Trader Dale Volume Profile
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Macroeconomic news<br />
you see news about something dangerous happening in the world (for example North<br />
Korea shooting missiles, etc...) then you will be able to make the connection, and you will<br />
know it's best to avoid trading the JPY until the situation calms down.<br />
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Dairy auction news: This news directly affects NZD because New Zeland's economy is<br />
hugely dependant on exporting milk. When there is Dairy auction macro news, you better<br />
avoid trading the NZD.<br />
Industrial metals news: If there is significant and surprising news concerning industrial<br />
metals (for example steel, copper), then you can expect to see some spike moves on the<br />
CAD and the AUD because Canadian and Australian economies are depending on<br />
exporting those metals. If there is an aggressive, one-sided movement on the AUD or CAD<br />
driven by news concerning industrial metals and materials, then it is usually better to avoid<br />
trading those currency pairs, or at least be a bit more careful.<br />
News concerning a trade partner economy: A good example would be strong news<br />
affecting China's economy. When there is such a news, you can expect the AUD to react.<br />
The reason is that China is the biggest trade partner of Australia. Australia exports to<br />
China, and if for example, China's economy slows down, then it means less export of<br />
industrial metals from Australia. This is bad news for the Australian economy, and the AUD<br />
reacts strongly to such news. So whenever you see strong and surprising news concerning<br />
China's economy, then remember to be careful with your AUD trades.<br />
There are more correlations and links like this, but those I mentioned are the most common and<br />
affect the forex market, in my opinion, the most.<br />
Tip #6: Don't trade during significant news release<br />
Apart from the fact that it is very difficult or nearly impossible to predict price movement during<br />
the news release, also the market conditions are usually against you during significant<br />
macroeconomic events. Even if you had a working macro news based strategy, your strike rate<br />
would be severely diminished by wide spreads, lack of market liquidity, and slippage. Those are<br />
quite common and tightly linked to news releases. It is pretty hard to trade the news when you<br />
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