Trading Fundamental Events with Platinum Trading Academy
Thank you all for all the great comments on the Oil article I wrote last week, as many of you know already Platinum traders are aiming to collect 400+ Points from the Oil in May!
Today’s article is a topic which all Platinum Traders will know and be accustomed to talking about Fundamental Events and how to take advantage!
Being a Platinum Trader
I have mentioned before in previous articles that when it comes to trading, there are a variety of strategies that can be used to generate profits from the financial markets that you trade whether it is FX, stocks or commodities.
I know that there will be those who will say you shouldn’t trade news or you shouldn’t pip hunt and so on. And also, they will try to point out that their method is the best and if you apply it, you will be driving a Ferrari in 6 months, blah blah blah. I have no intention to say that we have the holy grail in trading as I know it doesn’t exist. Trading System is just a probability game. Since we know that, we have to bring the probabilities of that game to our side. We must have an edge!
If you have been a long-term subscriber to the Platinum Blogs, we have discussed different strategies such as the Extreme Zone and Major Cap Strategies which make profits in the market with consistency. Alongside the strategy, we have an algorithm which gives us a set of buy and sell zones every day and we use them as a final confirmation to give us as an edge to our trades.
In our article, today I would like to discuss one of the important components of the Platinum Methodology which is the Platinum Trading System. This is an algorithm that picks almost perfect supply and demand levels or in layman’s terms BUY AND SELL LEVELS, which enables you to make quick profits on an intraday basis.
I am going to talk about Trading Fundamental Events or, as you are most accustomed to hearing, “Trading The News”.
Is it possible to trade the news?
Trading Fundamental Events can be stressful if you do not know what you are doing. It is a common practice among retail traders that trading news is gambling and if you are serious about trading you should avoid it. Well, there is some truth to that statement. If you are entering any position on the market based on “guessing”, yes this is gambling. However, if you do have a strategy with a high probability chance of success, this would be trading.
Everyone trades the news trying to anticipate (guess) which way the market is going to go based on thousands of different variables which makes them believe they have the crystal ball which will tell them what is going to happen. We know for sure that no matter what information you gather together to build your case, that News Events will always be 50/50.
How do we trade Fundamental Events here at Platinum Trading Academy?
Please don’t get upset with me, but for you to trade news the way we trade here, you do need that Trading Algorithm. I can’t tell how to trade news based on our methodology without that system.
But before I show you some visual examples and what you actually look for, let’s understand what a fundamental event is.
As a trader, you have to be aware of what is fundamentally happening in the market. Even if you proclaim yourself to be solely a technical trader and don’t pay attention to fundamentals, I am sure you will agree that you will not enter a trade 1 hour before a US Federal Reserve interest rate decision or Inflation Report for the Bank of England in conjunction with Official Bank rate decision for that matter.
A fundamental event is the public release of data (i.e. Inflation Report, Employment figures. etc.) which has the potential to change the landscape of a particular market which in return may create a reaction from investors and speculators.
Fortunately, we cut all the fuss out. We do keep an eye on the fundamentals and that is mainly for us to position ourselves in long term trades. For this particular strategy we are discussing here today, all you need is that one Fundamental Event is scheduled and for that, you can easily have access to any Economic Calendar available on the internet and also that you are aware of which market that the particular release will affect. For example, Trade Balance for Australia will affect the Australian Dollar and BOJ (Bank of Japan) Policy rate decision will affect the Japanese Yen.
Trading the news does not have to be complicated.
We do keep an eye, on the fundamentals and that is mainly for us to position ourselves in long term trades. For this particular strategy, we are discussing here today all you need is access to the economic calendar and the top 13 events to trade in the week. For example, Trade Balance for Australia will affect Australian Dollar and BOJ (Bank of Japan) Policy rate decision will affect the Japanese Yen.
Trading the news
Now that we have an idea of what a fundamental event is, let’s get to making money trading the news.
- First thing you need to understand is that this is a Quick Profit strategy. So, we are looking to get in and out of the markets with a fixed risk reward.
- We will buy or sell on the 3rd zone of the day and on the release of the particular news event
- For this strategy, you need to be able to trade live. No pending orders;
- If the zones are not hit within 15 minutes of the news release, the trade is no longer valid to be taken;
- Stop Loss or risk for the trade is 20 pips and target the target or take profit is 20 pips.
- If the trade fails please DO NOT REVENGE TRADE.
Ideally, you want the 3rd zone to be at the peak point for the market you are going to trade. What is Peak Point?
Understand for peak point as the maximum movement of pips for the market you are trading based on the daily average movement. For example EUR/USD moves on average between 95-105 pips per day, therefore, it would be ideal for your 3rd zone to be at the price which matches that movement from its high or low of the day.
Let’s look at some examples:
In this Kiwi example, we had the Employment Change q/q and Unemployment Rate being released @ 11:45 GMT on the 2nd May 2017. I understand that may be a bit late for those in the UK, but we have clients all over the globe and those who were trading the Asian session would have benefited from this news release. Right after the actual figures were out, Kiwi shot up and hit the 3rd sell zone of the day. It took 10 minutes to do so and in this particular case, the market reversed completely making well over 20 pips which was our target.
In our most recent GBP/USD example, we took the picture on a 1-minute chart just to show how the price reacted to the entry level.This trade needed less than 5 minutes to work out. BOE (Bank of England) released its Inflation report at the same time as the Official bank rate decision on 11th May 2017 @ 12:00 GMT. The market immediately sold off and reversed 25 pips immediately after hitting the buy zone. In this particular case, the currency pair continued selling off for the rest of the day and platinum traders banked a clean 20 pips.
In a nutshell, if you have a strategy and the correct tools, trading Fundamental events is not only possible but it can be done with minimal stress.
We are not trying to guess which way the fx market is going to move or react. We are trading after the news is released and we are simply looking to take profits from the markets with a fixed risk reward.
What we have shown you today is yet another way in which our trading system (Platinum Algorithm) can be used to take Profits from the financial markets. As I have written before, the trading system is a fantastic tool and if you know how to use it correctly, you can take many pips and points out of the Financial markets. Time is money, get in touch with us to book your free consultation with one of our professional traders or ask the for your free 48 hours access to the access to the Trading System and one of our Market Analysts Today.
The Platinum Formula:
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
THE PLATINUM WAY
At Platinum, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinums Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.
Hopefully you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Live from the Platinum Trading Floor.