Press review - page 86
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Trading the News: New Zealand Employment Change (based on dailyfx article)
Job growth in New Zealand is expected to expand another 0.6% during the third-quarter, and a marked pickup in employment may spark a near-term rally in the NZDUSD as it puts increased pressure on the Reserve Bank of New Zealand (RBNZ) to normalize monetary policy.
What’s Expected:
Why Is This Event Important:
There’s growing bets that the RBNZ will raise the benchmark interest rate at the March 12 meeting as the region faces a heightening risk for an asset-bubble, and Governor Graeme Wheeler may introduce a series of rate hikes in 2014 as the economic recovery continues to gather pace.
Bullish NZD Trade: Employment Rises 0.6% or Greater
- Need green, five-minute candle following the release for a potential bullish NZDUSD trade
- If market reaction favors a long trade, buy NZDUSD with two separate position
- Set stop at the near-by swing low/reasonable distance from entry; need at least 1:1 risk-to-reward
- Move stop to breakeven on remaining position once initial target is met, set reasonable limit
Bearish NZD Trade: New Zealand Job Growth Disappoints2013-02-04 21:45 GMT (or 22:45 MQ MT5 time) | [NZD - Unemployment Rate]
if actual < forecast = good for currency (for NZD in our case)
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New Zealand Unemployment Rate 6.0% In Q4The jobless rate in New Zealand was 6.0 percent in the fourth quarter of 2013, Statistics New Zealand said on Wednesday.
That was in line with expectations and down from 6.2 percent in the third quarter.
"We're seeing strength across the labor market, particularly in the industries that provide services," industry and labor statistics manager Diane Ramsay said. "The unemployment rate has been falling and employment rising for the last 18 months, with both now at levels last seen in early 2009."
Stocks Have Experienced A Major Technical Breakdown Today: Charts (based on forbes article)
Key technical levels have been broken in the U.S. and Japanese stock markets, making further declines likely.
The Dow :
Nasdaq composite index :
SP500 index :
Nikkei stock index :
I did not find yearly pivot points indicator in MT5 CodeBase sorry (if someone knows MT5 indicator so let me know please).
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How to Trade GBPUSD Forex Yearly Pivot Points (based on dailyfx article)
But you may be asking, “Why should we look at yearly pivots?” It is a great question. In technical analysis, the longer the timeframe, the more statistically reliable the trendline, support and resistance level becomes as more data has gone into producing each point. This greater reliability added to the large moves that happen after a bounce and a break make these levels attractive buy and sell zones for Forex traders.
2013-02-05 09:30 GMT (or 10:30 MQ MT5 time) | [GBP - Services PMI]
if actual > forecast = good for currency (for GBP in our case)
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U.K. services PMI falls to 7-month low of 58.3 in January
Service sector activity in the U.K. expanded at the slowest pace in seven months in January, dampening optimism over the country’s economic outlook, industry data showed on Wednesday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index fell to 58.3 last month from a reading of 58.8 in December. Analysts had expected the index to inch up to 59.0 in January.
How to Build and Trade a Trend-Following Strategy (adapted from dailyfx article)
Trend Trading
Of the three possible market conditions, trends are probably the most popular amongst traders; and the reason for that is what we had alluded to a little earlier.
The future is opaque, and price movements are unpredictable. By simply recognizing a trend, the trader has noticed a bias that has shown itself in the marketplace. Maybe there is improving fundamental data for that economy; or perhaps it’s a central-bank driven move on the back of ‘Yen-tervention’ or another round of QE.
Whatever the reason, a bias exists in the market and that’s visible from the trajectory on the chart. The alluring part of this is that if that bias continues, the trader might be able to jump on the trend, and let the market do the heavy lifting of moving the position into profitable territory.
Another attractive aspect of trading with trends is that the speculator can look to employ the age-old logic of ‘buy-low, sell-high.’ It’s not enough to simply buy an up-trend, or to sell a down-trend. Traders are often best served by waiting for the up-trend to pull back before buying (or waiting for a down-trend to rip higher before selling), in an effort to enter the position as cheaply as possible.
How to Build a Trend Strategy
Many of the most popular indicators can be helpful when designing a trend strategy. And to take technical analysis a step further when designing a trend-trading approach, many traders will look to utilize multiple time frame analysis in order to get multiple looks at a trending market.
When utilizing multiple time frame analysis with a trend-trading strategy, traders are often going to look to the longer time frame to find and diagnose the strength of the trend. This can be done in a multitude of ways. Some traders will prefer to do this without any indicators at all, using price and price alone.
Other traders will look to one of the more common indicators, the moving average. There are a lot of different flavors and types of moving averages, but the goal is all the same – to show us a ‘line-in-the-sand’ as to whether price movements are ‘above-average’ or ‘below-average’ for a given period of time.
After the trend has been diagnosed, the trader can then plot the entry into the position; and for that, there are a multitude of options available.
Entering into the Trend
There is an old saying that goes: ‘The Trend is your friend… until it ends.’
