Chicago PMI - 30th March 2007 - Crumbs

A small move combined with a bit of a slip. It turns out that Oanda filled better than my other platforms, this is very rare. Once in awhile Oanda just gives an incredible fill, the majority of the time they practice daylight robbery with their spread widening during the news.

This indicator is created by surveying Purchase Managers in the Chicago area, which is a key manufacturing part of the USA. Click here for a link to more info about this economic indicator.
Anyhow the news was suppose to come out at 9:45 am EST but the number gets released to a special group of paid subscribers 3 minutes earlier, my service get the number from this group. The expected number was 49.5 and a deviation of +1.5 was the trigger to sell GBPUSD and -1.7 was the trigger to buy. The number was much higher at 61.5 and I sold...the market dropped about 10 pips and not much else, I waited for a reaction 3 minutes later from the main market...not much.

I managed to get out with a couple of pips...the market was volitile and the spreadbetting platform changed the price when I exited, so I lost a little bit. Soon after a tape bomb hit the market about a possible us sanction against china, and the GBPUSD moved up. Charts are below, you can see how small the move was compared to the tape bomb that hit soon after.

US Durable Good ex Transport - 28th March 2007 - Follow thru

This was a risky report to trade as it can spike and then whipsaw the other way so I was please to pull alittle profit out of it. However the new Currenex platform I was using slipped me a full 35 pips from the pre-release price and the price where the mystery broker and and spreadbetting platform got me in. I did however hang in and eventual exited out of the position on Currenex with about 5 pips. Quite a turn around from the fill early in the day on UK GDP. It could have something to do with the banks which feed the Currenex provider.

Durable goods measures the value of orders for a basket of products, this indicator strips out the transport segment, which can be very volatile and distort the underlying picture of the economy it provides. Click here to read about this economic indicator. The number was expected at 1.8% and I was looking for a deviation of +2.2 to sell cable, and -1.8 to buy cable....a negative reading was bad for the dollar and the GBPUSD goes up. I also was looking to trade a larger position if the deviation was an addition 0.3% more than the mentioned triggers.

I exited my whole postion on the mystery broker very early, actually only 11 seconds after I entered. As you can see there was a retrace after the inital spike and then the price moved further. I held the spreadbet trade for about a minute and got out at a better price. As mentioned my trade on the Currenex platform was filled @ 1.9675, and was instantly a -25 pip loss, I didn't even see the initial spike go to that prices, so liquidity must have been thin and my market order didn't find any until there. I sat nervously as it gradually went up and down as markets do, it scrapped the 70s and then pulled back to 55s and I wondered why I didn't get out. I was lucky, eventually it continued back up, I have seen Durable good spike in one direction and then whipsaw and spike in the other direction in the next second. Perhaps there are some limits I can use to avoid this happening but for now I will stick to other platforms. Here's the chart of the price action during the trade.

UK GDP - 28th March 2007 - Continuation

Another news indicator with enough deviation from expectation to trade. After Tuesday's no trade on US Consumer Confidence this was a great gift, also my mystery broker is filling me. Also my first time using Currenex for a news trade, there is the danger of trading to many accounts at once, especially if something happens like a revision or other news reports coming out at the same time. For this reason I have been trading with a smaller position usually just 1 or 2 lots, this has meant that my gains have been less than last week when I was trading up to 6 lots per trade. It is the balance between more precise news trading and doing broker research, which I think will pay dividends later on.

When the trade hit the initial spike and retraced some, because I was in with positions on 3 brokers, I closed some of my trades early, so I could focus on the remaining ones. I bit like scaling out of a trade, where you sell half and leave the rest on to run for more pips. The move did turn around and continue so I didn't achieve maximum potential on every broker. I closed the IGIndex first because it seems the slowest to execute, then got out of Currenex where I was trading GBPJPY, after doing this the price turned around and moved south. I did catch this further move on the mystery broker trading GBPUSD and faded out of the trade.

The UK GDP for 2006 Q4 was expected 0.8%, but came out at 0.7% , a 0.1% deviation was enough to move the market. It wasn't a huge move, about 35 pips, but I will take it. Click here to read more about this report

Here is the GBPUSD chart with the mystery broker and the IGIndex trade.

and here is the GBPJPY chart with my Currenex fill, currenex prices in the currency that is bought or sold, it is real thing.

US New Home Sales - 26th March 07 - New week more good news trades

A good start to the week, and a continuation of last weeks winning streak, this now makes 5 successful tradable news indicators in a row. Often you will get a report which doesn't deviate from the expected number enough to produce a good tradable move, so this is all very good. Unfortunately I did have a bit of broker trouble. As on friday my mystery broker didn't fill me on the US Existing Homes report, actually my broker gets liquidity from Forex Liquidity, who provide a few brokers and the word is that they tag accounts when you do too well. I have been anticipated this and have been doing a bit of research on the side and have been placing trades on a few brokers at once. I have found I am getting decent fills from a UK based spreadbetting firm, which means my profits are tax-free. I also have setup a new account with Currenex, which is about as close to the top of the food chain that you can get as a retail forex trader. Unfortunately the Currenex platform is a bit complex and I didn't have my orders set right so didn't get in on the trade. I got a bit of pre-news jitters and decided not to trade with good old trusty Oanda as well as I thought in the heat of the moment it might be difficult to control multiple trading platforms. At least I got filled at the spreadbetting broker, only a measly £3 per pip, so I only actually got about one-tenth of what I normally would have if using my usual lot sizes with a regular Spot FX broker.

