oussama94
05-29-2017, 00:28
For breakout traders, the knowledge of which data are being released on
the day you place the trade can help to determine the size and confidenceof the trade. For example, in the daily EUR/USD chart shown in Figure 4.1,
we see a triangle forming as prices consolidate. If the nonfarm payrolls report
was expected the next day (which it was), a breakout trader would
probably overweight positions on the eve prior in anticipation of a large
breakout following the release. In contrast, the third bar of the consolidation
was the day of the GDP release. As you can see, the range was still
comparatively tight despite the fact that a breakout appeared imminent.
Given the knowledge that the average instantaneous 20-minute move after
the GDP release is not even comparable to the nonfarm payrolls move,
the same breakout players hoping for a large move off of that economic
release should probably put on only 50 percent of the same position that
they would have taken if NFP was set to be released. The same guidelines
apply for range traders or system traders. Nonfarm payrolls day would be a
perfect time to stand on the sidelines and wait for prices to settle, whereas
the day that GDP is being released could still provide an opportunity for
solid range- or system-based trading
the day you place the trade can help to determine the size and confidenceof the trade. For example, in the daily EUR/USD chart shown in Figure 4.1,
we see a triangle forming as prices consolidate. If the nonfarm payrolls report
was expected the next day (which it was), a breakout trader would
probably overweight positions on the eve prior in anticipation of a large
breakout following the release. In contrast, the third bar of the consolidation
was the day of the GDP release. As you can see, the range was still
comparatively tight despite the fact that a breakout appeared imminent.
Given the knowledge that the average instantaneous 20-minute move after
the GDP release is not even comparable to the nonfarm payrolls move,
the same breakout players hoping for a large move off of that economic
release should probably put on only 50 percent of the same position that
they would have taken if NFP was set to be released. The same guidelines
apply for range traders or system traders. Nonfarm payrolls day would be a
perfect time to stand on the sidelines and wait for prices to settle, whereas
the day that GDP is being released could still provide an opportunity for
solid range- or system-based trading