Thread: Trading Economic News

Originally Posted by Spirit of J.L.

Hi Gregory, thanks for your analysis!
How do you think will US politicians eventually come to an agreement, and if not how the USD (in particular EURUSD) will react?

Hello Spirit of J.L.. We got an agreement over the weekend and traders that went long equities and risk currencies into the close betting on a resolution are now taking profits. There seems to be a reversal underway now. It is Monday so we will see how this day closes as Tuesday is usually when the "Real Market" shows up as traders traders return from an extended weekend.

Economic Calendar for August 1-5 2011

Hello Traders! I hope you have enjoyed your weekend and are ready for an exciting week of trading. An over the weekend US debt ceiling deal between Congress and the President has removed some of the uncertainty however the House and Senate have to approve this. There are three central bank announcements in addition to the very important U.S. Non-Farm Payroll/ Employment report for the month of July.

Originally Posted by jennypeters

An electronic active trader should understand the operation of a margin account under various market conditions and review investment objectives, financial resources and risk tolerances to determine whether margin trading is appropriate for them.

Good points jennypeters. I would add that if a trader is not an active day trader, they should understand these points as well. What type of trader are you?

If you are a businessman you need to have an economic calendar to see to it that all of your business are improving or increasing its annual income.

Originally Posted by JoshuaBelanger

If you are a businessman you need to have an economic calendar to see to it that all of your business are improving or increasing its annual income.

Hello Joshua. An economic calendar is good to refer to before you start trading so you can see what other traders may be paying attention too. It is good to be out of short term trades before the news as this time can be very volatile. What type of trader are you? Are you a long term or short term trader? You may want to take this trader personality test here: Forex @ DailyFX - What Kind of Forex Trader Are YOU?

NFP Could Create Short-Covering Rally in Euro

The Daily FX Economic Calendar for the Week Starting August 8-12th 2011

Here is the DailyFX Weekly Economic Calendar in detail here: http://www.dailyfx.com/calendar/

Watch the Daily FX Team live coverage of these events here

Happy Trading!

What event do you think will have the most effect on the market you trade?

Do you think the "market"/traders are looking at something else?

John Kicklighter mentioned the intervention earlier after the Noda comment (Noda: $JPY Noda: intervention isn't targeted at specific levels 8 Aug 8:26:33 PM. John:If that was intervention, I would just act like it didn't happen. Otherwise, the market is going to completely balk at any future efforts. 8 Aug 8:28:57 PM)

I wonder if the Japanese were more making a statement rather than a real intervention today.

The last intervention on August 4 (GMT) was ahead of the BOJ rate decision and a number of other announcements. I'd be curious what price action would have been had the intervention not occurred ahead of the announcements. I don't know enough about the fundamentals and expectations to comment, but the timing struck me as possibly not being coincidental on that one.

Originally Posted by uncle_mk2

Hi, I have read about a fundamental trading strategy using "Risk Reversal" as a contrarian indicator.
According to Investopedia:

<QUOTE>
Risk reversal refers to the manner in which similar out-of-the-money call and put options, usually FX options, are quoted by dealers. Instead of quoting these options' prices, dealers quote their volatility. The greater the demand for an options contract, the greater its volatility and its price. A positive risk reversal means the volatility of calls is greater than the volatility of similar puts, which implies that more market participants are betting on a rise in the currency than on a drop, and vice versa if the risk reversal is negative. Thus, risk reversals can be used to gauge positions in the FX market and can convey information to make trading decisions
</QUOTE>

So, when there is a spike in Risk Reversal, the market is overly biased on one-side which means, we can bet on the other way. The usage is similar to SSI.

I think, if both SSI and Risk Reversal coincide, we can have a more certain bet.

Question now is, where can we obtain free Risk Reversal Data? Thanks

Hello uncle_mk2,

You make a good point that both SSI and option volatility/risk reversal would both be useful in trading.

I have located two places sections withing DailyFX that may be of interest to you:
Forex @ DailyFX - US Dollar Likely to Fall Further Across the Board
Forex @ DailyFX - Forex Strategy Outlook: Debt Ceiling Risk Calls for Breakout Trading

Regards,

Greg McLeod
DailyFX Forum Moderator

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