Hi
I am sorry to do a repeat on yesterday but with Fed minutes expected late today and a strong expectation of QE3, we need to hang out of the markets again today.
This is the time where the big fish are feeding and we need to stay out of way so we aren’t confused with food.
We expect next week to return to normal trading conditions…
Context
Major news like this always poses traders the same basic challenges. In this case the market is pricing in that there is likely to be Quantitive Easing 3 announced today. 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 may 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 who 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 Tuesdays 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..
All the best
PBT
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