Thursday October 13, 2022 - 10:28:30 GMT
Share This Story
Global-View.com - www.global-view.com
[Forex View] Stupidity of Trading on Data
The stupidity of trading on a fractional miss in data still amazes me but this is the hand we are dealt.
Take today’s long-awaited US CPI report. The focus is on core inflation, which is forecast to rise by 6.5. % year/year.
Let’s say it comes in at 6.4%, there would likely be a relief rally in risk. But what happens if it comes in at 6.6%?
So, let’s look at the math. If the actual data is 6.44% it would be rounded to 6.4%. On the other hand, if it is 6.45% it would be rounded up to 6.5%
Similarly, if the actual data was 6.54% it would be round to 6.5%. At 6.55%, it would be rounded to 6.6%.
So you can see why I say the stupidity of trading on a fractional miss in data still amazes
The reality is that markets move on a surprise, such as a miss in a data release. However, a fractional miss in data should not be considered a surprise.
Whatever the case, what really matters is the reaction to the data, especially after any knee jerk response to the news as that will give a clue to market sentiment and the current imbalances between supply and demand.
Take surprises out of the market and get in sync with the current imbalance in the market by getting access to The Amazing Trader
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."