Thank you very much for the good question. I was hoping somebody would ask me that.
I did not trade the activation on the 22nd March by a tall candle because I didn’t understand the impact of the news (I believed it was PMI news on eurozone), it was rated as “medium” impact. I did not take the trade firstly because it was near support level that I defined as “Significant”, secondly I am not sure a surprising number on the medium impact news could push the trend, and it is based on my experience, PMI news create reaction but not a trend changer… but this is just my own observation. Don’t take my word for it. I took last night ‘news’ candle because I understood the impact on Bernanke’s comments.
It is pretty complicated I know. But to put things more objective. It is like this :
If news candle activates Macfibo caused by a news/economic data I dont understand the impact and did not hit [B][I]**the surprise factor[/I][/B], then I ignore it
If news candle activates Macfibo caused by news/economic data that I understand such as GDP, Interest Rates, NFP, whenever Bernanke on TV, BOE, ECB and Federal Reserve statements… I will trade it…
There is more to this than I dare to point out… I’ve made some rules so I trade with full objectivity. I really don’t want to confuse everyone here since most of you just started trading (not that I am patronizing or anything, but I was a newbie before and this kind of information is more destructive than constructive to a steady development).
[B]Surprise Factor : Say consensus on a specific data is 30.0, forecasted 40.0, then the surprise factor is when between the actual and forecaseted is 20.0 or more. Each news/data has its own characteristics in terms of this surprise factor. Example, yesterdays German IFO data, it was more than forecasted Actual 109.8, only 0.1 more than forecasted, based on my own understanding and reading, this kind of news should have more than 0.3 difference to make the reaction HUGE and in frenzy. Due to 0.1, price did move upwards (if you were in Macfibo Sell yesterday, you know this) but it was only a spike and price moved back down and complete 161.8[/B]
If I may, whilst you gaining experience and more knowledge, assuming that you want to continue trade the system, just trade based on the basic rules (the pdf explanation). Basically, trade whenever there is signal, but on the sidelines, you study s/r and fundamentals. This goes to newbies who are trading the system. Just my suggestion, each person has their own process.
Voting has started guys. I know my vote has been cast
Sufiansaid, thanks for the awesome insights into daily range and news events! I’ve done this long enough to know how to use it to my advantage. Your advice is much appreciated.
Is it me or what… I just dont understand how to vote on this site… When I go to the linked page where there are all the systems, I just cant find the voting button… :-S
ok. I’m still in, level is now sticking to 127.1 level as I guessed, let’s see if also the rush up to 168.1 will go the same 