Trading Team of Ancient Profits ｜ Economic Indicator Scalping is Extremely Profitable with Surprises! [Okachanman]
Mr. Okachanman Profile
Born in Fukuoka Prefecture in 1980. Hobbies are news searching and going out for drinks. Skill is not sleeping. Started FX in 2011 and now lives a comfortable life as a full-time trader. Possesses strong intellectual curiosity and exceptional information gathering and analytical abilities. Recognized for these abilities within the “Trade Team Inishie,” becoming a core member of the team. Proficient in swing trading centered on fundamentals analysis.
Inishie-ryu FX Blog:Fundamentals Trading
※This article is a reprint/edit of an article from FX Information Strategy.com December 2018 issue. Please note that the market information written here may differ from the current market.
Economic Indicator Scalping
The market never tells when or what events will cause price to move sharply. However, there is a method to profit efficiently even in such markets. It is trading that targets price moves at the release of economic indicators. At the time of economic indicator releases, price moves are likely, and the movement is highly forecastable.
When releasing economic indicators, the greater the gap between the pre-release forecast and the actual result, the larger the price move. When the forecast and the result diverge markedly, I call it a “surprise.” The biggest profits are seen when “surprises” occur at policy rate announcements by central banks.
Most Profitable Indicator
The most profitable economic indicator is the central bank policy rate announcement. In about four years since 2015, this method yielded about 270 million yen in profits. Analyzing past data shows that about 70% of that occurred at central bank policy rate announcement timings.
In 2018, the most surprises occurred with the Turkish central bank policy rate announcements. There were three surprises this year in June, July, and September alone! Why three surprises? It relates significantly to Turkey’s situation. Turkey has faced unprecedented lira depreciation due to political instability. The biggest factor is that the central bank’s stance is to raise rates while the president’s stance is to cut rates.
Normally, politics and monetary policy are independent, with an implicit rule that politics does not interfere with monetary policy, but in Turkey politics and monetary policy are in direct conflict. This political instability has driven the lira down sharply in recent years.
The president’s pressure must have been substantial. It’s fair to say it was hard to predict the pre-release outcomes, making sur●prises very likely. As a result, there were three surprises this year, enabling about 50 million yen in profit.
