Thread: 1) Do you have a question on Trading the News?

Should you have a question about Trading the News, here is the place where you can ask an instructor. The instructors are available 24 hours per day during worldwide business hours (Sunday afternoon thru Friday afternoon New York time). You will see the instructor's response posted after your question. (If you need help posting a chart, watch this short VIDEO.)

Hello,

I am trying to get a better understanding of Central Bank Interventions, how they work and how they affect a particular currency pair. Currently, I am thinking of the possible intervention by The Bank of Japan as it relates to the USD/JPY pair. In simple terms, I understand that the BoJ are likely to buy dollars with yen in order to de-value the yen (as a result the BoJ will end up with a huge reserve of dollars). However, my question is: does the BoJ manipulate the market in some way prior to actually buying those dollars with their yen? For example, would they for some reason sell dollars (that they may have in reserve) thus raising the value of the yen temporarily to a point where a large percentage of the currently placed “stops” from all of the long positions (as indicated by the SSI) are triggered? Then turn around and at that point buy the dollars back to effect that final devaluation? I guess what I am trying ask, is what are the sequence of events, causes and affects in a typical intervention? I’m thinking about all of this because there seems to be a strong sentiment among FXCM’s traders (as shown by the SSI’s values) that this pair will make gains and there are a lot of long positions seemingly just sitting there waiting perhaps in part for the intervention? Are these positions likely to get stopped out prior to the pair moving up? I’m not trying to trade the possible event, I'm really just curious…

Many thanks,
SBNL

Originally Posted by SBNL

Hello,

I am trying to get a better understanding of Central Bank Interventions, how they work and how they affect a particular currency pair. Currently, I am thinking of the possible intervention by The Bank of Japan as it relates to the USD/JPY pair. In simple terms, I understand that the BoJ are likely to buy dollars with yen in order to de-value the yen (as a result the BoJ will end up with a huge reserve of dollars). However, my question is: does the BoJ manipulate the market in some way prior to actually buying those dollars with their yen? For example, would they for some reason sell dollars (that they may have in reserve) thus raising the value of the yen temporarily to a point where a large percentage of the currently placed “stops” from all of the long positions (as indicated by the SSI) are triggered? Then turn around and at that point buy the dollars back to effect that final devaluation? I guess what I am trying ask, is what are the sequence of events, causes and affects in a typical intervention? I’m thinking about all of this because there seems to be a strong sentiment among FXCM’s traders (as shown by the SSI’s values) that this pair will make gains and there are a lot of long positions seemingly just sitting there waiting perhaps in part for the intervention? Are these positions likely to get stopped out prior to the pair moving up? I’m not trying to trade the possible event, I'm really just curious…

Many thanks,
SBNL

Keep in mind that the SSI is a contrarian indicator. So since the greater abundance of traders are long the pair, that means that the indicator is favoring a short trade. The SSI is suggesting that shorting that pair is the higher probability trade.

It is challenging to tell the sequence of events since prior to an actual intervention a Central Bank tries to keep everything under wraps. If word were to get out as to when it was to occur and to what level the entire objective of the intervention would be defeated.

Since the BoJ is interested in keeping the value of the JPY low for exporting purposes, they could achieve that by dumping a lot of JPY that they already possess on the market. Given that as supply increases demand drops, with a lot more JPY available on the market, the value of the JPY would drop. That would be the simplest scenario.

Dear instructors

dailyfx analyst often mention better to stay flat during month-end, friday having less liquidity,
it seems they always relate this with USD strength against EUR or AUD for example.

i don't really understand relationship between month-end and this.

and it is also mention friday having less liquidity, would you mind to explain the relationship with USD here? does it mean USD tends to be weaker against other major?

thanks in advance

Originally Posted by piri

Dear instructors

dailyfx analyst often mention better to stay flat during month-end, friday having less liquidity,
it seems they always relate this with USD strength against EUR or AUD for example.

i don't really understand relationship between month-end and this.

and it is also mention friday having less liquidity, would you mind to explain the relationship with USD here? does it mean USD tends to be weaker against other major?

thanks in advance

I am not sure if they are speaking about a specific direction they are anticipating but liquidity will usually be lower at the month end and on a Friday. I would not really read too much into it. I would need to see the article you are referencing to offer more feedback, but again, I do not believe they are looking for a pair to move one way or the other.

Hi
I have just signed up to FXCM and I am totally "gobsmacked" by the amazing resource available here!
It is staggering how much useful information is here, the live trading room, the signals and of course the first class training course.

My problem is with so much information available I am suffering from "Information overload" and I am struggling to find my way around, so could you give me some indication of the best way to use this site. For example:

I love the live room seminars but have missed some really interesting ones, have you got recordings available of past sessions?

Also have you got a similar past recordings for the Live news trading events?

How does the office hours session work? What is it for? How do I gain access to it?

Lastly I am very interested in all your training course, so again how do I get access to these?

I have a mountain of other questions to ask but hopefully once I fully understand how best to use this site then I will be able to answer a lot of these questions myself.

But before i go may I just say again what an amazing site this is and I for one will be strongly recommending it to all my fellow traders.

Keep up the good work and thanks again!

Clive Packham

Originally Posted by Clive Packham

Hi
I have just signed up to FXCM and I am totally "gobsmacked" by the amazing resource available here!
It is staggering how much useful information is here, the live trading room, the signals and of course the first class training course.

My problem is with so much information available I am suffering from "Information overload" and I am struggling to find my way around, so could you give me some indication of the best way to use this site. For example:

I love the live room seminars but have missed some really interesting ones, have you got recordings available of past sessions?

Also have you got a similar past recordings for the Live news trading events?

