The GBP/CHF pair ws sold down before and shortly after the Fed Rate Cut. Feds cut the rate to a varialbe rate ranging between 0 and 0.25% causing a bit of uncertainty in the markets. Take a look at the price action. A classic example of a whip saw price movement that takes out stops before and after an economic event. This is why trading the news is not always profitable. In fact most times it a losing battle. Especially if your stops are not wide enough. Many brokers increase the spreads on pairs. Take a look at this huge spread on the FXCM platform
If you trade with this broker you will want to watch out for wide spreads like this during news events. 82 pips on major GBP/CAD Take a look at the spreads on GBP/USDNews trading can kill your account.
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entered long at 1.7443, the spread was something like 7, is that okay?
ReplyDeletealso, what stop are you putting on this? i'm guessing 200 pips?
thanks
DailyFX on the GBP tomorrow:
ReplyDelete"Bank of England Meeting Minutes – December 17
The Bank of England’s meeting minutes tend to be a huge market-mover for the British pound upon release at 4:30 ET, and this time is unlikely to be any different. During the December meeting, the BOE’s Monetary Policy Committee slashed the Bank Rate by 100bps to 2.00%, as expected. The key to trading this release will be to gauge the vote count, as indications that the decision to cut rates was unanimous and discussion of deflation risks could lead the British pound to pull back sharply. "
Sometimes I don't listen to DailyFx just simply because they are no more right or wrong than your or I are. Yes the pound did tank but only against a few pairs. Look at GBP/USD & GBp/JPY & GBP/CAD it hasn't tanked really against them. But that is not to say the downward movement isn't building. I just don't always take their advice.
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