How to trade this bad boy.

This Thursday try your very best to trade a hawkish hold, or perhaps Sir would like a dovish hike with that, or maybe a nuanced indication of a delayed hike in Q3. And while your at it try trading the 3 months average rhetoric often spoken of by central bankers discounting the last 4 misses in data. You get where this is going.

Just so we are clear. CPI yoy .2 OFF, Wages .2 OFF and GDP having wrong written all over it. Carney’s interview at the BBC wasn’t dovish but he did not look confident. Also, none of this helps the key metric for me which is now standing at less than 25%

Nice work if you can OIS it.

Those of my followers on Linked In know that I’m a technical trader. That said I use a lot of confluence. OIS, correlations, monetary musings, sentiment, flow, positioning, and my favourite word RISK

Above all of this I like to read the market. Look at this chart. 8 big figures and 3 weeks of closing at the bottom of the weekly range.

That is VERY bearish which means there are more sellers than buyers. Simple. Has the hike been priced out ? YES. Anything less than 25% in OIS has been priced out – that’s my rule so please find your own – just as long as it works for you.

I’m buying 1.3060 no matter what. Please read the chart because it tells you why.

I’m selling 1.3760 no matter what. Again the chart says everything.

Will i get filled ? Probably not. What is the best risk reward and trade for the big day? Buying CABLE at market Thursday morning but SMALLS. Will i do this ? Probably YES.

Job done. Thanks for listening.

Patrick Reid

Patrick Reid

Swapped the TV screens for the trading screens.
Philosophy: "Define your risk, only then can you ignore it"

Read how Patrick got into trading here
Patrick Reid

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