Trading around announcements

Announcements and Reports

There are about 5 or 6 great learning places (named market activities) that are really terrific for making self assessments of where you are in the infinite scheme of things.
A and R’s are one of the best.

There are four parts to every announcement and each involves the portential for making a lot of money. This is why they are important for self analysis. The contrast between not being able to make the money and the money that is presenting itself brings out the primary reasons a person is not able to trade effectively. You can check yourself each stage of the way.

Part One is telegraphed by smart money giving you about 6 to 8 minutes to get in synch.

Part Two is a spike trade (a reversal trade).

Part Three is a “news” phase where the herd joins the traders

Part Four is a resumption of the trend, if any, preceding the announcement.

Several people here commented upon doing stuff to deal with announcements. This week we have three good ones to process: Two Greenspans and a primary report out. Walther can give us 6 or 8 old greenspans he has filed and collected as examples. I use the Greenspan as a standard against which to measure all A and R’s. By learning one of the most frequent down cold, you get, by the end of Part One to have a calibration on all the upcoming parts. You get to calibrate the movement of price as well as the periodicity of the moves.

Now for the important part. You. As you already know an A or R is coming up, you are well prepared to monitor. If your beliefs, etc are in gear and everything is in balance, you just let it roll out and trade it. Emotions are paired with what you sense as each moment goes by. A moment is as long as the life of the emotion you are having. Either you summon the emotion or it appears of its own accord and is not what you would prefer. A good thing to do is record the sequence in a recorder if you’re souped up and equipped or to just take chronological notes in synch with the Parts. If you are an edge trader you will have both good and bad emotional situations through the series of events. Good emotional situations for the edges you do well with and bad emotional situations when the events are not where you are capable edge wise.

By using A and R’s to determine how you are lacking, you can focus on specific pinpointed places to improve. Leaving money on the table by being sidelined when it is there for the taking, and even worse, getting turned upside down by the succession of parts is a powerful incentive to learn how to do better.

The steps are:

List your emotions moment by moment.
Note the ones that work for you (The ones you summon up as you monitor) and trade those edges only for the time being.
Note the emotions that surprise you and then work against you when you do not want them in the space.
Go to work on the surprise type emotions. These are out of whack and busted. They are not allowing you to either learn or improve.
For each of these describe them and also describe what should be in their place instead. Keep reviewing each one each time it comes up in the same way. First you will get to know each one and then you will get to change them to get them to work for you in the situation they currently control in a surprising and negative manner.
As you get to be able to summon up more and more emotions you want during a monitoring of a trading opportunity, you also get to learn how to handle the trading opportunity.

You can only trade opportunities successfully if you are the one bringing up the associated emotions. If you trade only one edge at present, you will find that it is the one that YOU summon the emotions for trading.

If you are trading a trend, you will find that as the trend continues moment by moment your emotions change. As long as you are summoning the emotions you are doing a good job. As soon as you get a surprising and counterproductive emotion that is the time to log it and after RTH go to work on it.

Gradually your emotions will stop blocking your trading, then stop blocking your ability to learn, then they will block fewer and fewer money making opportunities that you monitor.

Because A and R’s have four diverse parts, it is a terrific place to begin to do self assessment. We get several shots at it this week. You will easily get to see the three or four worst emotional surprises you now get to deal with because they are busted.

 

I agree with dgmodel's post above -- "if youre inexperienced... i would suggest you stay away from trading eco's or earnings releases... unless you have money to burn, ive seen a lot of guys blow up their accnts doing this..."

Trading economic releases is tough. I am experienced, and I can't regularly make money doing it. Once in a while I try, and then I remember why I don't.

I am sure that some traders on elitetrader successfully trade releases, but they have different skilll sets (or something) than I do.

The crowd you trade against are among the toughest: the locals in the pits, the traders in Salomon's trading room with their superior equipment, superior information and superior experience, the traders on elitetrader who can successfully trade releases, etc. In place of Salomon, you can insert, Morgan, Merrill, and a thousand other players.

alainniala, maybe you are gifted at trading releases. It is worth a try. But, remember that there are easier ways to make money in the market....

 

Curious.... how do you KNOW what is going to happen for sure, after an announcement such as sentiment numbers?!

Are you new to the markets...?

ICe

 

So how does that (what you say above) relate anymore to trading after announcments... than to generic trading on any given day. Isn't direction/trend always a consideration and challenge... in some respect.

I might add... however, I do not day trade much.

I

 

isnt that because risk follows reward??? and if youre trading news announcements with stops youll be taken out a lot more times than you make money... c'mon that is definately not a method a beginner should learn on... (if in fact this person is a beginner...)

 

I afraid not unless you can read "they"'s minds and decisions.

 

do you throw the DVDs out when they pass certain date, say 3 years old.