 Hi everyone, so I've got a question from a trader who said hello Can you please explain how you do pre-news trades and post-news trades? We've taking taking into account the macroeconomic differential background of the currency pair That is being traded also I like to confirm whether or not if your fundamental analysis trade entry trigger involves an Approach that considers the macroeconomic differential background but of the news releases supporting or refuting the market narrative and Technical analysis signals aligning with the trading view. Is this correct? So what I'll do is I kind of break it down as simply as I can in terms of my process and how I go about looking at You know pre and post news trades of course I've been doing this for years. So I kind of do this automatically, but you know, it might seem like a bit of a long process But the more you do it is the more you get comfortable with doing this. So So first things first is I'm looking at Obviously like a fundamental bias in terms of Interest rate divergences right now interest rate divergence to me is one of the main factors in the currencies A strength for weakness or appreciation or devaluation, right? And so, you know, typically we're looking for Central banks that are you know hiking versus central banks that are potentially holding or cutting rates, right? And so You know every week on, you know, and every Wednesday and every Saturday Looking at and you know updating, you know, this is my bias for example And I'm looking at, you know certain, you know pairs Which I think have the potential for the strongest divergences if not in the short term You know for the medium term and short term medium term is maybe, you know, one to three months Maybe into six months beyond, you know, the one to three to six months period. I'm not necessarily looking at but You know, this is basically where You know show you guys are my bias whether I'm long short or I'm interested But not necessarily with a very strong bias stepping on the watch list and I say I still might take these trades But with a bit more caution when I say caution just to just a lower position size and less position risk. And so Once I've got my my bias In fact I'm doing my pre-news fundamentals. So I'm looking at the bias I'm looking at data forecasts on trading economic and I'm looking at the overall market consensus and that's just by reading You know news reports from Bloomberg from ING Etc. You know the bank analysis from, you know, MUFG etc. So You know I'm looking at the market consensus and I'm looking at data forecasts and the data forecast would be For example From here, right? So if we're looking at Last what happened last week, so let's say Friday the 4th of August And it was a big day for the US, right? So non-farm payrolls was expected to come out at 1-8-5 Right, so we're looking at the previous and then you're looking at also employment Yeah, the employment data. What is what is the consensus number? That may come out and well and the forecast number is Trading economics own economists forecasting what they think so you got consensus number You got a forecast number but the previous right and then you obviously got the actual that came out And also as well Other data like For the dollar and for every other currency you want to look at anything that's you know related directly to inflation So average hourly earnings was something That you know, we look towards as well because if average hourly earnings is an inflation measure and if it comes down Then it is more likely that the Federal Reserve is likely to hold rates, right? Because if inflation is you know comes higher Or it's more sticky then There's a chance that the Federal Reserve could continue to hike now again. My bias was on the dollar yen For a sell so what's the dolly in now here we go, right? For the dollar yen and it's been that way for a for a while I know that this trade has a bit of nuance to it in terms of it's a bit more of a riskier trade I'm anticipating more yen strength because Of the bank in japan Adjusting yield curve control recently, which is one of the first steps towards policy normalization What policy normalization meaning that they are likely to in at some point of in the you know Even this year or next year start to now um hike rates and um, you know move from Negative interest rates and so that should be positive while pretty much all other central banks are looking to end their hiking cycle, right? so There's that divergence in place. So um, so that's you know, just just an example of a bias that I have and uh, you know and uh where my trading direction is and so Um, you know, I'm I'm looking at all of that and I'm saying my bias data forecast market consensus Is it you know supporting my uh, my my trade idea or is it not? Yeah, so um If it's not then You know, I might kind of stay on the sidelines in terms of a pre news Trade because I'm thinking I'm a bit more unsure, right? So if you're not it today is not pointing in your direction Then just don't get into any trades pre news. That's pretty much it But if it's more if you see for example, um And I haven't got my pencil I'll do it on here, right? Um, so if you see for example, there's forecasts that come out Yeah, the forecasts are coming out and they're not necessarily good for the dollar, right? But you see the dollar moving higher Then all that is telling you is that it's a this is a better place to look to short the dollar, right? Now if you have a situation where the forecasts are coming out and um, they're not supportive of the dollar either But you see prices going lower. Yeah, then you're not necessarily you don't necessarily want to short the dollar down here. Yeah, and so um You know kind of moving on to you know pre news technicals This is the idea behind looking at whether you know prices cheap or expensive. Yeah, it is in a cheaper expensive location. So On the dollar yen, right before we got to non-farm payroll news You know prices were coming to the upside which meant to me if my bias is to the short side Yeah, and I'm trying to buy the yen Yeah, meaning I'm hoping prices do something like that Then that makes sense for me. This is a cheap area, right? Because this was expensive For the dollar and cheap for the yen if it wasn't then prices would have moved higher and vice versa This was expensive for the yen and cheap for the dollar because prices move higher, right? So Um as prices came up to to this area here, I'm now looking at this and saying to