Trading Economic News Releases

[expiated]

This journal is a complete surprise to me, since yesterday I made plans to cease posting ideas about trading given that the design phase with respect to the tools I use has probably come to an almost complete close.

However, while executing trades over the last 24 hours, I noticed the possible emergence of 5- to 15-pip positions that were not a part of my modus operandi in the recent past.

It might be that continued attempts at improving execution when applying the system—of doing a better job interpreting price action based on the relationships existing between the various elements plotted on my charts and the heightened accuracy and detail they offer—is helping me to remain in trades a little bit longer, which in turn kindled the notion just now that the added precision might also enhance trading during the release of economic data.

There was a period when I avoided trading during such times. However, given that my analysis of historical data included all time periods, the behavior of exchange rates during these hours is baked into the system. Since its mechanisms take into account what happens during such intervals, things reached the point some time ago where I was no longer even glancing at the economic calendar before executing my trades.

But, with how the culminating configuration of my charts may be leading me to extend my take-profit targets, I’m thinking that at this time, I might actually want to make a point of trading during news releases.

I feel charts like the one below make it easy to tell in which direction rates are headed, and the lower panel oscillator greatly facilitates the decision-making process on where to enter positions and where to take profit, more-or-less buying when the oscillator spikes below the lower dotted line (or bold rosy brown line), and locking in gains at or above the upper band of the blue and crimson envelope.

Such clarity ought to assist in compiling pips quickly during volatile conditions, and getting out immediately when things turn sour.

Also, because I’m no longer looking to make modifications to any of my indicators or to figure out what should be the basic protocol for implementing the system, I can devote myself fully to just monitoring open positions, setting perhaps 30-pip take profit targets and simply sitting back and watching (while I listen to a podcast or something) until I see exit signs, upon which I will abandon positions manually, whether they occur 2 pips, 10 pips or 30 pips into the trade (or more).

But since none of the economic calendars I know of are set up quite as I would like, I will just record the information here each day, and if $1.00 to $3.00 trades do become a regular thing, I will continue this habit as I deposit much more capital to my trading account (which I will probably begin doing this week or next) so that I can begin increasing the average return per trade.

Otherwise, I will simply discontinue this new additional aspect to my routine and go back to what I’ve been doing.

 

[LanceJ]

I think the market is good at teaching you how to do something that doesn't work anymore.

 

[expiated]

From my perspective, the only real opportunities this morning were counterintuitive—moves opposing the dominant trends—none of which recommended themselves to me. Otherwise, price action has looked relatively haphazard to me throughout the New York session. I therefore had to satisfy myself with capitalizing on six theoretical structure-based trades made via my Binary dot com virtual account, which would have yielded a $128.58 return this morning had I been trading from somewhere such as Uruguay, for example.

As for my live account with OANDA, I judge my best hope for a 10-pip trade as coming from EURAUD, providing it reverses its intraday bias from bullish to bearish to come back into alignment with the day-to-day trend. The next best options, the way I see it, might arise if AUDUSD or NZDUSD make their way back toward central tendency as pressure lightens over the next few hours with the New York session drawing toward its close.

UPDATE: I have now entered a short position with respect to EURAUD, and bought AUDUSD.

 

[expiated]

Of the 15 foreign currency pairs on my watchlist, only EURGBP evidenced a nice clean response to the release of the FOMC Meeting Minutes. Unfortunately, my attention was focused on AUDJPY, AUDUSD, EURAUD, NZDPY and NZDUSD, so I did not notice this opportunity. EURGBP continued to climb the whole hour following the release of the information…

The hour prior to the release of the minutes, I was grocery shopping, but before I left home, I exited AUDUSD with 49ȼ profit (at 18:45) because it wasn’t going anywhere. Also, because EURAUD was so “squirrely” on its way down, I exited and reentered the position three times, and ended up with only 66ȼ as opposed to my goal of $1.00.

When I got back from the market, I found that EURAUD had dropped more than another 10 pips, so it most definitely would have easily reached my original take-profit target had I simply left it alone.

