Trading on News


just out of interest, I was following what would happen in the GBP/USD market after today’s UK inflation data release.

On 11:30 (GMT+2:00) it came out 1.9 % vs. 2.3 % expected and GBP went down like a stone within couple of seconds (5 seconds - you can see the attached graph).

Couple of thoughts I had in relation to this:

  1. Trading on News Releases indeed does not seem like a good strategy - since the price dropped that much within first 5 seconds (!) - before even it was announced on Internet radio.

  2. I could not understand why GBP went down? From my Macroeconomics lessons, I was thinking that since inflation went down, the exchange rate of the domestic currency should have appreciated? Or am I missing something here :confused:

Good luck,

P.S. Those 2 losing trades you can see in the chart as well - I was just guessing. The first one was totally stupid. The second one would have been profitable unless stopped by a too tight S/L.