How does the office hours session work? What is it for? How do I gain access to it?

Lastly I am very interested in all your training course, so again how do I get access to these?

I have a mountain of other questions to ask but hopefully once I fully understand how best to use this site then I will be able to answer a lot of these questions myself.

But before i go may I just say again what an amazing site this is and I for one will be strongly recommending it to all my fellow traders.

Keep up the good work and thanks again!

Clive Packham

Hello Clive...we are glad you find this information useful. We certainly want you to be as comfortable as possible in your trading.
As you know, there are many different ways to trade this market which can make it seem like information overload.

I agree with you that there are incredibly valuable pieces of information here and we will improve the organization over time. It is because of feedback like what you are providing now which helps us design the course for you.

In the meantime, think of the Trading Course area as the central nervous system of the education and dailyfx+. The Live Trading Room is a place where you can find out what is new and fresh with us. In the Trading Room, we will refer to SSI, Trading Signals, or Tech Analyzer so for information on how to identify trades in the current market, so keep an eye on the calendar in the trading room.

Each week, we rotate the schedule of events. So if we are doing Candlesticks at 5am, the next week may be at 9pm. In the near future, we plan to have the calendar view so that you can fast forward a week and see what is coming up. For right now, each Sunday is when the calendar updates the schedule for the new week.

Regarding Trade the News sessions, we schedule during weeks of major market moving events. You will certainly find them the first week of the month as many central banks release their interest rate decision and you have US Non-Farm Payrolls.

Right now, we do not have the recordings made available. Our goal is to fill up the schedule with more events so you can log in at about any time and join us for a current assessment of the market.

The OFFICE HOURS is an open question and answer period. The content is driven by you, the client. When you appear, the instructor will simply take questions from the participants as that session is 100% client driven. Access to OFFICE HOURS is inside the Trading Room. Simply press ENTER ROOM in the upper left hand corner of the video player.

Essentially, the Trading Room is where you will find the instructors live, the course videos can be found on the left hand side of the Trading Room.

Lastly, in our Trading Room "Place A Trade" sessions, you will find us talking about CFDs in addition to currencies. So if you are interested in Gold, Oil and Share Indices, you will find us offering comments and potential trading opportunities on those instruments as well.

Please ask us any other questions you have. This course is designed for you in helping you become a better trader.

Thank you for posting.

Hi
I have just watched the videos on trading the news and have a question for you.

There are 7 strategies for trading the news, but how do you choose which is the most appropriate method to use for any forthcoming news events.

Great work by the way, really enjoying the video course, keep up the good work.

All the best Clive

Originally Posted by Clive Packham

Hi
I have just watched the videos on trading the news and have a question for you.

There are 7 strategies for trading the news, but how do you choose which is the most appropriate method to use for any forthcoming news events.

Great work by the way, really enjoying the video course, keep up the good work.

All the best Clive

Thanks for the kind words...

Each event in the market is unique from every other. One NFP will differ from another and one interest rate announcement will differ from the previous one.

Therefore, one strategy might be the best to use at one time and not the best for another. My suggestion would be to experiment in a demo account with the various strategies over numerous news releases to find the one which you have the greatest comfort and produces the greatest number of pips for you over time.

Once you find a comfort level and are ready to try it live, go in very small, perhaps a micro lot, for the first time and proceed from their as your account and comfort level dictate.

Is there an indicator to place on a chart in marketscope or strategy trader which will highlight the times of past news events, or is it something you have to work out manually?

Originally Posted by KellyD13

Is there an indicator to place on a chart in marketscope or strategy trader which will highlight the times of past news events, or is it something you have to work out manually?

Hello Kelly...

Yes, there is a free indicator you can download into the Marketscope charts that will place the news event on the affected currency pair.

Double click on the .lua file below and perform a SAVE AS to your desktop.

Then, open up a marketscope chart, select CHART -> MANAGE CUSTOM INDICATORS. A pop up box appears, select LOAD.

Then, find the .lua file on your desktop and press OPEN. At this point, this free indicator should appear in your INDICATORS pop up box.

When you add this indicator to your chart, it will make a notation on the chart of the news event.

Let us know if you have additional questions.

Good day,

I am new to the Forex world and recently watched the videos on trading the news. I have a couple of questions which i would like to ask:

1. When is major news released?
2. Is there a schedule available for traders like us to track when news should be released?
3. What news affects which currency pairs?
4. How do you differentiate good news from bad news?
5. When does Non Farm payrolls and FOMC meetings get released?

Thanks,
Kcarl

Originally Posted by kcarlwarner

Good day,

I am new to the Forex world and recently watched the videos on trading the news. I have a couple of questions which i would like to ask:

1. When is major news released?
2. Is there a schedule available for traders like us to track when news should be released?
3. What news affects which currency pairs?
4. How do you differentiate good news from bad news?
5. When does Non Farm payrolls and FOMC meetings get released?

Thanks,
Kcarl

1 and 2: Forex @ DailyFX - Currency Trading News, Forex Trading News, FX News, Forex News is a great source. You can check the calendar tab on top for all the releases. The most important releases are rated "high" in terms of their importance.
3. As a general rule, if there is an economic release in one country, it might effect all the pairs that contain that specific currency. For example, news out of England might affect the GBP/USD and the EUR/GBP. In other words, all pairs that contain the GBP.
4. You can see the expected numbers on the calendar. Sometimes the news will be better than expectations, sometimes it will be worse.
5. NFP is usually the first Friday of the month and the FOMC will vary, but usually once a month. You can check the calendar to make sure exactly.

Thanks for your assistance.

Originally Posted by kcarlwarner

Thanks for your assistance.

You are welcome...