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applejuice
 

Registered: Jun 2011
Posts: 46

 

05-21-12 10:19 AM

Hi,

I don't do this, nor do I intend to. But I'm interested to know if anyone around here does.

Every week there are a good dozen or so fairly significant speaker events. Most of the time they don't cause significant market movement, in my experience, but occasionally you'll see the market shift several ticks on the back of something a Central Banker/Finance Minister/PM says.

Of those speeches reported in popular subscription news service calendars, I am not certain if it is possible to watch them all - and many will surely not even be in English?

However, I'm quite certain if you actually watch some of these speeches live, you will pick up on some points before they are reported on Reuters terminal (which I also watch), and possibly you could found a profitable strategy on it. After a year of doing this you'd probably be nicely clued up on macroeconomics, and the types of phrases + speakers that/who are most likely to cause a stir.

Any thoughts?

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doublechin
 

Registered: Apr 2004
Posts: 208

 

05-21-12 10:31 AM

The whole prop arcade business relies on this strategy. How do you think a London trader made a million in 20mins on Trichet saying "monitor closely" and bought and named a race horse that. Hardly a novel strategy but certainly workable.

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bashatrader
 

Registered: Jun 2009
Posts: 128

 

05-21-12 10:43 AM


Quote from applejuice:

However, I'm quite certain if you actually watch some of these speeches live, you will pick up on some points before they are reported on Reuters terminal (which I also watch), and possibly you could found a profitable strategy on it.



I would guess that major positions are established well before the speech. You are running the high risk of discounted action.

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achilles28
 

Registered: Apr 2005
Posts: 7534

 

05-21-12 11:02 AM

Correct me if I'm wrong, but 10 years ago, there wasn't half the economic news there is today. Seems like a cottage industry for front-runners...

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applejuice
 

Registered: Jun 2011
Posts: 46

 

05-21-12 12:53 PM

doublechin, I didn't know that about the horse!

There was a recent example of opportunity during Mario's ECB speech. I seem to recall, in the opening couple of lines, he said something about inflation expected to remain around 2%... "HOWEVER...". That was the first word which differed from his previous speech, and if you were quick, there was a good seven ticks to be had. Must be plenty of other examples for people who've really done their homework on what the market expects speaker A to say, and what speaker A actually says on the day.

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mokwit
 

Registered: Sep 2003
Posts: 2297

 

05-21-12 12:59 PM

You are up against policy maker tipping.

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