myself, okay Um As we get towards, you know Friday, I'm looking at that and I'm saying to myself All right, and this is a nice area to potentially look for a short if the data comes out and supportive of You know the the trade right and again I say this all the time, but nobody knows right no one's going to know You know what happens in terms of the data, you know economists Can be wrong where we're trusting in their their analysis But they are you know, they can be wrong and they're wrong, you know from time to time a bit more often than usual recently But if they're right about the forecast their forecast Then you can look to take a pre-news trade and the pre-news trade would just basically mean Okay, well you have you won't have the confirmation. So what do you do in that sense? You just lower your position size take a smaller than normal position In anticipation that price is may go in your favor, right? But yeah, so One seconds So looking at the location is very very very important and where you are you want to buy low sell high, right? You don't want to you know Start by looking to buy the dollar if the location is all the way at expensive areas Even if the news comes out supporting your your your uh your trade You always want to look to buy on pullbacks And so um the pre-news entry Or a new setup. Yeah, so for example, that could be a stop hunt a just a supply demand zone in an extreme You know rsi You know and and and an entry whether that's the capture pain candle or You know a close back insider level one for example something like a stop hunt You know, I'm looking to take that One to probably three days before the actual news News announces right and again, there's not too much news every week You know some news some weeks are obviously busier than others But if for example, you know, I'm looking at for example selling the dollar Then obviously the main news for that week the main catalyst for price movement should be non-farm payrolls on the friday And so if we go to you know the Like a pre-news trade, right? So you can see by tuesday prices came up into that, you know 80 supply zone So you can start to look for if you you know you've done your pre-news analysis And you think that prices should want to come down You can start to look for trades in and around this area and in fact there was a stop hunt trade That occurred on the thursday the day before The the non-farm news came out, right? And so Again, you're looking at that as You know an entry To get involved in a nice stop hunt Trade yeah with the anticipation Again, because nobody knows what is going to happen or can predict the future It's the reason why we manage our risk Um with the anticipation that Prices Yeah, we'll continue following through and then the news that comes out on a friday, which would have been you know here Yeah, it's supportive of your Um of your trade, right of your trade bias in your direction and so Um and if it's not then what you do is you look to either trail your stop down Lock in maybe some profits and break even if you've got any um and get to break even um Or a small profit whatever it is Or you look to just take you know full profits if you just feel that you know what i'm in decent profits and You know the news has kind of gone against me. So, um, you know, you just get out of the trade, right? um And so from that perspective um That is really how um, I look to Uh trade now if as far as my trading process in terms of pre and post news now if um For example, you know news goes you're in in in my direction your direction then Um, you can look to add into the trade depending again on the setup if there's a setup there Sometimes you can you know look to actually, you know, just press Uh a seller or a buyer. I've I rarely ever do that I tend to wait for candlestick confirmations, right? Um And um and yeah, so that that's you know for me, but Um, you can obviously decide what it is that you want to do and every news event is different every news event will Show different data the news that came out On friday. Yeah was actually quite confusing because you had non-farm payrolls actually come out Lower than the consensus, but then you had unemployment go down and also Average hourly earnings go up which is basically inflationary right in nature And so although there were cracks in employment Inflation is still remaining sticky, right? And so um, You know, I did say this on the friday and in the group call. I just said that look there is um There is you know issues in terms of you know The clarity and not every single news release is going to be you know, very very clear. Sometimes it is sometimes it isn't right, but um If it comes out clear then you can make decisions if you if you're unsure about the trade and what it means, obviously you can ask um and In the group and if you know, I give an answer You know the the guys in the group give an answer that is, you know Maybe just look stay on the sideline. Don't enter any new trades, etc Then you can start to manage your trade if you're in a pre news trade already and so um, you know the post news trade when the news comes out, is it supportive Is it a setback to your to your trade? Um, or is it a change now a setback could mean the data necessarily Might be one in let's say 10, right? Let's say for example, you've got, you know, maybe, you know, I don't know Let's say five data releases that that you look at right and that are the five Four have been really really positive and then, you know, the one that comes out has been like A bit shaky a bit wobbly or maybe just not as positive as the market expected What you want to do is still look at the overall data Yeah, and say okay is inflation likely to come into um into play is the federal federal reserve still likely to High crates even though they've had one bad data point because one bad data point could be a bit of a blip, right? Not everything doesn't move up. Yeah in a straight line and everything doesn't move down in the straight line Right, you have peaks and troughs, right? You have areas where all in a trend and that's not just a price trend in any kind of Data trend that you're tracking you can have, you know, whether it's gdp, whether it's inflation Whether it's jobs you're gonna have You know periods where it doesn't might be going in a downtrend But you might have, you know, maybe a month or two where jobs might actually go up, right? But the overall trend is to the downside and so the market might look past the negative number And say well