Just wanted to post an important trade (but dangerous) the NFP (Non Farm Payroll) report, it appears every first Friday of every month. I'll create a post explaining the NFP in greater detail at a later time.
I woke up this morning around 7:30 AM EST. The NFP usually gets released around 8:30 AM barring any leaks, By going to the economic calender the night before I was able to look at the forecast and deduce that there were positive expectations for the US Dollar. So with this in mind I went over my technical analysis of the EUR/USD currency pair which at the time was near the high of an upswing (upswing in this pair signals EURO buying or Dollar selling). I noticed this on a 4 hour chart along with a daily chart, as a matter of fact I actually shorted the Euro the previous day and still had a few lots remaining for a 2nd & third target.
The previous day shot up to the height of the 4 hour upswing channel in anticipation of the NFP report the following day. The market was hitting that resistance plus going through a correction in anticipation. Because of the importance of this report it is normal to expect a wipsaw, you must gauge it based on experience, once that report comes out you have to digest the actual figures and make your move before or right after the wipsaw (I prefer after), but sometimes I live dangerously, yah baby yah!!!
Well I decided not to live dangerously, I actually didn't make a trade at all because I already made a trade the day before which is going in the same direction as my short term analysis. So now I can just watch it unfold. The numbers came out with a little lower than expected figures, just slightly though. If the numbers had came out on point I would have estimated a 60 PIP wipsaw, but instead there was only a 36 PIP wipsaw, 30 minutes afterward I was up 52 PIPs from the height of the wipsaw, 41 minutes after the report I was up 70 PIPs, by 4 PM I was still up almost 85 PIPs from the wipsaw.
This was from a single lot left from a previous trade, if you add the original entry from the day before that lot had gained almost 110 PIPs since the day before, I traded 10 lots to begin and took profit on 7 after 20 PIPs, took profit on 2 more lots after 40 PIPs and I'm still up 110 PIPs on the last lot:
20 x 7 lots = 140
40 x 2 lots = 80
110 x 1 lot = 110
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total = 330 PIPs
I won't tell you what leverage I currently use by here's a grid to tease you on the possibilities:
Leverage x 330 Pips
$.10 x 330 = $33
$1 x 330 = $330
$10 x 330 = $3,300
$100 x 330 = $33,000
$1k x 330 = $330,000
$10k x 330 = $3.3 Million
$100k x 330 = $33 Million
I plan on starting a hedge fund some day I'm no pro at hedging yet but I have the concept down pact and I'll share some basics on it in time. Here's the MS PAINT screenshot of the NFP trade on a 5 minute chart, notice the bulk of activity was complete in almost 30 minutes, how's that for a day's work?
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