ForexSpirit

Last weekend I purchased Tom Yeomans new ebook entitled ‘Fundamental Forex Boot Camp Papers’. It can be purchased from his website at http://fundamentalforex.com/. My initial feeling, after having read his blog and the first few chapters of the book, is that his approach to trading news releases compliments very nicely with the 4×1 methodology that I’m currently following.

Whereas the 4×1 methodology is a medium term trading strategy, focusing on the underlying storyline of the two currencies that make up a tradable pair, trading news releases is a much more focused, short term strategy. The approach that Tom teaches is very simple in nature, as all good trading strategies should be. Trades are only entered if the actual news data released is sufficiently different from the expected figure. The amount by which the actual data release must be different from the expected data is termed the trigger amount, which is known in advance of the data release, and is based on how prior deviations in the expected and actual data caused the market to move in the past.

I traded the Canadian retail sales number this morning using this method. The actual data release (1.5%) was well off the expected figure (0.5%) which triggered a sell on USD-CAD. I only traded with the smallest lot size possible, which I will continue to do until I become overly familiar and comfortable with this new addition to my trading tool box.

Today also saw the return of some euro strength. I closed out my most recent entry when some dollar bullishness reappeared around noon. Of course, just after that the euro really took off. I set a target of 50 pips on one of my earlier trades which got hit soon afterwards.