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We’re going to demonstrate how Forex Source subscribers made money trading a sentiment shift involving the UK General Election this week…
The move we’re going to be looking at is the GBP/USD Pair. So, let’s break this down and see how you could have predicted and caught this move, using our market commentary.
So, firstly we need to understand the context or the baseline surrounding this pair before the move took place…
On the 12th of December we posted our Current Sentiment Drivers report for the GBP. In the report we highlighted that the biggest focus at that time was on the UK election which would take place later in the day and will be one of the most significant developments for the Pound since the EU referendum as it could bring an end to the current Brexit deadlock and shape the direction of the UK going forward with regards to both Brexit and UK’s domestic policies. So, based on this we knew that the GBP was being driven by the election and that the outcome of it would be a very big mover in the currency.
Once the baseline was in place the next step is to identify the type of breaking news that would generate the biggest market moving shift…
So, for this we can go to our Currency Research Tab in the Forex Source Terminal and open our Top Trading Opportunities Report. In this report we highlight the outcomes which would trigger the biggest reaction in the Pound across the board and would provide us with an opportunity to trade the Pound. Now in the report we highlighted that one of the most hawkish sentiment shifts from this election would occur if the Conservative party won the election by a majority and that such an outcome would be the most positive reaction for the Pound from the UK election.
All we needed next was the trigger, in other words, the sentiment shift that we identified ahead of time, to actually take place.
So, also in the terminal on the 13th of December we had a very important announcement coming through on the Forex Source news feed that said the “UK election exit polls show Conservatives are set to win 368 seats”. This was an extremely important release as the number of seats the Conservative Party needed to acquire a majority was 326. We saw from the actual GBP/USD chart that the Pound shot up almost 196 pips in the first minute after that release hit the wires. We already knew from our report that a Conservative Party Majority would be the most hawkish sentiment shift, so even if we missed that first initial move and jumped in after the first 1-minute candle there was still another 150 pips left in the tank to the upside. Now, we might not always catch these types of moves exactly as it happens, but knowing what to look for and how to trade it could still have banked you some decent pips even if you got in 2 or 3 minutes later.
If you’re interested in learning more about how our market commentary can help you interpret news and fundamental analysis into profitable trades like this, simply click the product tab on our menus above for more information.
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