The Fed interest rate change took place today as expected. Or not as completely expected as some thought.
The Eur/Usd and Gbp/Usd in particular oscillated substantially before finally deciding the greatest number of stops to hit were to the upside. So up they went.
Anyone who tried to newstrade had difficulties keeping a position without having a large stop in place. The Usd/Chf and Usd/Jpy also had multiple reversals today, creating havoc for anyone trading around news time.
A trading friend of mine called me today who has traded currencies on major news reports for 10 years. He got whipped horribly in the Usd/Jpy and Eur/Usd. He quit taking trades today after getting his stops hit 3 separate times in 8 minutes.
It is a sorry situation that most new traders get faulty information telling them that news trading is where they should start to make money in forex. In actuality, it is one of the more difficult ways to extract money from the markets. Simply bracketing the market prior to newstime is a fool's errand.
There are some good ways of making trades off of the news which aren't very risky. But, like most good trading methods, they require diligence and consistent application.
My last working FirstStrike trade of the week, ie: short the Usd/Jpy @ 104.02; got stopped out at 104.62 for a loss of 60 pips.
Now, we can get ready for some possible OneNightStand trades on Friday. This time, the long Usd/Chf and Usd/Jpy and the short Gbp/Usd are strong possibilities for ONS this week.
Welcome to the 5 new subscribers that signed up today. You join us in the middle of a little drawdown, which is the most common situation for a trader. As mentioned in posts before, more than 95% of the time a trader is in some form of drawdown.
You do get used to it, but never get to like it. Well, I never have.
Current equity is $710.05.
Have a good night.
Joel Rensink
www.infiniteyield.com
Wednesday, April 30, 2008
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