No Trade: 2013-07-25 04:52 ET
Bah! I had internet and equipment trouble just ahead of the UK GDP release, so I wasn’t able to put up my straddle on GBP/USD.
Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.
It’s a shame too. My plan was to set straddle orders outside of the 4:00 am ET 15 minute bar, but I was having trouble connecting with my broker. And as expected, it was a volatile reaction even with an inline read (0.6% vs. 0.6% forecast) and good for about 40 pips or so at this time.
So, the lesson learned for today is to have backup equipment, or internet connection even, for those crucial moments when your main equipment fails.
Well the day is still young and we’ve got US Durable Goods and Initial Claims up in a few hours. Maybe I’ll spot a decent setup there, and if I do I’ll be sure to share my thoughts with ya here on my blog. Thanks for checking me out…good luck and good trading!
Trade Idea: 2013-07-24 23:00 ET
Good evening forex friends! Let’s see if I can bounce back from my previous loss and start a new winning streak with today’s UK Preliminary GDP report. Time for a consolidation break in GBP/USD?
I’ve got the 15 minute chart up on GBP/USD and we can see the pair is pretty quiet at the moment during the Asia session, which is actually pretty typical behavior before the preliminary quarterly UK GDP release. This event attracts quick volatility, even if the number comes inline with forecast, so there’s a good probability I can snag a few quick pips today.
So, my plan for today is to put on a straddle trade (buy orders above market and sell orders below market) just before the event release and go for the minor support and resistance levels marked on the chart above. The momentum for the reaction to the event usually only lasts for an hour or two, so there is a very short time expiration to this trade. I’ll look to close if those areas are hit and/or by the time European traders hit lunch. And because this is a day trade, I look to only risk 0.25% of my account on today’s trade.
One other thing to note about Cable ahead of this event is that the market may break out of consolidation as soon as London trading opens. So, I’ll wait until the European session before picking levels to set my orders.