4:30am (NY Time) UK GDP q/q Forecast -0.3% Previous -2.4%
ACTION: (GBP/USD) BUY 0.1% SELL -0.5%
Our focus will be on the GDP, is defined as the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time. GDP is the primary measure for the economy’s health, and a stronger GDP means that the central bank will more likely to raise interest rate.
Our surprise factor is 0.4% for LONG and 0.2% for SHORT, we’ll look to SELL GBP/USD at -0.5% or worse and BUY GBP/USD at 0.1% or better. Historically, there is a 80% of chance if our S. Factor is hit, the market will move up to 50~70 pips within the hour.
Since the Prelim GDP is the first release of the quarterly GDP, it is usually the one with most potential for surprise. This is probably the most important news event for UK in this quarter.
UPDATE 1: In response to the requests that I am getting from these posts, I am going to make a special video on Sentiment Trading, which is one of my signature Forex systems. Should have this video completed in the next 24 ~ 48 hours.
UPDATE2: GDP came out much worse than expected at -0.8% with no prior revision. This brings yearly GDP to -5.6%, the largest decline since record begin in 1955. GBP/USD dropped immediately about 40 pips, then I waited for a retracement and SOLD GBP/USD for about 30 pips of profit. Not a bad trade for 1 hour of work.
[flv:http://www.newsprofiteer.com/072409-ukprelimgdp/072409-ukprelimgdp.mp4 480 360]
Related posts:
- UK 2nd Quarter Prelim GDP Analysis & Video 07/23/10
- Forex News Trading UK Prelim GDP q/q 04/27/11
- Forex News Trading UK Prelim GDP q/q 01/25/11
- Forex News Trading UK Prelim GDP q/q 07/26/11
- Forex News Trading UK Prelim GDP 10/26/10
- UK Final GDP q/q 03/30/2010
- UK Revised GDP q/q 11/25/09
- Forex News Trading UK Revised GDP q/q 02/25/11
- UK Revised GDP q/q 02/26/2010
- UK Revised GDP q/q 05/25/10
{ 13 comments… read them below or add one }
Is it certain that there will always be a retracement? How long would one has to wait for a retracement to take place after a movement has taken place as a consequence of a news release? Thanks.
There will always be some kind of retracement… the only time when there are no retracement is when the news deviation is so wide that traders just hold on to their trades for more profits.
When is it best to enter into a trade, before, at the release of the news, during or after the news at the retracement?
it depends on the news, the release, and the condition of the market at the time.
And most of the time Fibs are hit or miss… that’s why they got so many levels… think about this, if one level doesn’t work, then the next one will probably work… so if this were a person, who tells you let’s have dinner at 6:00pm, then he says nah, let’s do it a t 6:30pm, then he said better we do this at 7:25pm, then he says 8:30pm… would you still trust him? But for us traders, we do have that stubbonness of trusting these levels, without really knowing the whys and the whats…
moyesan:
You, me, and the whole world like to know that. Fib is not the golden rule of universe, lots of the times they don’t work.
Herry, price has been in sideway for sometime. i will like to know why price fail to obey fib level on this sideway movement?
Looking forward to that video, Henry
Hi Henry-could you please explain retracement
Thanks
RB
Retracement means price action returning back (to a certain degree) to a previous level after a market movement as response to a risk event or general sentiment. For instance, UK GDP came out worse than expected, and market reacted by moving GBP/USD down 50 pips, then after that initial movement of 50 pips, market retraced back 20 pips, so at this point in time GBP/USD only lost 30 pips.
Why do retracement happen? Mostly because of profit taking, as traders who got into the trade quickly begin to close their initial SELL orders to book profits. However, in the initial few seconds of market reaction after the news is not retracement, but just brokers trying to match market. In other words, after the GDP news release on that initial drop, it was probably market makers making the price, and if there are more sellers, price will drop more until no more; then price will go move back up until new sellers come into the market… this price match game happens during news releases for a few seconds then real market reaction takes place.
Thanks for your GDP forcast .I just waiting and ready to trade by 4.30 with usd50 but on the same time my line disconnect.I am very frustrated in that case.
Your forcast very excellent.By next week i’am very sure to pay for your Trading Fundamental News.I hope u can assist me.
Tq.
Hello Mr.Henry,
Today’s GBP UK Prelim GDP q/q 07/24/09.
I managed to get 30 pips.Thanks for your news alert.
pls educate me as to d most approprate 2 trade news bcos some school of taught dat 5minutes into d news.pls sir, what is ur take on dis?