- User Case Study:Week 6 of using Forex Source - March 19, 2020
- User Case Study: My Daily Routine using Forex Source - March 13, 2020
- User Case Study: Week Four Of Using Forex Source - March 6, 2020
Hello, everyone. I’m gonna show you exactly how you could have made plenty of pips using the information and analysis provided by the Forex Source Terminal.
On Monday, the January 13th, early in the morning, we got a report saying there is a lot of weakness in the British pound based on dovish comments from a representative of the Bank of England.
Now, based on what he said, we knew that in the week ahead we were gonna have to focus a lot on data points coming out of England. Then slightly after the report telling us that their dominant sentiment was weakness in the pound, we got a report in the terminal, which we get pretty much everyday, which tells us what could be tradable sentiment shifts. And this reports reads the following.
The market has begun the week with a clear focus on the British pound following Sunday’s dovish comments. In his interview with the Financial Times, Vlieghe made it clear that he would vote to cut rates if he did not see an imminent and significant improvement in the UK’s data.
And here in the bottom of this report, it says keep a close eye on UK data, especially survey-based measures which Vlieghe specifically mentioned as they will be the first data points which relate to after the UK’s election. We know now that this week, the major focus is data coming out of the UK. The first one that was coming up was about an hour after that report came out, which was, for me, at 3:30 a.m.
This report was the UK’s GDP estimate month over month for November. Before it comes out, we do know what exactly are the markets’ expectations of what the numbers are gonna be. In this one specifically, it was 0%. And the moment it came out, it was at minus 0.3%.
This report came out first over the Squawk, which is a live news channel that we have on the terminal, which basically tells us the news the moment it is coming out, which is faster than having someone having to type it before we get the information. We get an immediate report that says the GDP estimate is at minus 0.3% versus the expected 0%. Immediately, we see a reaction in the market, which you can see in this screenshot right here.
Now, let’s say that we caught it. Of course, it’s very difficult to catch the move right at the very top because it spreads and because maybe other people have faster reflexes than we do just to click. But let’s say we caught it. If we would have held onto it for half an hour, we would have made a total of 26.3 pips.
Now, that is pretty significant, especially considering that the British pound has a relatively high pip value. Then on Wednesday, we got another report that said the tradable sentiment shifts of the day.
In this report, we are told that today, a very important market moving data point is the UK CPI to be released in about an hour. Here, they explain to us what are the markets’ expectations as well as what the Bank of England’s target is which is, as you can see right here, is 1.5%.
It says we will be looking for an overall disappointing CPI report to provide further opportunities to sell the British pound leading into the Bank of England’s January meeting, especially if the CPI year over year prints below the market’s minimum expectation of 1.4% and begins to approach the key level of 1%.
The moment the news was released, again, same story as before. We get it over the Squawk. We, a couple of seconds later, get the report filled in in text, although the Squawk is optimal because it is the fastest way to get news.
So we see here in the report that the UK CPI year over year was expected at 1.5%, but the report was 1.3%. Again, disappointing data, which leads into an opportunity to sell the British pound.
So let’s say we managed to catch it right about here and we held onto it, again, for half an hour. We would have made 25.6 pips in profit on the pound/US dollar pair. Again, very good, relatively easy.
All you have to do is be there, and know that it’s gonna happen, and know that it’s important, and know what the markets’ expectations are. Again, two days later, on the 17th, this was on Friday, we got one more report speaking about the day’s tradable sentiment shifts which talked about UK data.
In this report on Friday, it says, all-in-all, this week has begun to show signs that the market’s focus could be shifting back towards more traditional market themes such as monetary policy expectations and economic outlook.
On this day, on Friday, we had the final data point out of UK for the week which was the retail sales month over month. And this report was, again, a disappointing one, which means another good opportunity to short the British pound. And in the exact same way as the last two trades of the week, if we would have caught about here and we held onto it for about half an hour, we could have made in total about 65 pips.
Now, unfortunately, I did not trade this myself because of the time zone that I live in. As you can see in most of these reports coming out of Europe, it is very late, very, very early in the morning, and unfortunately, I was not awake for it, but I do wish I had been because it definitely was the most important thing moving the markets this week.
But I do consider that I have learned my lesson. In the future, I will try to pay more attention to the European trades. But now if you were in Europe at the time, these releases come out at about nine or 10 in the morning, which really makes for some very, very breezy tradings, so.
All you basically need in order to catch trades like these is you need to know what’s going on, what the market is focusing on, what the expectations are, and you need to get the news fast, you need to get it immediately. And the Forex Source Terminal is a great way to go about all of these things because you have analysts that tell you what to focus on.
They tell you what the market is focusing on, what the expectations are, what the risk sentiment currently is, and this helps a lot to know what exactly to pair your trade against.
I pretty much just showed you the British pound/US dollar because it shows very clearly how the market was moving. But if you take into account risk sentiment, you could have probably paired it against the yen and gotten some bigger moves, seeing as how this week the market was relatively risked on with a lot of positive sentiment coming out of the signing of the deal between the US and China as well as the easing of tensions between the US and Iran.
Thank you for watching. If you have any comments or questions, please leave them in the comments down below.
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