Predicting target price?????? 4 replies
Predicting The News 54 replies
Predicting the news 0 replies
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.Ignored
Dislikeddaniel, 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.Ignored
DislikedIt 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
DislikedTrading 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.Ignored
<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.
If the number is under expectations the EUR/USD goes up.
DislikedSomething 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.Ignored
DislikedI 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...Ignored
DislikedFirst 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.
I enjoyed your signature...
DislikedWhy 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...Ignored