Anyhow the New Homes report has become more important recently with the US housing market in trouble and the shakeup in the sub-prime mortgage sector. New Homes is a better gauge than Friday's Existing Homes report for measuring this, because if they are being built it also means people are being employed, materials are being used, etc. The number was expected at around 985-990k and the number came out at 848k, a full 137k below the expected number. This was very bearish for the dollar and the GBPUSD instantly appreciated from about 1.9665 to 1.9690, after stalling for awhile there it then broke out to 1.9700, retraced back down to 1.9690 and finally then peaked at 1.9720 before coming down again. Sometimes it is difficult to find the patience to hold long enough to hit the peak, having tried before and seen profit vanish, I took my profits at 1.9690, see the chart below . Click Here is a link to the report.

US Existing Homes - 23rd March 2007 - Good Report Bad Broker

Yes another great report which deviated significantly enough to give a nice trade, however for the first time ever the mystery broker didn't fill me. I just got the follow message

"Your MARKET order #74743121 for account #61709 was rejected due to market and/or technical conditions [9006]."

I have been getting great fills there during moments of high volatility on the market, which most of the big news reports are. It was very good I have basically nearly tripled the account in 2 months. I have noticed recently when starting the software that new software updates get installed, various patches and so forth, perhaps this has something to do with it. I have friends who have been phoned up by the broker when they do "to well" on their trading account, and pleasantly told to move on. News is one of the few times that the retail forex trader is on equal footing with the bank traders. Although bankers do get insider tips, and have research departments which can predict the numbers better than the economists who come up with them. The actual number is for everyone. During the normal market hours bankers can see order flow coming in from Mergers & Aquisitions, the buying and selling of companies, which affect the supply and demand of a currency, basic economic priciples, retail traders are left to the wild west of slips, sweep, and price warps of mostly unregulated brokers.

Anyhow luckily I was filled with good old Oanda, which I have used since I started trading the news. Oanda can widen spreads significantly, including the February 2007 NFP where the spread hit 200 pips on GBPUSD. They claimed on their Forum that it was an error, luckily I didn't get enough deviation and stayed out on that one. Oanda goes thru phases it seems, not to long ago I did think it was the end. I also had another chance to try out a new spreadbetting firm.

Any Existing Homes came out higher than expected, the dollar strengthened and the GBPUSD went south. This report is important since housing was mentioned in the FOMC speech. The number was expected at 6.3 million and came out +0.39 million above expectation. I was looking to place a trade at +/- 0.2 million deviation from the 6.3 expected number, which was already priced into the market. I could have held onto this alot longer, I exited 1 lot early with about 15 pips to lock in some profit, the 2nd lot I exited with +5 pips as I nearly saw all my profit gone. Not soon after the pair headed south again to make a good 60 pip move, but that would have meant holding on for a full 45 minutes. I really could have jumped in on this retrace with some more lots, but having done lots of these reports before, if the price goes back to the pre-release price you do have to get out asap. It is so hard to tell what it will do. Often I trade these with quite big positions and you really don't want to hold it thru a big retrace because often it simply does not come back. I had been in this position before and I held for it to turn back down and go further than before and it went negative.

UK Retail Sales - 22nd March 2007 ...another big win

Another great news trade this Thursday. What a week this has been, this is the third big news trade this week. After Tuesday I put decided to trade larger lots. The number was expected on 0.6% . I was looking for a deviation of +/- 0.3% to trigger a trade. So anything >= 0.9% or <= 0.0% I also was looking for a deviation +/- 0.4% to make a larger trade. The number deviated alot, it came in at 1.4%, a full 0.8% better than expected. Click here to see further info on this economic indicator from UK National Statistics.

So on to the charts. Here is my chart at Oanda. You can see the small blue triangle is where I bought 200k of GBPJPY. I held this trade for for awhile, sometimes I try to get out at the top of initial spike up, as usually after there is a retrace. I thought with such a big deviation we might see a further move up, I also considered this a good entry into a Carry Trade which would earn daily interest. When the pair did come down a bit I did close out half with +32pips, I let the other half run and did see further gain of 30 pips. Unfortunately I set a stop and continued to hold, after such bullish news for the pound I could see the GBPJPY going back up, especially after its recent losses. My stop got hit with only +12 pips.

On the mystery broker I traded 6 100k retail lots of straight cable and got an excellent fill. I exited half of the position, and then another lot soon after. Although I didn't exit at the top of the move, I was within 5 or so pips, which isn't bad. I held 2 more lot hoping for a further move up after the retrace, and it quickly became bad as the 9700 level was broken. It would have eventually come back up but you never know and watching all that profit vanish is not fun. So all in all +41 pips on 3 lots, +43 on 1, and +22 on 2 lots. This broker doesn't have great chart so I took pasted my trade history onto of a chart my new eSignal software generated. I got hold of this thru a free offer with Top Gun sofware

Canadian Core CPI - a double whammy

Another brilliant news trade only a few hours after the uk cpi.