There is no risk in my opinion. Just wait for the data, look for the price move after it. If the price moves up rapidly - there should be a correction within 5 minutes after the information. This is where you want to open your position. It works most of the time - it worked today.
Your strategy sounds a little more conservative than the guy I'm talking about. He is in within seconds.
hello mr. profit, do you fade the move, or simply go in the same direction after the pullback? thank you in advance, surfer
Same direction. Rapid instant moves are followed by corrections and this mean the move shall be continued. Besides - it is not always instant to learn what the news are. It is safe to assume you will always learn the news later than pros. Here the move was within 1 minute and the correction lasted for 5 minutes. It is unusual to have a spike like that without the following correction. When a move is weak an lousy - you want to open position immediately. This usually means a correction will not occur because the market doesn't believe in a strong price change. Then the price move impulse lasts for few hours and goes as far. This happens when you see an unexpected data - and the market moves like 20-30 pips aftewards. There could even be a correction but there is also plenty of time to think and act accordingly. There is one thing you have to avoid at all cost - the move "before the news". Usually it is a short manipulation which can make you loose money. Typically moves before the news are in opposite direction - because speculators want to increase their gains by lifting the price other way.
What about boxing the trade with a Buy Stop above, and a Limit Sell below the top and bottom trend lines. Say about 25 to 30 pips either side of the top and bottom trend line? Looks like ya got a 150 pip pop up either way.
IMHO, it's the flexible traders that don't rely on any pre-planned expectation of price movement that profit most, and likely off the backs of those who do; a highly anticipated report and the ensuing action can never be distilled so simply down to "If X then Y". If you limit your expectations to one scenario, your profits, if any, will likely be proportionately limited --which sounds fair enough to me.
Thats the style I follow flexible, but if a chart consistantly plots, like a cliff straight up or straight down, I'm interested in that play. Its the EUR, GBP, and any US based pair. I'm interested in discussing an AMBUSH setup (Top Gun Music fads in):eek:
Strong resistance. If it moves thru and holds then up thru the 200 day MA. If it moves down first, then the green line will be the place to buy it. Look for a strong reversal at the big red line above. Also, run thru your weekly charts. There is a MAJOR bullish divergence in place so be careful betting on extended moves back down. Clear as mud.