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Tekunda · 01-08-2003, 10:35

Although I have not been trading Forex for a long time, this was one of the first things I have noticed and am trying now to use for my advantage. (My observation is strictly for the EUR/USD)
Whenever there is important economic data published (like today the ISM Index) 5 to 10 minutes before the set time the market gets nervous. You can see the pips jumping up and down about 5 pips in every direction. At around a minute after the data has been released it will make a sudden jump of about 6 to 10 pips in the direction according to the data (good US data, the pair goes north, bad US Data the pair goes south)
So today I could observe again this pattern and I made 40 pips in 5 minutes. The market jumped from 1.1187 to 1.1202 (the initial take off) and with about 30 seconds delay all the way to 1.1245. I jumped in at 1.1202. I am not in Forex long enough to swear an oath that this pattern will emerge every time data is being released, but this is certainly something which deserves further investigation, since the same pattern happened yesterday, where I made 70 pips in the opposite direction as the US data was very good. (Today is was lukewarm, which supported the EURO)
Basically you would need the same news feed, the big brokers use. I have emailed Bloomberg, since even paying for the service is fine if you can make such gains. The FXCM data feed is being delayed one minute, but it should be enough to only watch the trade station to see which way the market is heading after economic data is being released and you will need quick fingers.

I could even see following scenario: (You would need two accounts though, since hedging is not allowed with one account)

On one account you buy the pair about 5 minutes before data release and on the second account you sell the pair.
Now you wait for the market to take off in one direction. As soon as you see the marekt taking off in one direction, you close the opposite account. That would mean that you loose your spread and maybe a few pips. But with a 25 to 40 pip move, you should still be able to catch at least 15 to 30 pips AND you would play this pretty safe.

I would truly appreciate some feedback on my theories, since I made good money applying them so far. Has someone ever noticed the opposite? Say good US news and the pair would still take off like a rocket into the wrong direction? I have never seen this, but as I said, I am not in Forex long enough to be 100% certain. All I could see is that the market would not budge in any direction whatsoever, regardless of the news, but moving into the opposite direction? I think hardly ever.

01-08-2003, 10:35	#9
Tekunda level 3 Join Date: Jul 2003 Posts: 633 Downloads: 0 Uploads: 0 Rep Power: 0	News and market movements Although I have not been trading Forex for a long time, this was one of the first things I have noticed and am trying now to use for my advantage. (My observation is strictly for the EUR/USD) Whenever there is important economic data published (like today the ISM Index) 5 to 10 minutes before the set time the market gets nervous. You can see the pips jumping up and down about 5 pips in every direction. At around a minute after the data has been released it will make a sudden jump of about 6 to 10 pips in the direction according to the data (good US data, the pair goes north, bad US Data the pair goes south) So today I could observe again this pattern and I made 40 pips in 5 minutes. The market jumped from 1.1187 to 1.1202 (the initial take off) and with about 30 seconds delay all the way to 1.1245. I jumped in at 1.1202. I am not in Forex long enough to swear an oath that this pattern will emerge every time data is being released, but this is certainly something which deserves further investigation, since the same pattern happened yesterday, where I made 70 pips in the opposite direction as the US data was very good. (Today is was lukewarm, which supported the EURO) Basically you would need the same news feed, the big brokers use. I have emailed Bloomberg, since even paying for the service is fine if you can make such gains. The FXCM data feed is being delayed one minute, but it should be enough to only watch the trade station to see which way the market is heading after economic data is being released and you will need quick fingers. I could even see following scenario: (You would need two accounts though, since hedging is not allowed with one account) On one account you buy the pair about 5 minutes before data release and on the second account you sell the pair. Now you wait for the market to take off in one direction. As soon as you see the marekt taking off in one direction, you close the opposite account. That would mean that you loose your spread and maybe a few pips. But with a 25 to 40 pip move, you should still be able to catch at least 15 to 30 pips AND you would play this pretty safe. I would truly appreciate some feedback on my theories, since I made good money applying them so far. Has someone ever noticed the opposite? Say good US news and the pair would still take off like a rocket into the wrong direction? I have never seen this, but as I said, I am not in Forex long enough to be 100% certain. All I could see is that the market would not budge in any direction whatsoever, regardless of the news, but moving into the opposite direction? I think hardly ever.