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Saturday, Dec 20th

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Last Updated (Sunday, 27 May 2012 13:31) Written by Carl Weiss Tuesday, 22 May 2012 13:00

How To Trade Economic Announcements

Let's make our lives easy, OK?

I like trading economic announcements for quite a few reasons, most of them because I feel that I am not only trading in a manner, time and place, where I am stacking the odds in my favor, but because I can schedule my trading - and being able to schedule my trading, as opposed to being enslaved to monitoring the market all day, every day, frees me up so that I can enjoy my day doing other things.

What are the advantages of trading economic announcements?

  • Reoccurring events.

–      You can coordinate your trading schedule around them instead of waiting for a setup à Frees up your time.

  • What, When, and Where are known in advance à Easy to prepare for.

–      What = e.g. Quarterly GPD.

–      When = 8:30 am EST on the last day of each quarter.

–      Where = S&P 500 e-Mini contract.

  • Consistent setups - Action, Reaction, Run.
  • Easy to trade - Lot’s of ‘under-the-hood’ actionable information available via …sceeto.

What unique information is available to you that can enable you to successfully trade economic announcements?

  • The bulk of trading in electronic markets is done by a small number of large firms.
  • Each of these firms creates its own proprietary economic models.
  • Though each of these firms do their analysis independently, their results are similar..
  • Each of these firms uses the output of these economic models to trade economic announcements via pre-programmed trading bots.
  • These bots leave their footprints on ‘The Tape’.
  • The Tape is inescapable.