overall we've had four good data, you know points or bad data points for the for the dollar or whatever currency And that is going to be stronger than just one data point. Yeah, and so You have to take that also into account as well So try to think about what is the bigger picture and not micro or hyper focus on just one news data point. Yeah, so That's why I say You know, is it a bit of a setback in the short term and possibly it could be a setback in the short term You know, there's there's there's nothing wrong with when the news comes out, right? Is not trying to react. I know you see these these videos where brokers, you know, do this thing where they say Oh, you know, you've got to be sharp. You've got to think quickly. You've got to make decisions, you know Instantly and all that kind of that's all that's all nonsense, right in terms of the way that we trade, right? Sometimes and a lot of times in fact, it's best to just sit and watch the dust settle Don't worry if you miss the move because You're never really going to miss a move Overall in terms of if this was such if this is such a massive move to the downside And it's going to trend to the downside. Guess what you're going to get a pullback at some point Yes, you might not get the initial move to the downside But you will as night follows day get in on a pullback. So don't worry You don't your job is as a trader isn't to capture every single high and every single load. That's impossible So just understand that if it's if if the data comes out, right? And you're not sure about the move and let's say for example It starts to go to the downside Don't be don't fomo into price if it doesn't make sense to you as to why The move is doing what it's doing and the price is doing what it's doing in the short term Don't chase if you understand that. Yes, you know what? It was really bad data for the dollar and it's you know It means that it's the prices are likely to you know, continue going to the downside a few hundred pips Then of course you can start to short Immediately or wait for maybe a candle closed confirmation to try to try to look for a short or a long trade Right, but if it doesn't make sense the news doesn't make sense to you or it's a bit unclear Um, you know undecided in the market. Some people are saying it's positive Some people are saying it's negative as they were saying with non-farm payrolls Then just don't worry about it right just wait for the dust to settle It's best not to jump into trades and fomo and get caught on the wrong side of the market because that's what the market You know as a habit of doing right because there's a business model. Um, you know the the market makers are searching for liquidity Right and so and and so uh, yeah, you know It's um short term, you know, uh moves aren't necessarily to be believed if they're not backed up by Some sort of data, right? So With that being said, I'm just trying to go back and make sure I've covered everything So I've a wait for a close or a candle Or you can enter immediately, but it depends on how supportive the news is If the news is not supportive consider taking profit as well and trailing You know your stop loss if the news comes out and it goes against you so um, that is really my My take on um, how I Look at you know pre and post news trades Um And I'm just thinking if there's anything else that I've missed out So I'd like to confirm where all you look at fundamental analysis trade entry trigger I don't know what the fundamental analysis trade entry trigger is It's just I'm just looking at um, you know Trade entry is basically just the like I said a capture pain candle or You know, even like a stop hunt pin bar, for example, something like that closed back inside the level That I'm interested in Um, so it's more of a technical thing because my bias is just to look for a buy or a sell right overall And the actual level when the actual setup whether it's a cpr a stop hunt or just a daily supply and demand zone with um You know at a level so So that involves an approach that considers the macroeconomic differential background. Absolutely it does Relevant news releases supporting absolutely The market narrative and technical analysis signals aligning with the trading view. So pretty much that's it. Yeah Everything that I've pretty much spoken about that's the process and so And so yeah, um Yeah, that's really it right and as I said, it's really important to look at where you are from a location perspective It's all important to be fair But it's really important to look at where you are from a location perspective And you know, the opportunity really is is not if the market prices in the news already It's more about if the market is if price is doing something different to maybe what the forecasts and the fundamentals are saying Then, you know, if the if the if the forecasts and the fundamentals are for example, you know projected to be To depreciate a currency yet you see in price go to the upside Yeah, and it's appreciating But the forecasts are saying something different the market consensus is saying some something different Then that for me is a trade a great trading opportunity Yeah, and even if the market is wrong about that and let's say the market's been trending up And let's say for example, the news is wrong and the forecasts are all wrong And then, you know, there is positive news for that, you know trade. I'm still not going to buy at highs I'm just going to wait for prices to go up if it depends obviously that depends on my If if the news is enough to change my fundamental bias But if it is enough to change my fundamental bias and I want to get along on that trade Then I'm waiting for a pullback always wait for pullbacks for me And if I can't tell you exactly how to trade, of course, everyone has their, you know, their different methods and you know You know, you're managing your own money, right? But ultimately I'm looking at looking at Buying on always on the pullback so Again, the edge is where The market consensus Yeah, and price are not necessarily aligning. So that's one of the things To really kind of look towards not buy at highs and sell at lows. It's buying low and actually selling high. So, yeah I think I've covered everything Anything else I will let you guys know in the room if you have any further questions on the video Yeah, definitely You know comment in the in the discord group and I'll get back to you as soon as I can Anyways guys, hope that was helpful. Take care and speak to you soon