This one line pretty much sums up the quandary that traders are faced with when trading trends. While a bias has been exhibited in the marketplace, and may continue; there is no such thing as a ‘sure-fire trend continuation setup.’
So, when the trend doesn’t continue, the trader is often advised to look to mitigate the loss so that a reversal doesn’t damage their trading account too badly.
In an effort to be as precise as possible, many traders will move down to a lower time frame in an effort to get a more detailed look at the move inside of the larger-term trend.
Traders can also look to use indicators to plot an entry, under the premise that the longer-term trend may be at the early stages of its continuation; and can be entered upon with the shorter-term chart.
There are numerous indicator options for this premise. Many traders will look to oscillators such as RSI or MACD to trigger the position. Other popular options are MACD, Stochastics, CCI, and the moving average crossover.
Traders looking to speculate with the trend want to focus ONLY on signals that move in that direction.
Types of Trend-Trading Strategies
The future is unknown; and nobody has a crystal ball that will magically foretell tomorrow’s price movements. But the fact of the matter is that biases do exist, trends do take place (for a reason), and in many cases those trends may continue.
If traders want a more objective way of trading with trends, they can look to implement an indicator like RSI to trigger the position after the trend has been graded on the longer-term chart with Price Action.
Traders looking to use indicator-based strategies can take this a step further with the logic utilized in my ‘fingertrap’ scalping strategy. In such the strategy, moving averages are used to grade the trend on a longer time frame, and a moving average/price action crossover on the shorter time frame is used to trigger in the direction of the trend. While this is designed as a scalping strategy, traders can certainly swap out the time frames to make the logic of the strategy operable on a longer-term basis.
2013-02-06 00:30 GMT (or 01:30 MQ MT5 time) | [AUD - Retail Sales]
if actual > forecast = good for currency (for AUD in our case)
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Australia Retail Sales Gain 0.5% In December
The total value of retail sales in Australia climbed a seasonally adjusted 0.5 percent on month in December, the Australian Bureau of Statistics said on Thursday - standing at A$22.581 billion.
The headline figure matched forecasts, although it slowed from the 0.7 percent gain in November.
Among the individual components, sales in food retailing gained 2.5 percent, along with cafes, restaurants and takeaway food services (0.5 percent) and department stores (0.3 percent).
2013-02-06 00:30 GMT (or 01:30 MQ MT5 time) | [AUD - Trade Balance]
if actual > forecast = good for currency (for AUD in our case)
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Australia December Trade Surplus A$468 Million
Australia posted a seasonally adjusted merchandise trade surplus of A$468 million in December, the Australian Bureau of Statistics said on Thursday.
That blew away forecasts for a deficit of A$200 million following the upwardly revised surplus of A$83 million in November (originally reported as a deficit of A$118 million).
Trading the News: European Central Bank Interest Rate Decision (based on dailyfx article)
According to a Bloomberg News survey, 62 of the 66 economists polled see the European Central Bank (ECB) largely maintaining its current policy this month, but the broad range of expectations (rate cut, negative deposit rates, verbal intervention, non-standard measures) may produce increased volatility around the event as market participants weigh the outlook for monetary policy.
What’s Expected:
Time of release: 02/06/2014 12:45 GMT, 7:45 EST
Primary Pair Impact: EURUSD
Expected: 0.25%
Previous: 0.25%
Forecast: 0.25%
Why Is This Event Important:
Indeed, the ECB remains poised to further embark on its easing cycle amid the heightening threat for deflation, while central bank President Mario Draghi may look to verbally weaken the single currency in an effort to further insulate the monetary union.
How To Trade This Event Risk
Trading the ECB interest rate decision may not be as clear cut as some of our other trade setups as the press conference with President Draghi ends with a Q&A session
Bearish EUR Trade: ECB Loosens Policy and/or Publishes Detailed Easing Timeline
- Need red, five-minute candle following the decision/statement to consider a short Euro trade
- If market reaction favors a short trade, sell EURUSD with two separate position
- Set stop at the near-by swing high/reasonable distance from cost; at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is met, set reasonable limit
Bullish EUR Trade: Governing Council Highlights Neutral PolicyEURUSD M5 : 15 pips price movement by EUR - Interest Rate news event :
EURUSD M5 : 146 pips price movement by EUR - Interest Rate :
Potential Price Targets For The Rate Decision
2013-02-06 08:00 GMT (or 09:00 MQ MT5 time) | [GBP - Halifax HPI]
if actual > forecast = good for currency (for GBP in our case)
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U.K. Halifax HPI 1.1% vs. 1.0% forecast
The UK.’s Halifax house price index rose more-than-expected last month, industry data showed on Thursday.
In a report, HBOS said that U.K. Halifax HPI rose to a seasonally adjusted 1.1%, from -0.5% in the preceding month whose figure was revised up from -0.6%.
Analysts had expected U.K. Halifax HPI to rise 1.0% last month.
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Halifax HPI is measuring the changes in the price of homes financed by Halifax Bank of Scotland (HBOS). It's a leading indicator of the housing industry's health because rising house prices attract investors and spur industry activity (source - FF forum calendar description)