Bloggings of a late-night Forex trader.

Monday, May 5, 2008

Friday Jobs Report

Thank heaven for the Friday jobs report. Sometimes the jump after an important piece of data like this leaves the opportunity to buy on a "false dip" as I like to call them. This will happen when a pair drops quickly only to work its way back up very quickly.

This is exactly what happened last Friday when the jobs report broke at 8:30AM EST. I was able to buy at the bottom and sell pretty darn close to the top in a 5-minute span. Can't say this works every time but when it does it sure is satisfying. I've included the chart below to show the sudden drop. I only plan this strategy with EUR/USD since it is by far the most volatile pair so has the quickest jumps from one extreme to the other. You can see on the chart where I bought the pair as well as my stop and limit. You will notice in this case I am actually running two trades so I could double-up on the profits.

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