I did not see a response in the market until four minutes after 21:00, when the FOMC Meeting Minutes were scheduled to be released. Because NZDUSD looked more bullish then AUDUSD, I had entered a long position after exiting AUDUSD. But it began heading in the wrong direction at 21:04-05, so I abandoned the position for a -86ȼ loss.

EURAUD climbed way back above where it had been when I sold it the first time, so I sold it again for another 62ȼ profit. I bought NZDJPY at 21:24 when it reentered the adaptive price range envelope (see the arrow below) but this was probably premature.

I should have waited for the lower band(s) to hook upward and for candlesticks to begin painting about the yellow moving average. Or rather than enter there, it would probably have been better to do so when the candlesticks made contact with the upward sloping lower bands—especially given that the candlesticks did not continuing to climb after clearing the moving average, but are beginning to fall back below it instead.

(But this means I made about just as much from pulling the trigger too early as I would have made using perfect timing at the bottom of the envelop!)

Nonetheless, I was okay with this morning’s performance, and therefore transferred another $100 to my trading account so that I’m not as limited in terms of the number of positions I can open at one time.

Still, these trades are not yet above my goal of one dollar, but at least 49ȼ, 66ȼ and 62ȼ are better than the 12ȼ and 20ȼ returns that were making up the bulk of my trades previously (as of late).

 

[expiated]

This USDCHF trade is the first one to really accomplish what I had in mind, but I have not yet figured out how to replicate it,

and it had little to do with the release of economic data as far as I can see.

 

[expiated]

I have not yet figured out how to replicate it.

NOTE: Look into the possibility of entering positions when the blue baseline moving average on the 5-Minute Slope Chart is angled in one direction and the black lower-panel oscillator is spiking in the other

Note also that USDCHF's day-to-day trend has been bearish for some time now, and at the start of the day, the pair's rate was already in the upper region of the projected day range...

(Watch EURUSD, GBPJPY and especially GBPUSD for a possible reversal north over the next 12 hours.)

 

[expiated]

NOTE: Look into the possibility of entering positions when the blue baseline moving average on the 5-Minute Slope Chart is angled in one direction and the black lower-panel oscillator is spiking in the other.

Note that your recent observation stating that the "TUBE" rules in terms of revealing in which direction rates are genuinely headed should always be kept in mind.

Moreover, the indigo moving average you transferred from the five-minute "close" setup and added to the five-minute "distance from the blue line" configuration turns out to be more accurate than all the existing moving averages for conveying where rates are headed at the moment with the exception of the orange MA, but it is not as susceptible to the kind of misleading fluctuations that are evidenced by the orange moving average.

All of the remaining moving averages (with the exception of the green one) are deemed to suggest where rates are ultimately headed in the long run. So with the above in mind (regarding the blue baseline moving average and the black lower-panel oscillator) it would be reasonable to expect of find success by entering positions as the candlesticks switch from forming on the side of the orange and purple moving averages opposite all the others to the side of the orange and purple moving averages coinciding with all the others.

The following cluster of trades were just made based on the above hypothesis. The second and third contracts were purchased when the first and second looked as if they were not going to follow through on the initial signs of a reversal in a timely fashion...

(The open position in your OANDA live trading account has not yet paid off.)

So then, in addition to the binary option returns being much more substantial, the payoffs can also be much faster.

 

[expiated]

(Watch EURUSD, GBPJPY and especially GBPUSD for a possible reversal north over the next 12 hours.)

Base on everything from Post #7 and expecting to see GBPJPY, EURUSD and GBPUSD turn north, had I been awake, this would seem to have been the right time to buy one of those pairs for about a 60-pip gain...

 

[expiated]

Thursday / August 20, 2020 / 9:50 AM PST

At 125.47, EURJPY looks like a nice candidate for this strategy...

I've set my take-profit target for 125.25.

 

[expiated]

At 125.47, EURJPY looks like a nice candidate for this strategy...

I'm bailing with just 7 pips (approximately) given that virtually all momentum has left the market and EURJPY has hit a level of statistical support at this time where it is likely to pull back for a spell.

Nonetheless, 66ȼ (and 97ȼ from GBPUSD) is still better than the 12ȼ or 24ȼ characteristic of the style of trading I was using in the recent past—though it can't even begin to touch the likes of $35.83 per contract from the sort of binary option trades above.