class=oddrow>54.5</TD></TR></TBODY></TABLE><TABLE class=GenericReport cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD class=oddrow></TD><TD class=oddrow></TD><TD class=oddrow></TD><TD class=oddrow></TD><TD class=oddrow></TD><TD class=oddrow></TD></TR></TBODY></TABLE>
Now we have Prior at 54.5 and Consensus at 53.5


Here is how the GAME is Played.

If the number is over expectations the EUR/USD goes down.
(INSTANT REACTION)

If the number is under expectations the EUR/USD goes up.
I understand how news trading works. Though what I dont understand is how one can successfully predict as to whether a number such as stated would be 53.4 or 53.6? One number would have sell bias, the other buy bias. Thus you could be just .2 off with YOUR prediction but you will be on the wrong side of the spike. I realize that you are likely not predicting a number... just going by whether or not it has a better CHANCE of being lower than consensus than higher than consensus. Though if you are not skilled with TA analysis you are walking on some thin ice. People panic easily when they are down 40 pips in 2 minutes and have no clue where the market is going.

All this system seems like to me is just a maximize gains and minimze loss. This can happen by choosing a position and using a stoploss or as newstraderfx stated... straddle with a order on the other side in case it goes against you. You would obviously need a good broker for this type of trading. Again I am sure I am missing something.

Also, did you not read the forum rules? You cant promote multiple sites such as you are without being a member with 50 or more posts. Seems like all you are doing is relentlessly promoting your buddies sites no?

Why dont you do this... come here and give the predictions for the economic releases. Just the big ones for next week... then I will be a believer. Because right when people started trying to get NGDaniel to post some predictions consistantly to build a track record the guy ran out on his own thread. Just my thought...
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #111
  • Sep 30, 2006 11:37am Sep 30, 2006 11:37am
Quoting jswanson
Something I have done in the past with decent success is take the previous releases for a currency and if they are surprising economists to the downside expect the trend to continue on the following releases. It really seems to work.
See that is what does make sense. It is exactly what happened with New Zealand releases the last couple of weeks. Consistantly worse than expectations. Those are clear moments that it would be realistic to "predict" releases.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #112
  • Sep 30, 2006 1:23pm Sep 30, 2006 1:23pm
Quoting StockKJay
I understand how news trading works. Though what I dont understand is how one can successfully predict as to whether a number such as stated would be 53.4 or 53.6? One number would have sell bias, the other buy bias. Thus you could be just .2 off with YOUR prediction but you will be on the wrong side of the spike. I realize that you are likely not predicting a number... just going by whether or not it has a better CHANCE of being lower than consensus than higher than consensus. Though if you are not skilled with TA analysis you are walking on some thin ice. People panic easily when they are down 40 pips in 2 minutes and have no clue where the market is going.

All this system seems like to me is just a maximize gains and minimze loss. This can happen by choosing a position and using a stoploss or as newstraderfx stated... straddle with a order on the other side in case it goes against you. You would obviously need a good broker for this type of trading. Again I am sure I am missing something.

Also, did you not read the forum rules? You cant promote multiple sites such as you are without being a member with 50 or more posts. Seems like all you are doing is relentlessly promoting your buddies sites no?

Why dont you do this... come here and give the predictions for the economic releases. Just the big ones for next week... then I will be a believer. Because right when people started trying to get NGDaniel to post some predictions consistantly to build a track record the guy ran out on his own thread. Just my thought...
First of all, it is not my buddies site and I am not promoting anything here. I honestly was trying to help. As for my posting here I am not familiar with all the rules so if I did something wrong I apologize to the management of Forex Factory.

My first call is that the ISM will be under the Consenus. The job part of the ISM number will help me call the NFP number on Friday. My early call is it will be bad. The ECB raises .25 on the 5TH of October.

Thank you for your comments and your request.

BWM
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  • #113
  • Sep 30, 2006 1:50pm Sep 30, 2006 1:50pm
Quoting Warren Forex
First of all, it is not my buddies site and I am not promoting anything here. I honestly was trying to help. As for my posting here I am not familiar with all the rules so if I did something wrong I apologize to the management of Forex Factory.

My first call is that the ISM will be under the Consenus. The job part of the ISM number will help me call the NFP number on Friday. My early call is it will be bad. The ECB raises .25 on the 5TH of October.

Thank you for your comments and your request.

BWM
Okay, thanks for your response. I will follow your calls with hightened anticipation. And thank you for your attempt to help.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #114
  • Sep 30, 2006 2:07pm Sep 30, 2006 2:07pm
BWM stepping up to the plate. That is really cool, man. I'll be watching too. I assume you have an objective system or is it more subjective regarding listening to the news and current events combined with economic trends? Perhaps you could start a new thread and get rid of all the back and forth from this thread...? I'm very interested in your approach.
Thanks for the heads up on ISM I'll be watching while trading in real time with autoclick.
Trade well.
  • #115
  • Edited 8:26pm Sep 30, 2006 8:25pm | Edited 8:26pm
Quoting Warren Forex
MoneyMa$ter

I enjoyed your signature...

Thank You
If you enjoyed my signature, and the quote that followed, then you enjoy the truth.

Truth is, it would be just peachy-keen if you started your own thread Warren, under your name. Traders wouldl benefit from full disclosure, knowing it's you in advance and then deciding whether to come to your thread. I expected reasoned strategies and information on news predictions but got you instead. With you here I can accurately predict what will happen to this thread.

Thank you so much.
  • #116
  • Oct 2, 2006 2:40pm Oct 2, 2006 2:40pm
Hey Warren Forex,

I agree with Money Master, this thread has been so much about hide and seek, lots of information, not one concrete enough to change one's mind or form an opinion, you seem to bring completely fresh air to the room and I for one would like to see your own thread where things are straightened out from your side and others don't confuse it with "a lot of nothing". I don't care if your predictions are right or wrong this week as long as they are based on sound reasoning and I think you are on the right track.

Welcome to FF and thanks for showing the courage many others don't have.

Kazi
  • #117
  • Oct 2, 2006 6:56pm Oct 2, 2006 6:56pm
Quoting StockKJay
Why dont you do this... come here and give the predictions for the economic releases. Just the big ones for next week... then I will be a believer. Because right when people started trying to get NGDaniel to post some predictions consistantly to build a track record the guy ran out on his own thread. Just my thought...


First, I didn't run out on this thread. This thread belongs to FF.

Second, Not that it is any of your concern, I have a personal health matter that needs attention. I've halted my trading activities for now.

Third, my information are not predictions. The market direction is presented to anyone who will listen. Read, watch and listen to financial news. I watch CNBC's Squawk Box every morning when I am expecting an economic release. If the news is unsure, I don't trade the economic release.
  • #118
  • Oct 2, 2006 9:43pm Oct 2, 2006 9:43pm
what you mean by sales presentation
  • #119
  • Oct 3, 2006 6:32am Oct 3, 2006 6:32am
Quoting superforex
what you mean by sales presentation
What posting are you referring to?
  • #120
  • Edited Oct 4, 2006 4:53am Oct 3, 2006 7:33am | Edited Oct 4, 2006 4:53am
it was a spam post must have been deleted by the moderater


ps
i see warren gone back to oanda as "victoria secrect" as 20 year old girl. now his account size is $50000.
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