News and Events!!
News articles are in my opinion over rated. They are written to sell the news. If a journalist had the real story and fully understood what the news meant and what the market would do next he would not be a journalist for long.
I am constantly reading articles that state “ Market’s gain shrugs off interest rate rise” or “ Market dips on interest rate rise”. Who said it did. Most of the time the market is already dipping or rising the news had no real effect. How ever there are times when news moves the market and it is those times we need to look for let the journalists find their own news.
The best source for upcoming news is in the financial calendars. A Google search will locate various calendars for various countries. St George Bank has a good Australian Economic Calendar they bring it out the first or second day of each month.
http://www.stgeorge.com.au/corporate-business/report-centre/economic-calendar
Forex Factory have a good global calendar.
http://www.forexfactory.com/calendar.php
I used to I print up a calendar and keep it in a folder on my desk. It is a handy tool to have at the end of each month I made notes of market moves that occurred on the day and time so next year I can refer back to a news item and see what happened. The next move may not be in the same direction but at least you can be prepared for the move.
RCTimeofDay – Strategy
Now I use a strategy that shows me the best time of that day to trade. In a few minutes I can scan back 1 year or more and ask what time of day to enter the trade. If it’s an Interest rate meeting or other Major event for example.
The Australian RBA Interest rate decision is usually timed in the same first Tuesday of the month. I enter the details the strategy shows me the optimum time to enter based on entering each Tuesday. I can pull up the charts apply some indicators and have a look. Is today similar to one of the other first Tuesdays of the month.
Below you can see the results for selling the AUD/USD short of a Tuesday morning from Jan 1 2011 untill May 4 2012 and several resulting times that would be profitable. This one is 6.50 am Aust QLD time GMT+10. 50 pip target 50 pip stop.
Next I can scan through the chart and see the actual trades and what they looked like.
Below is the first Tuesday of may 2012 and the Tuesday before.
Here I can clearly see that there is a chance to sell the 12 hour high early in the morning if I have enough confirming factors.
Below is the first Tuesday of May 2011 and the Tuesday before.
Am I saying that I trade blindly off this one strategy “NO!!”
Am I saying that I would be extremely cautious going long on a Tuesday morning at 6.50 am “Yes”.
Here is a 20 min Youtube showing how I use the strategy. http://youtu.be/1_NP1Ht_5zo