If you look at the charts today you will see that a downtrend in gbp/jpy did not develop as the pair failed to move down. So, my stop for the pair was hit and I had a minor loss. However, the news from Great Britain today created a day trend up and I will show you how you could have profited from the event. Although the data was of medium importance, the numbers came out much better than expected and caused pound to strengthen across the board. You always have to watch data of medium importance to see if there are any surprises that the expected and the real number can cause.
So, today was the day when the difference between the expected and real number was great. Half an hour before the news came the pair managed to move slightly above the yesterdays high and then retraced somewhat. That retracement presented a unique opportunity to place a buy stop five pips above the level 136.33 and a stop loss order 136.00, just a few pips below hourly support. You would then simply have to wait for the news to come out. The market started going up slightly ahead of time (2 minutes before the release) and when the news came it continued its’ ascend. So, your order would have been opened and you would have gone up together with the market. In fact, you could still be in the trade now. That’s how you trade trends that are caused by fundamental news.
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Disclaimer
Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.