Forex "Insider" Trading

L

Lobster

Ok. If bad economic data comes out like today at 10 am, the dollar will probably weaken against the Euro. I have been observing the EUR/USD for months now around the release of ISM data or jobless claims or stuff like that. And whenever such a number is a surprise to the downside, the Euro starts to strengthen approximately 15 minutes BEFORE the number comes out.

It is pretty obvious that people who know the number in advance do quite some volume in the forex markets. I'm not sure it's legal, but I am sure they are way past rich. Has anyone heard anything (even rumors) about who those people are and/or how they get their information edge?

In other words, if you want a piece of that pie, how would you go about it?
 
A year ago I used to watch copper and noticed the same thing in regards to economic data. It was never a pre-announcement fade but always a correct positioning build up before the announcement.

My only thoughts were to use it in a corresponding market if it was accurate but i never persued the idea past that.
 
Nice observation! Could be used as a nice leading indicator to position oneself for a trade in equities prior to the release.

How accurate have you found this 'tip off' to be?

MACD
 
I remember 3 years ago to have read that there is a first release 1h before for some professionals. But I didn't archive the article so let's say it can be just a rumour :D

Question: why don't they release news at random hour that would be more fairplay and more fun huh :D.



Quote from Lobster:

Ok. If bad economic data comes out like today at 10 am, the dollar will probably weaken against the Euro. I have been observing the EUR/USD for months now around the release of ISM data or jobless claims or stuff like that. And whenever such a number is a surprise to the downside, the Euro starts to strengthen approximately 15 minutes BEFORE the number comes out.

It is pretty obvious that people who know the number in advance do quite some volume in the forex markets. I'm not sure it's legal, but I am sure they are way past rich. Has anyone heard anything (even rumors) about who those people are and/or how they get their information edge?

In other words, if you want a piece of that pie, how would you go about it?
More...
 
I only followed US data, so I cannot say anything about other data. The problem with reliability as an indicator is the following: If the data is really bad, you virtually always get a rising Euro a few minutes beforehand, but sometimes the Euro also rises before a release which then turns out to be in line or a positive surprise. I guess that's because the Euro has been trending up ever since I have been observing this.

So basically, the only thing you could be almost certain of was that if the dollar did not drop in the minutes before the release, there would not be an overly negative surprise in the numbers.

But now that we are discussing it, this whole effect might already be over and done with. Like everything in (speculative) trading.
 
Might just be Lobster but it doesn't hurt to do a little observation and possible experimentation. More posts like this and less of a lot of the bullshit that flies around ET these days would nice if not helpful.

Thanks again!

MACD
 
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