Hi
Our long trade played well yesterday with the pullback to daily pivot, a reversal and price quickly up to 1.2800. Depending on stops I would have expected it to be around a 1% gain for us, with a little extra for anyone who scaled out of the trade.
I will be watching the markets until after the German Constitutional court ruling on the European Stability Mechanism today. I won’t post a blog before this as its once again major news and we shouldn’t trade into major news. If after the announcement the market settles I may post an update
Context
Major news like this always poses traders the same basic challenges. In this case the market is pricing in that there is no problem to the ECB from the news. If they are right there is still likely to be a further push up. However the real fireworks occur when the news doesn’t meet expectations and the market has to adjust to the news. In this case the move down could be drastic and instant.
The real risk to traders is that news isn’t absorbed in total at once. So rulings etc are read and every word is traded instantly. So in this instance the first paragraph ay be positive, Euro pops up entering traders longs, next paragraph is seen as negative, the EURO drops, hitting the stops and then the body of the news is positive. So traders ho had long positions lose while picking the right direction.
In the future I will trade such an event live in front of you and explain the strategies to do so.
Technical Analysis
We do look set up long with a test of 1.2940, and 1.3000 likely if its good news.
The Day Ahead –
We have got ourselves in the right position with yesterday’s winner, so we will hold our money be patient and see if we get a chance latter in the day.
Bias- My overall bias is still short, but I need to wait for some evidence.
NO TRADE: WE wont trade today before the news
BEST Short entry:
BEST Long Entry..
Other entries..
News Today
9:00am EUR German Constitutional Court Ruling
All Day EUR Dutch Parliamentary Election
All the best
PBT
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